Exorbitant right-of-way fees impede Nigeria’s digitization process

Mary Ajayi works at a federal university in Awka, Anambra State in the Southeastern region of Nigeria. She has subscribed to digital payment systems for over five years. “For these years, I hardly go to bank to waste my time. I do most things on my mobile app,” she said happily.

Be that as it may, Ajayi recalled a very frustrating experience in the last quarter of 2024 when she was at a popular market in Awka to get some groceries. “I had finished buying all the things that I needed. I wanted to pay through my mobile app. The app refused to open. I tried and tried, the man was even saying, maybe I didn’t have data. I had to get data just to be sure. 

Unfortunately, the problem was not data but something more serious. “When the app eventually opened, transaction history showed that I received the money, but the value did not impact on my balance. I refreshed over and again, nothing changed, it was still showing zero balance. So, I was seeing the money, but I couldn’t send it to pay for the items bought.

The situation kept her at the grocery shop for four hours as she earnestly prayed for positive change. “I had no other choice than to sit down waiting for network to improve for me to receive the money sent. Out of frustration, I had to call my husband to transfer another money to another account. He did but no head way.

“I looked so stupid before the man. The man saw me like someone who came to market to dupe or scam him. Something that I was supposed to spend like one hour in the market, I ended up spending up to four hours. At last, I was able to make the payment through POS as the app still did not permit me. I was so sad and depressed that day,” she concluded.

While Ajayi’s challenge was with financial transactions, that of Ezra Takyum was job-related. Takyum, a statistician, has been involved in data gathering for over five years. But his experience during one of the field works in 2024 has formed an indelible memory in him.

“I went to the field in the far away Ayamelum LGA. That time, we worked with an app called Computer-Assisted Personal Interviewer, (CAPI), a real time data collection tool.

Ab-initio, that task looked like one of the easiest for him but for ugly twist along the way, for which he had no premonition. “On the field, I was fortunate to get respondents easily. I got all the needed information little did I know that all the information I collected during the field work and sent to the backend were not successfully uploaded. 

“I got home that night and wanted to ascertain how far I had gone. I discovered something was wrong, so I immediately switched off my phone and rebooted it. After refreshing it, I discovered that I lost everything. All my efforts at Ifite-Ogwari, Omor and Umueje for that day were wasted. 

The frustrated and distraught statistician strongly blamed his predicament on poor network connectivity, a typical challenge in average rural settlements in the country. “I lost everything due to poor network coverage. I was so devastated. I mean, it was too frustrating considering how much I spent on getting to the locations, getting the respondents, and the friendliness of course, which I couldn’t vouch for again.

“This happened at a time there was a communal clash between Anaku and Omor, during which people’s lands, houses and other properties were lost. What happened and how I lost that data, I could not explain.

“However, like I said earlier, I strongly suspect poor internet connectivity because the gadgets I would have suspected the app, but it worked perfectly throughout the exercise. Eventually, I went back to the three communities to repeat the exercise,” Takyum lamented.

Ajayi and Takyum’s experiences are attributed to delivery and constant service failure witnessed in the telecommunications sector of the country, a situation which had slowed down the adoption rate of Digital Public Infrastructure, (DPI), which has been blamed primarily on high right-of-way (RoW) fees charged by many state governments.

Right of Way (RoW) fees are significant in the telecommunications infrastructure landscape, mainly as Nigeria aims to enhance its digital economy. They are imposed by governments and some federal agencies (like the Federal Ministry of Works, National Inland Waterways Authority, etc.) to grant access to install broadband infrastructures like fiber-optic cables.

The Federal Government, through NEC, recommended a standardized fee of N145 per linear meter first in 2013 and subsequently in 2020 to drive the broadband connectivity targets based on the Nigerian National Broadband Plan (NNBP) 2020-2025, which addresses 3 of the 8 priorities that the Federal Government assigned to the Federal Ministry of Communications and Digital Economy, and the parastatals under its purview, for implementation.

The priorities are the implementation of broadband connectivity and execution of a plan to deploy 4G across the country, as well as the development and implementation of a digital economy policy and strategy. The broadband plan is designed to deliver data download speeds across Nigeria, a minimum of 25Mbps in urban areas, and 10Mbps in rural areas, with effective coverage available to at least 90% of the population by 2025 at a price not more than N390 per 1GB of data (2% of median income or 1% of minimum wage).

Regrettably, achieving the targets of the NNBP 2020-2025 looks like a tall order as many states, in total disregard for Federal Government’s recommendation of a standardized fee of N145 per linear meter first in 2013 and 2020, have continued to charge exorbitant rates, as high as N8,000 per linear meter, not minding that the N145 recommendation was aimed at driving the broadband connectivity targets, as RoW makes up to 70% of the cost of fiber deployment.

“High RoW fees constitute a major barrier to expanding telecommunications networks in Nigeria, thereby hindering efforts to actualize milestones set in the Nigeria National Broadband Plan (NNBP) 2020-2025,” Hauwa Wakili, Head, Digital Skills and Services of the Nigeria Communications Commission, (NCC), affirmed.

According to her, expensive RoW fees significantly increase the cost of laying down fiber optic cables and other essential infrastructure, thereby discouraging telecom operators from investing and reducing the pace of deployment, especially in underserved and unserved regions of the country.

“Digital identification systems, payment systems, and seamless data exchanges are based on the availability of extensive network infrastructure. Excessive RoW fees can cause avoidable delays in deploying necessary network coverage, impacting the speed and efficiency of identity verification processes, slowing down the adoption of cashless payment systems in underserved areas, and slower data transfer rates and reduced accessibility to digital services”.

Apart from the high RoW fees, vandalization of critical telecommunications infrastructure has been a significant menace to the telecommunications and information infrastructure in Nigeria over the years. In 2023 alone, NCC-sourced data revealed that the country recorded over 24,000 incidents of fibre cuts, vandalism, and theft which led to losses exceeding ₦14 billion in revenue and ₦15.4 billion in repair costs.

About 24,000 fiber cuts were recorded last year. “These and other security challenges have impacted broadband penetration and service quality,” Hauwa Wakili, regretted.

Positive Developments

With unfolding developments in the sector, there are reasons to anticipate positive changes that will reverse the ugly trend enumerated above. As of December 2024, 7 out of its 36 states have completely waived their RoW fees to zero.

The states namely: Anambra, Adamawa, Bauchi, Katsina, Kebbi, Nasarawa, and Zamfara took the bold step following the proactive and consistent advocacy efforts of the Nigerian Communications Commission (NCC).

According to NCC’s Head Digital Skills & Services, two other states are charging N1 while about eight others charging the recommended N145 per linear meter. “Engagements with NGF, Regional Development Commissions, State governments and state governors among others significantly contributed to waivers in seven states, with two states charging N1 and about eight others charging N145. Engagements include collaborations with other stakeholders like the World Bank and other development partners.

In line with the NNBP targets to deliver data download speeds of a minimum of 25 Mbps in urban areas and 10Mbps in rural areas, with effective coverage available to at least 90 percent of the population by 2025 at a price not more than 390 per 1GB of data, data download speeds in urban and rural areas is currently 22.03Mbps for urban areas and less than 10Mbps for rural areas.  2G coverage is at 94.06% 3G – 89.42%, 4G – 84.38% while 5G was at 13.28% as at 2^nd quarter of 2024.

However, the target is 90% 4G coverage by 2025. On the target of N390 per 1 GB of data, the country was at N344.48/1GB mobile and N434.83/ 1GB satellite as at second quarter of 2024.

According to the 2024 Worldwide Broadband Speed Report, Nigeria emerged as the seventh Sub-Saharan African country with the fastest internet speed as it recorded an average download speed of 27.62 Mbps. 

The broadband speed tests conducted across 220 countries, showed that Nigeria improved in global speed ranking, moving up from 133rd position in 2023 to 132nd in 2024. 

In Africa, the country came behind Réunion, South Africa, Eswatini, Rwanda, Mauritius, and Botswana, which ranked first to sixth in the continent. Réunion topped Sub-Saharan Africa with 63.29 Mbps average internet speed, while South Africa came second with 42.42 Mbps.  

Failure of most states to either reduce or waive the RoW is identified as a barrier to expanding telecommunications networks and efforts to digitize various sectors in the affected states and the country at large. Apart from increasing the cost of laying down fiber optic cables and other essential infrastructure, the situation also discourages telecom operators from investing and reduces the pace of deployment, with negative effects on DPI adoption.

Benefits of waived or reduced RoW

Telecoms expert, Richards Agulu, explained that states where right-of-way fees have been waived completely will be able to attract more investments in the telecommunications sector as more companies are encouraged to come in and invest. This he noted leads to expanded network coverage and increased competition, which can drive down consumer prices.

“The absence of or low RoW fees will expedite the rollout of digital infrastructure, enabling faster implementation of e-governance initiatives, health services, and educational resources. It also leads to enhanced or improved connectivity leading to better access to information and services for the citizens, facilitation of educational opportunities, remote work, and the eventual promotion of social equity.

Innovation and competitiveness are fostered as reliable broadband connectivity coming with digital infrastructure deployment accelerates the adoption of emerging technologies like Artificial Intelligence (AI), the Internet of Things (IoT), and blockchain.

According to Agulu, low or no RoW also boosts economic growth and job creation through e-commerce, digital services, and the growth of tech startups. “This deployment creates direct and indirect jobs in various sectors, including technology, education, agriculture, healthcare, and the media”.

While collecting exorbitant RoW significantly shores up the revenue profiles of states, the benefits of reduced or waived RoW are said to be enormous. These include engagements for network expansion, faster and more extensive network deployment, resulting in higher penetration rates of mobile and internet services. Some of these states have started seeing more significant levels of digital inclusion as underserved communities have started gaining access to telecommunications services more quickly.

Wakili, the Head Digital Skills & Services of NCC, spoke in the same direction. “The states are attracting more investments, experiencing an increase in connectivity, and also benefiting from digital intervention projects from federal government agencies and development partners. The World Bank is currently engaging with state governments that have provided an enabling environment for businesses, especially those with legislation and regulations that provide for the smooth and unencumbered deployment of digital infrastructure. 

“In a short time, there will be a marked improvement in the fostering of innovation, competitiveness, and widespread social inclusion. Due to increased competition and reduced operational costs for telecom providers, consumers in states that have waived the RoW are likely to benefit from lower service costs,” Wakili said.

On the slow pace of DPI adoption, Wakili explained, “Digital identification systems, payment systems, and seamless data exchanges are based on the availability of extensive network infrastructure. Excessive RoW fees can cause avoidable delays in deploying necessary network coverage, impacting the speed and efficiency of identity verification processes, slowing down the adoption of cashless payment systems in underserved areas, and slower data transfer rates and reduced accessibility to digital services”.

According to her, the Federal Government has taken decisive steps towards addressing the problem of vandalization of telecommunication infrastructure. “President Bola Ahmed Tinubu approved the Critical National Information Infrastructure (CNII) Order 2024, released in August 2024, which now designates all telecommunications infrastructure as Critical National Infrastructure, criminalizing any intentional damage to the nation’s telecommunication infrastructure. 

“The NCC has already commenced collaboration with the ONSA to operationalize CNII. This order will aid in protecting and deploying critical digital infrastructure. By safeguarding these networks, we are laying the foundation for the continued growth of our digital financial systems,” Wakili said optimistically.

Recommendations

Certain measures have been recommended for the government and non-governmental actors to better the future of digitization in Nigeria. First, as argued by the telecom’s expert, is for every state to either waive or reduce the RoW fees to the amount recommended by the Federal Government.

“In 2018, Ogun State Government agreed to provide free RoW to build 250km of fibre optic cable to Main One. The government agreed to drive broadband connectivity in the state. It is hoped that if this is extended to other operators, the state stands to reap more benefits for its citizenry. Other states can also emulate such gesture.

“States can equally explore Public-Private Partnerships to collaborate with telecommunications companies to develop infrastructure while ensuring that they remain financially viable. Prioritizing long-term digitization goals over immediate revenue generation will position the states as leaders in the digital economy, attracting investments and improving public services,” he advised.

The Nigeria Governors’ Forum (NGF) Secretariat and the NCC have been championing the efforts to get states to establish a robust and dynamic framework that supports digital infrastructure development and reduces the bureaucratic bottlenecks surrounding deployment to enable telecom operators to invest. This entails having a one-stop shop for approvals and renewals of registration for RoW.

The telecoms experts strongly argued that waiving or reducing RoW fees will facilitate the actualization of the NNBP goals regarding fibre deployment. “If these waivers had happened before now, the 120,000 km ambitious NNBP 2020-2025 target could have been achieved as of this year,” Richard maintained, while NCC’s Head Digital Skills & Services stressed the need for the state and local governments, the private sector, civil society and media to play their respective roles in tackling the menace of insecurity, access denial, and vandalization of telecoms infrastructure.

“High RoW fees and multiple taxations levies by states and local governments on telecommunications companies should be dealt with in line with federal government approval for the fast deployment of digital infrastructure to underserved and unserved areas of the country to enable the achievement of NNBP 2020-2025 targets

She added, “the Commission is conscious of monitoring the plan’s targets and milestones and championing causes that will actualize the ambitious goals in the plan. The NCC is involved with various Ministerial and organizational projects as well as strategic collaborations with other relevant stakeholders for the attainment of NNBP 2020-2025 targets,” Wakili explained.

“This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop

CREDIT: FRCN