Enhancing FG’s Revenue Through NCC

By Moses Ebosele, ebosele@hotmail.com

Despite various economic challenges, the Nigerian Communications Commission (NCC) has sustained positive revenue generation profile.

 Although NCC is not primarily a revenue-generating agency of the Federal Government,  its efforts in boosting revenue through yearly remittances, especially spectrum sales and surplus budgets, according to experts, have become an added advantage for the country.

 This is coming on the heels of dwindling oil and gas revenue, a development that has prompted the Federal Government to embark on borrowing from international financial institutions.

 Indeed, between January 1 and May 31, 2021, the commission exceeded its N36 billion projected revenue from spectrum license fees for the year by over 400 per cent 

  A statement issued recently by Director, Public Affairs, Dr Ikechukwu Adinde explained that the development reflected significant contribution to the revenue drive of the Federal Government. 

According to Adinde, the N150 billion spectrum revenue achieved in the first half of the year has been remitted to the government in line with the provisions of the Nigerian Communications Act (NCA), 2003. 

The act mandates the Commission to remit proceeds from spectrum resources wholly into the government’s Consolidated Revenue Fund (CRF). 

The Commission, in its 2021 Budget, approved by both chambers of the National Assembly in December, 2020, projected a revenue of N36 billion from spectrum fee for the year 2021 but has remarkably surpassed this estimate. 

He noted that over the years, the NCC had put in place an effective regulatory regime which had significantly facilitated advancements in the nation’s telecoms industry.  

 Reacting to the development in a chat with City Business News (www.citybusinessnews.com), an economist, Dr Matthew Otoide commended the Board, Management and Staff of the Commission: “I commend NCC for this good news. We (Nigeria) need more positive news like this. Other agencies should map out positive revenue strategies for the country“. 

  He described telecommunications as Nigeria’s “next oil“ based on “our huge population. This is also an opportunity to call on the Government to put all necessary infractrure in place. Adequate infrastructure means more revenue and employment opportunities for the country“.  

  Commenting on the revenue performance, the Executive Vice-Chairman (EVC) of the Commission, Prof. Umar Danbatta, explained that the impressive uptick in spectrum fee was the result of the favourable turn of events for the telecom sector. 

Danbatta said that at the time of preparing the estimates for the 2021 Budget of the Commission, it was not clear due to the ravaging impact of COVID-19 on the global economy. 

He noted that the 10-year spectrum fees made by some of the major operators directly impacted the projected spectrum fee favourably. 

The EVC, however, said that the commission believed that enthronement of effective regulation would continue to improve the general performance of the telecoms sector.  

 Briefing the House of Representative Committee on Telecommunications on Wednesday, October 28, 2020, Danbatta explained how the telecoms agency contributed to the revenue drive of the Federal Government by generating and remitting N344.71 billion to the Consolidated Revenue Fund (CRF) in five years. 

 The EVC, who attributed the successes of the Commission in the last five years to the harmonious relationship between the Commission and the National Assembly, said such relationship, the diligent oversight by the lawmakers and necessary legislative support have brought forth a lot of dividends for the industry.

Danbatta stated that telecoms sector’s contribution to Gross Domestic Product (GDP) increased from 8.5 percent in 2015 to 14.30 percent as of the second quarter of 2020.

 In financial value, the 14.30 per cent translates to N2.272 trillion in Q2. He also said that telecoms investment grew from around $38 billion in 2015 to over $70 billion as at October, 2020.

He said:  “Between 2015 and September, 2020, active voice subscription has increased from 151 million to 205.25 million with a teledensity standing at 107.53 percent as at end of September, 2020. We are also empowering and protecting the consumers and ensuring we are able to sanitise the industry of improperly-registered Subscriber identification Module (SIM) cards through our impartial regulatory approach.”