Lagos, Jan. 10, 2025 – Bismarck Rewane, the Chief Executive Officer of Financial Derivatives in Lagos, says higher tariffs in the telecom sector will bring about improved productivity and lower inflation.
Rewane made the observation on Thursday while speaking on Channels Television’s “Business Morning”.
He said tariff increases in the sector had the potential of reducing inflation because of its prospect of improving productivity.
The expert commended the federal government for finally acceding to the demand of the telecom operators on tariff increases, adding that the government’s new position was already boosting investor confidence in the sector.
“Yesterday, the price of MTN shares went up by 10 per cent to N220. Investors have already factored that in and are expecting a lot of good goodies,” he said.
Rewane said the tariff hike and the additional prospects of more investments in the sector would boost productivity and make the sector sustainable.
“Any increase in productivity and output is likely to allow inflation to moderate, which is the goal.
“We heard from the policymaker, Bosun Tijani, who was very clear that we want a sustainable sector. But we also heard from the regulator saying that we will hold these guys to quality of service.”
Rewane said he expected a more moderate tariff adjustment of between 40 per cent and 50 per cent per cent.
“Will they get 100%? No, they will definitely not. We suspect that we are going to likely see something between 40 and 50% which is fair after so many years of static changes,”
“But more important to think about is the fact that because of an increase in tariff and an increase in investment to make the industry sustainable, they’re going to see an increase in productivity, not directly but indirectly,” he said.
