Bismarck Rewane, the Chief Executive Officer of Financial Derivatives, has stated that the proposed tariff hike by telecommunications companies will contribute to reducing inflation in Nigeria.
Rewane made this remark during an appearance on Channels Television’s Business Morning on Thursday.
This follows the confirmation by the Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, on Wednesday, that plans to increase telecom tariffs are underway. Tijani noted that the Nigerian Communications Commission (NCC) would outline the specifics for the adjustment.
Rewane, who had previously endorsed the tariff hike proposal, argued that the initiative would enhance the sustainability of the sector. He explained that the move could help curb inflation by boosting productivity and highlighted that MTN shares surged by 10% to ₦220 following the announcement.
He also noted that investors had already accounted for the change and expressed optimism, saying they are anticipating significant benefits.
“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.
“Any increase in productivity and output is likely to allow inflation to moderate, which is the goal. So, 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.
“We also heard from the operators, MTN that they are all revving up. So in all, there are economic benefits because of increased output and productivity. Two, policymakers are aligned because they want this to lead to a moderation in inflation,” he added.
He further said that it was not a bad deal and re-echoed the minister’s comment that the tariff hike will not be 100 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,” Rewane added.
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