The federal government, FG has warned state governors not to go on with the rumoured increment of Right of Way, RoW charges , saying it would amount to breaching the 2013 RoW agreement between FG, States and the operators.
Right of Way is the permission given to the operators by either the Federal, State or local government councils, to open the roads and lay fibre cables that carry internet traffic.
FG made its feelings known through the Minister of Communications and digital Economy, Dr Ibrahim Pantami.
According to Pantami, the Federal government is really dismayed at the decision.
He said: “We received with dismay the decision of some states of the Federation to increase the Right of Way charges in disregard of the resolutions reached by the National Economic Council, NEC.
Pantami, in the company of the Executive Vice Chairman of the Nigerian Communications Commission, NCC, Prof. Umar Danbatta, also at the weekend, held a meeting with the chairman of Nigeria governors Forum, and governor of Ekiti State, Fayemi Kayode in Abuja, to trash out grey areas in the issue which has undermined deployment of ubiquitous broadband in Nigeria.
Recall that in 2013, National Economic Council, NEC set up a Committee comprising State Governors and Ministers to review the issues of multiple taxation in the telecommunications industry in Nigeria and its impact.
The Committee, after extensive and wide-ranging consultations, resolved to harmonise the taxes applicable to broadband-related activities and streamlined the taxation management processes across the Federation.
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Specifically, to deepen broadband penetration for the social and economic development of the Country, the Committee agreed to the uniform Right of Way ,RoW, charge of N145.00 per linear meter of fibre.
However, majority of the states have refuse to abide by that harmonisation but rather hike the prices as far as N6000 per linear metre of fibre. This has frustrated the operators who appeared to have abandoned investments, especially, in terrestrial fibre cable deployments. This has also resulted in Nigeria being one of the countries with lowest last mile broadband deployments in the world.
Pantami reminded the governors that in October 2019, his ministry wrote to all the State Governors, drawing their attention to these resolutions and soliciting their support and collaboration towards the realisation of the National Digital Economy by fast-tracking the deployment of broadband infrastructure for the provision of affordable internet services to underserved and unserved areas.
He noted that “It is true that the digital economy today is strategically dominating the world economy. Oxford Economics puts the current value of the digital economy at $11.5 trillion which is about 16 percent of the world economy. “Furthermore, the World Economic Forum revealed that 60 percent of the global economy is expected to be digitised by 2022. With the renaming of the Federal Ministry of Communications to Federal Ministry of Communications and Digital Economy as well as the unveiling of the National Digital Economy Policy and Strategy by Mr President, we are on the path of realising the potentials of the digital economy.
“It is, however, disheartening to hear that some States have decided to disregard these resolutions and have, in some cases, increased the RoW charges by over 1,200 percent. This will no doubt impact negatively on the efforts being made by the Federal Government. It is established that there is a strong correlation between a country’s broadband penetration and its Gross Domestic Product, GDP.”
Pantami quoted an ITU study on Africa which indicates that a 10 percent broadband penetration would result in an increase of 2.5 percent of GDP per capita.
He said: “We are therefore calling on all State Governors, especially those that have made public their decisions to increase the RoW charges, to reconsider these decisions in the interest of Nigerians as well as for the socio-economic growth and development of the country.
“We also draw their attention to the fact that these decisions, if implemented, will result in an increase in the costs of operations of the telecoms operators which will naturally be passed to the consumers,” he added.