Nigeria's telecom operators have emerged largely unscathed from the 14% export tariff introduced by the US government, thanks to their import-driven business model. According to Tony Emoekpere, President of the Association of Telecommunication Companies of Nigeria (ATCON), the sector relies heavily on equipment and infrastructure from China, the US, and parts of Europe, which means they don't export goods that would be affected by the tariff.

However, industry experts warn that the broader economic implications of this trade policy may still pose indirect challenges to telecom operators. Shifts in foreign exchange earnings, inflation, and consumer spending patterns could impact their ability to manage rising operational costs and maintain service affordability. Gbenga Adebayo, President of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), notes that while there is no hardware exported, local operators may need to adjust to new rates if the VAT on calls in the US increases.

The recent tariff hike implemented by telecom operators in Nigeria, aimed at supporting investments in improved service quality, could be compromised if the 14% US export tariff had directly affected telecom operations. Fortunately, the tariff is directed at non-oil exports, which account for around 8.25% of total exports, according to data from the National Bureau of Statistics (NBS).

Despite this, the US tariff on Nigerian goods could still have far-reaching consequences for the economy. By making exports more expensive and less competitive, it could reduce demand in key sectors like oil, agriculture, and manufacturing. This, in turn, may shrink foreign exchange earnings, further devalue the naira, and drive inflation. With rising costs and weaker consumer spending, telecom operators face growing pressure on revenue and profitability.

The recent 50% tariff hike implemented by Nigerian telecom operators to offset rising costs has already triggered consumer pushback over affordability. A further deterioration in economic conditions due to the US export tariff could heighten this backlash as households reprioritize their spending. Despite this, many Nigerian users still experience poor network quality and minimal service improvements, which may limit telecom operators' capacity to reinvest in infrastructure.

In a highly price-sensitive market, maintaining profitability while delivering better service will require a careful balance between cost recovery and customer retention. While Nigeria's telecom sector seems unaffected by the direct effects of the US export tariff, the indirect consequences pose significant risks that require careful planning and policy support. Fortunately, the Nigerian government is willing to negotiate with the United States to mitigate the impact of the tariff.

As the telecom industry navigates this complex landscape, it remains to be seen how operators will adapt to the changing economic environment. One thing is certain, however: the sector will need to prioritize cost management, service quality, and customer retention to stay afloat in these uncertain times.