The Federal Government of Nigeria is set to provide half of the $2 billion required to implement a 90,000-kilometre fibre optic project aimed at expanding the nation’s digital infrastructure.

Dr. Bosun Tijani, the Minister of Communications, Innovation, and Digital Economy, disclosed this during an interview on Arise TV recently.

He revealed that the initiative, which forms part of the government’s 2025 borrowing plans, will be financed through loans.

“Earlier this year, the Federal Executive Council (FEC) approved a memo to set up a special purpose vehicle (SPV) to deploy 90,000 kilometers of fibre optic cables in Nigeria. Half of that money is what the government will make available,” Tijani stated.

He explained that nearly $1 billion of the project cost will come from government loans, while the remaining half will be secured through private sector partnerships.

According to the Minister, significant progress has been made in securing funding, with institutions like the World Bank playing a key role in discussions.

The project, which has received strong backing from President Bola Tinubu and the Ministry of Finance, is expected to commence the laying of cables in the second quarter of 2025.

Tijani highlighted the importance of government investment in backbone connectivity infrastructure, citing widespread complaints about poor service quality due to insufficient infrastructure deployed by private operators.

“Operators invest primarily in areas where returns are higher, which leaves some parts of the country underserved,” he explained.

“For true nationwide connectivity, the government must step in and treat connectivity as a critical resource accessible to all citizens.”

The Minister emphasized that while private investment remains crucial, the government’s involvement will ensure more equitable access to digital services across the country.

To drive the project, an SPV will be established to oversee the fibre optic deployment. Though supported by government funding, the SPV will operate as a private entity, with government representatives on its board.

Tijani concluded by reaffirming the government’s commitment to enhancing digital infrastructure, describing the initiative as a vital step toward bridging Nigeria’s digital divide and fostering inclusive economic growth.

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TECH DIGEST– Critical communications infrastructure projects globally are expected to have considerable delays due to a severe scarcity of fibre optic cabling.

According to a Cru Group analysis, the cost of fibre has increased by 70% in the past 18 months as demand for internet-based services has increased and nations move forward with their individual 5G rollouts.

There are now concerns about whether countries will be able to reach targets established for infrastructure build and whether this will have an impact on global connectivity given that the cost of deployment has unexpectedly doubled, according to Cru.

Fiber optic cabling is a key building block in almost all significant infrastructure projects, from high-speed broadband to 5G and the underwater cables that support the services of the biggest technological companies in the world, despite the fact that the technology itself receives little attention.

READALSO:PIN to Organize Workshop For Tech Companies, Startups

The current problems will also have an effect on the construction of new data centre buildings, impeding expansion plans for VPN, cloud storage, web hosting, and similar businesses.

Numerous variables, including a sharp increase in demand (consumption is up 8.1 percent year over year) and shortages of essential components used in manufacturing, including silicon tetrachloride and helium gas, are to blame for the current shortfall.

The CEO of Corning, the biggest manufacturer of fibre optic cable in the world, said that his company is frantically trying to raise production capacity because it has “never encountered anything like this inflationary crunch.”

The shortfall has resulted in not just erratic pricing changes but also significantly longer lead times. Small businesses with less influence are apparently having to wait up to a year, while large enterprises with strong relationships with manufacturers are likely to have it easier.

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TECHDIGEST – The findings of a joint study by Boston Consulting Group (BCG) and EDHECinfra, a venture of the renowned international EDHEC Business School, published recently reveals that large markets such as Nigeria, Ghana, South Africa, Brazil and parts of Asia have huge potential to attract digital infrastructure projects but are untapped markets for fiber optics investments.

This, according to the report, can be linked to uncertain economic growth that has made fiber – penetration levels uneven despite a clear demand for fiber infrastructure projects.

READ ALSO : NCC, infraCos to deploy Fibre infrastructure in 774 LGAs

In the new report entitled “Infrastructure Strategy 2022: A Pivot to the Digital Frontier,” Boston Consulting Group (BCG) and EDHECinfra provide a new perspective on the investment strategies and risk-adjusted performance of different groups of infrastructure investors.

“Although demand for fiber optic projects is most pronounced in less-wealthy economies—large and diverse regions with significant potential, such as Nigeria, Ghana, South Africa, Brazil, and parts of Asia are untapped markets—fiber penetration is also uneven in places where economic growth is less uncertain,” the report states.

The study points out that the increasing desire for higher speeds and reliable online access will inevitably lead to a huge expansion of fiber optic installations in new networks in low- and middle-income nations as well as in existing networks in higher-income countries.

Ultimately, fiber, which has already begun to make inroads in networks everywhere, will replace legacy (primarily copper) infrastructure completely, particularly as 5G rolls out.

​Commenting on the findings of the study, Stefano Niavas, the Managing Director and Partner, BCG Nigeria, says, “Fibre optic investment is required to expand the capacity of the undersea cable infrastructure on the shores of Nigeria beyond the cities to other regions of the country in order to make connectivity truly ubiquitous.

“With the growing demand for fast and reliable Internet connectivity, investing in digital infrastructure is profitable and it is expected that investment in fibre installations all over the country will accelerate in a few years from now.”

Other key findings of the report include:

A pivot to the digital frontier 

As the analysis shows, all investors are planning to overinvest in digital infrastructure going forward. While this also entails data centers, towers, satellites, and subsea connections, the appetite for broadband connectivity remains high.

As Roman Friedrich, a BCG managing director and partner and a coauthor of the report, explains: “The increasing desire for higher speeds and reliable online access will lead inevitably to a huge expansion of fiber optic installations in new networks in developing nations as well as in existing networks in more developed countries. Ultimately, fiber will replace legacy (primarily copper) infrastructure completely, particularly as 5G rolls out.”

North American Pensions Funds have the highest risk-adjusted returns in 2021 and are in fact the top ranked peer group –

Other peer groups took more risk to achieve lower average returns, while Canadian investors are very close to the all-investor average.

At the bottom of the risk-adjusted rankings, EU and UK pension funds take less risk but also achieve comparatively lower returns.

As Frederic Blanc-Brude, director of EDHECinfra and a coauthor of the report, explains, “certain investors have gained exposure to different segments of the infrastructure universe over time and each segment has performed differently.”

Oil and gas still pay –

Although one-third of the surveyed investors have expressed that they want to decrease their exposure to conventional power generation, the main beneficiary of the 2021 recovery, after transport, was gas and conventional power generation—especially since wind levels were lower than usual.

Those peer groups that stayed more exposed to these sectors benefited, while peer groups that have already mostly divested conventional power generation from their portfolios did not.

Operational value creation is paramount –

While operational value creation has always been a paradigm for value-add infrastructure investors, 90% of Core and Core+ investors agree that the focus will shift toward more hands-on value-creation work with their portfolio firms.

As Wilhelm Schmundt, BCG’s global head of the infrastructure investors’ sector and a coauthor of the report, sees it: “The steep increase in asset prices, dealing with inflation and the rise of factor prices, as well as secular trends like energy transition and digitalization, have made operational value creation a must-have capability for asset managers across all industry sectors. Limited partners are putting increasing scrutiny on understanding how general partners are building their respective muscles.”

To Read more, Visit : Techeconomy.ng

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