Why cheaper fibre fees fail to spark Nigerian infrastructure investment

The cost of laying fibre-optic cables varies widely across Nigeria’s states, with some waiving Right of Way (RoW) fees while others charge up to ₦6,600 ($4.84) per metre. Despite these differences, the deployment of fibre infrastructure remains uneven, prompting questions about the factors driving investment. The Lagos State Infrastructure Maintenance and Regulatory Agency (LASIMRA) has announced an online permitting system to streamline approvals for fibre, masts and towers, but it is unclear whether this system has reduced processing times or costs.

The disparity in fibre deployments suggests that there are multiple factors influencing investment decisions beyond merely the RoW fees. The Nigerian Communications Commission's (NCC) Ease of Doing Business portal shows that states with higher RoW fees, such as Ogun, Kano, and Rivers, have substantial fibre networks. For example, Ogun has 4,246.48 kilometres of deployed fibre despite charging more than 45 times the benchmark fee, while Kano and Rivers have 4,616.71 and 4,616.01 kilometres respectively, even though they exceed the benchmark.

Conversely, states with lower RoW fees, like Ebonyi, Bayelsa, Jigawa, and Zamfara, have significantly less fibre deployment. This disparity suggests that RoW fees alone do not determine whether operators invest in a particular region. Other factors, such as commercial markets, strategic transport corridors, enterprise customers, and existing telecom infrastructure, play a significant role in investment decisions.

Despite high RoW charges, the networks in these high-fee states indicate that operators have built significant infrastructure driven by commercial demand, strategic locations, and other market forces. In contrast, states with lower RoW fees, such as Ebonyi and Bayelsa, have lower fibre deployments. This is not necessarily a failure of the lower fees; rather, it may indicate limited demand or other constraints that prevent operators from investing further.

Notably, Kaduna, which has waived RoW charges, has 4,339.85 kilometres of fibre, and Anambra, another zero-fee state, has 2,547.34 kilometres. These examples show that states can achieve substantial fibre deployments even with waived fees. However, the total fibre figures represent cumulative investments over time rather than the immediate impact of recent policy changes.

The Lagos case presents an additional complication. Despite having a relatively low RoW fee of ₦850 ($0.62) per metre, Lagos has an extensive fibre network—11,586.70 kilometres—compared to the Federal Capital Territory’s 6,973.13 kilometres. Lagos’s sizeable network reflects its concentration of businesses, financial institutions, government agencies, data centres, and other major connectivity users.

However, inconsistencies in published rates—such as the discrepancy between the NCC portal’s ₦850 ($0.62) per metre and LASIMRA’s ₦1,500 ($1.10) per metre—add to the complexity of assessing the true impact of fees on investment decisions. Overall, while reducing RoW fees may lower deployment costs, it does not guarantee that projects will be commercially viable.

To encourage widespread broadband investment, it is essential to understand the broader market conditions, strategic locations, and demand drivers that influence operators' decisions. Policymakers must consider these factors to ensure that reforms extend broadband access to underserved communities, rather than merely lowering costs in areas where operators already plan to build.