Bismarck Declares Planned Tariff Hike by Telcos Will Reduce Inflation

Bismarck Rewane, chief executive officer, Financial Derivatives Company, (FDC) has declared that the proposed tariff hike by telecommunications will help reduce inflation in the country.

Rewane made this statement on Channels Television’s Business Morning on Thursday, monitored by Gentechnews.

Rewane, who previously supported the plans for a tariff hike, affirmed that the move will make the sector more sustainable.

According to the renowned Economist, it would help to reduce inflation because it increases productivity, stressing that the price of MTN shares went up by 10% to 220.

Rewane restated that the investors had already factored that in, adding that they are expecting a lot of good goodies.

“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 emphasized.

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.

Recall that Association of Licensed Telecommunications Operators of Nigeria (ALTON) and the Association of Telecommunications Companies of Nigeria (ATCON) had urged the Nigerian Communications Commission (NCC) to consider reviewing tariffs upward to address rising operational costs.

On January 3, Karl Toriola, chief executive officer (CEO), MTN Nigeria, said telcos want a 100 percent tariff hike.