As Nigeria celebrates 64 years of independence, one sector of the economy that is performing relatively well is information and communication technology (ICT). However, experts are more concerned about the need to strengthen and sustain the industry’s growth, writes ADEYEMI ADEPETUN.
The information and communication technology (ICT) sector is doing well, with a gross domestic product (GDP) contribution of around 20% to the economy. The ICT sector is currently reported to support almost 90% of Nigeria’s GDP.
The National Bureau of Statistics (NBS) said the ICT sector, comprising four activities: telecommunications and information services, publishing, film, sound recording, music production and broadcasting, is the backbone of change management.
As of the past eight months, the ICT sector recorded a year-on-year growth rate of 4.44%. This was mainly due to activity in the telecommunications subsector, which contributed 16.36% to real GDP.
According to the NBS, the telecommunications industry was the third-largest contributor to real GDP in the second quarter of 2024, behind the agricultural production and trade industries, which contributed 20.35% and 16.39%, respectively.
With over $76 billion in investments, the telecommunications industry, dominated by mobile network operators such as MTN, Globacom, Airtel, 9mobile, and Internet Service Providers (ISPs), also drives a lot of activity in every other sector of the economy. I am.
The subsector closest to telecommunications within the ICT sector was broadcasting, which increased by 2.54%.
Over 20 years of communications revolution
Today, more than 20 years of telecommunications revolution in Nigeria has facilitated the connectivity of approximately 320 million telephone lines from NITEL’s 400,000 telephone lines, which were defunct as of 1999. Of those, 219 million are active, allowing for about 101 percent remote density.
Similarly, as of Q1 2024, there were approximately 164 million internet users. The Nigerian Communications Commission (NCC) estimates there are 94 million broadband users, with Nigerians consuming over 753,388.77 terabytes of data.
For some reason, 2G still dominated in Nigeria with a penetration rate of 56.9 percent, followed by 4G at 32.7 percent, 3G at 9.04 percent and 5G at 1.24 percent.
These developments are driving activity and productivity in many other sectors of the economy. For example, the influence of the telecommunications sector is also felt in the financial sector. It has contributed to promoting financial inclusion. Telemedicine, especially in the medical field, is rapidly becoming possible.
Plenty of challenges still remain
Nevertheless, various challenges continued to hit the telecommunications sector, including rising inflation, high operating costs, limited access to foreign exchange, regulatory burdens, multiple taxation, and local government extortion.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) said its members pay over 50 levies and taxes. Telecom operators are also battling various forms of vandalism and constant fiber cuts.
Currently, soaring diesel costs have reached N56.24 billion per month, continuing to burden business owners. According to industry estimates, carriers use an average of 40 million liters of diesel per month to power their sites. According to the NBS, diesel prices jumped to N1,406.05 per liter in August 2024, representing an increase of 64.58% from N854.32 per liter in August 2023.
According to the NCC, there will be 34,862 towers and 127,294 base stations in the country as of the end of 2022. According to industry sources, each base station is equipped with two generators. Based on the latest data uploaded by the NCC, the telecommunications industry spent N2.9 trillion on operational costs in 2022.
ICT performance under Tinubu
Dr. Bosun Tijani, Minister of Communications, Innovation and Digital Economy, said in a white paper published in June that the ICT sector made a significant contribution to the economy from the third quarter of 2023 to the first quarter of 2024.
“Available data from the National Bureau of Statistics (NBS, June 2024) on GDP in the information and communications sector for the last three quarters (Q3 2023 to Q1 2024) representing President Bola Ahmed Tinubu’s tenure. The data shows that the nominal contribution of each sector increased from N7.1 trillion in the third quarter of 2023 to N8.35 trillion in the fourth quarter of 2023.
He said, “In line with the performance of many major sectors, the ‘patterned decline’ continued to N7.86 trillion in the first quarter of 2024.” According to him, the growth of the ICT sector is being driven by the Tinubu administration’s ambitious policies for the digital economy, as outlined in the Federal Ministry of Communications, Innovation and Digital Economy’s Strategic Blueprint, which aims to improve productivity. The aim is to enable Nigeria’s economic growth through this. Driven by technological innovation.
He said the blueprint gave rise to several initiatives, including investments in 3 Million Technical Talents (3MTT) and research initiatives such as AI Collective and Fourth Industrial Revolution Technology Applications (4IRTA). He said the initiative aims to deepen the quantity and quality of the workforce while stimulating local capacity to maximize the opportunities that emerging technologies offer to grow the country’s digital economy. he added.
The need for a sustainable ICT sector
By consolidating the industry’s growth, stakeholders believe the industry has fared better, especially over the past 24 years, and needs to maintain its growth trajectory.
Tony Izuagbe Emoekpere, chairman of the Association of Telecommunications Companies of Nigeria (ATCON), in an interview with the Guardian, said Nigeria is doing very well in terms of technology considering the huge obstacles it faces as a country. .
Emokepere said the focus should be on how to ensure the sector is sustainable and prosperous. He said Nigeria has the second-lowest data rates in Africa despite the huge operational costs compared to other countries.
“All that has been gained in technology development is at risk of being lost. The infrastructure that is the backbone of the industry needs to be deepened. Measures to encourage investment are therefore fundamentally needed. “It is clear that the attractiveness of this sector needs to be further strengthened by measures such as tariff adjustments and incentives such as tax rebates for certain levels of investment,” he said.
In a similar vein, ALTON Chairman Gbenga Adebayo said Nigeria was doing very well because in 2000, when Nigeria celebrated its 40th anniversary, “we had about 500,000 telephone lines; ” he said. The country is currently celebrating its 64th anniversary, and 24 years later, the number of connections has exceeded 200 million. Although there are still challenges, looking at growth and development, the industry has been on track. Despite access disparities, more than 90% of Nigerians now have access to some form of digital services, and this has been achieved in just 24 years. Let’s look not only at the challenges, but also at the important changes we have undergone. After 40 years of lack of infrastructure, we closed the gap within 24 years. ICT has enabled virtually all sectors of the economy. Congratulations to all the players. ”
Mr Adebayo, an engineer, said the communications sector needed to focus on sustainability going forward. He said that being successful is one thing, maintaining success is another endeavor. Governments now need to pay attention to the challenges we have that threaten the sustainability of the industry and must do something. If the industry is sustainable, many others will follow suit, including the digital economy, entertainment, new media, AI, IoT, etc., and it will happen quickly. Government needs to support the communications sector. ”
From the perspective of the Chairman of Mobile Software Nigeria, Chris Uwaje, Nigeria still has a lot of work to do to reach that pedestal. Mr. Uwaje stressed that Nigeria is a technologically savvy child and instead of acquiring 80 per cent of the talent, it has deliberately decided to acquire 30 per cent of the talent and expectations in technology.
According to him, Nigeria’s 50 per cent deficit in technological development capacity can be easily remedied by applying the philosophical law of conflict to restore the ‘glory of stolen knowledge’.
“Today, AI and quantum computing are rushing to our shores like a widespread Harmattan fire, while we celebrate the innovations of other countries and consume them furiously at an infectious rate. Rebuild the education ecosystem, pay teachers and lecturers more than politicians, and watch a tsunami of change in the realm of innovation and transformation.”
Jide Awe, Science, Technology and Innovation Policy Advisor and founder of Jidaw.com, while assessing the impact of the telecommunications sector on the Nigerian economy, said the telecommunications industry will be transformative for Nigeria’s access to communications, commerce and information. He said that it is having a significant impact. information.
He said mobile and internet penetration in Nigeria was once among the fastest growing countries in the world. He said this presents a huge opportunity for mobile with social and economic benefits (political, commercial, educational, activism, etc.), and that mobile devices facilitate access to information and digital exposure, and that mobile devices facilitate internet access and social He said that it has become the most popular medium to provide media. .
He said that telecommunications has also created a wide range of opportunities for small and medium-sized enterprises and, without a doubt, telecommunications provides the much-needed foundation for digital development and transformation in Nigeria.
However, despite the achievements Nigeria has made in the past two decades, Orr said there is still much work to be done for Nigeria to realize its technological potential, adding that true independence requires digital independence. said it is essential.
He said that although great progress has been made, significant obstacles still prevent most citizens from fully reaping the benefits of technology and leveraging digital infrastructure to realize their dreams and improve their quality of life. said. Although infrastructure has improved, there are still concerns about suitability, quality, and reliability.
The founders of Jidaw.com said that while the current President Tinubu’s administration has prioritized improving energy supplies, improving power in some areas is costly and remains unstable and unreliable in many areas. He said he is struggling with low power. He said this will impact technology ventures, innovation and competitiveness.
He said there is insufficient investment in renewable energy and affordable power solutions that can reduce operating costs for businesses, especially in the technology and digital sectors, as electricity shortages are a major hurdle. It is said that it has not been done yet.
He called for more support for startups and innovators, saying more needs to be done to creatively expand opportunities for technology entrepreneurs and supporting innovators.
He said the Startup Law should be fully implemented, especially in the area of access to finance, which remains a challenge for digital entrepreneurs.
“Nigeria’s regulatory environment also needs to evolve into one that fosters rather than stifles innovation: reducing bureaucratic complexity, listening to stakeholders more comprehensively and fostering collaboration. The regulatory environment must be able to adapt to technological and other impactful developments while ensuring clarity and stability in government processes and eliminating excessive taxation of digital services. “However, there is a need to develop progressive policies to simplify business, operational and regulatory procedures in governance,” he stressed.
Mr. Awe said that as Nigeria celebrates its 64th anniversary of independence, although it has made great strides in technological development, there is a need to address the challenges that prevent it from fully leveraging technology for inclusive growth and development. he pointed out.
He said stakeholders, including governments, the private sector and civil society, must work together to address these challenges and effectively leverage technology and innovation for sustainable development.
