Danbatta: Nigeria’s Telecoms Contribution to GDP Now 16%

*Telcos call for upward review of telecoms’ tariff, regulatory independence

Emma Okonji

The telecommunications sector’s contribution to the nation’s Gross Domestic Product (GDP) has increased significantly to 16 per cent in the second quarter of 2023, according to the Nigerian Communications Commission (NCC), which cited a recent report released by the Nigeria Bureau of Statistics (NBS).
The Executive Vice Chairman of NCC, Prof. Umar Danbatta, stated this in his keynote address delivered at the Telecom Executives and Regulators Forum (TERF), hosted by the Association of Telecommunications Companies of Nigeria (ATCON) in Lagos, yesterday.  

According to Danbatta, from a 14.13 per cent contribution in the first quarter of 2023, and up from the hitherto 15 per cent all-time-high record contributed in the second quarter of 2022, the telecommunications sector added 16 per cent to the national GDP in the second quarter of 2023 to set a new record.
Danbatta, while speaking on the theme: ‘Success Factors and Barriers to National Broadband and Digital Economy Aspirations,’ said the Nigerian economy witnessed tremendous growth in broadband penetration since 2015.  

“From about eight per cent contribution to GDP in 2015, when I came on board as the EVC of NCC, quarterly GDP has increased significantly to reach its current threshold of 16 per cent and that this has continued to positively impact all aspects of the eco
“Through sustained regulatory excellence and operational efficiency by the Commission, the industry has grown in leaps and bounds over the past two decades and this has impacted on all other sectors of the economy.
“The effective regulatory regime emplaced by the NCC and with the support from all stakeholders has been our major success factor as an industry,” Danbatta added.

He stated that while there were barriers to broadband deployment in the country, ranging from the issue of right of way (RoW), fibre cuts, high capital requirement for deployment, multiple taxations and regulations, among other challenges, the NCC was navigating regulatory complexities, digital divide and literacy, security concerns with firmness and increased collaborations with necessary stakeholders such as ATCON to create measures towards tackling the challenges.

On the RoW challenge, the EVC said there were about 46 different taxes directed at the telecom sector at the moment. Such charges and levels, coming in various names, were imposed on telecom operators by some agencies and tiers of government, especially at the state and local levels.
The challenge translates into greater economic burdens on telecom subscribers in the country, Danbatta said.

Speaking about connectivity, Danbatta said: “Over the years, we have identified some clusters of access gaps all over the country but we have recorded a significant drop in the number of access gaps, as we continue to drive initiatives that boost access to telecommunications services.”
According to him, the commission does this by enlisting government commitment to a digital economy with robust policy frameworks, promotion of investment and funding, stimulation of infrastructure development, digital inclusion and literacy, promotion of competition and market liberalisation, effective allocation of spectrum, as well as driving the e-government ecosystem.

President of ATCON, Mr. Tony Izuagbe Emoekpere, in his opening remarks, said, the forum was put together to promote discussions on critical national infrastructure as a strategy to attract further investments in the telecoms sector, as well as discuss key challenges facing the telecoms sector, with a view to proffering solutions to identified challenges.
Meanwhile, telecoms operators have again called for an upward review of telecoms tariff, insisting that the current cost in telecoms service offerings was no longer sustainable.

They also stressed the need for the total independence of the telecoms regulator, the NCC, to enable it implement policies that would further develop the sector.
The Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, who made the calls during his goodwill message at the forum, said there was urgent need for the NCC to consider upward review of telecoms tariff, if the sector must survive and continue to provide quality services, while still maintaining its contribution to Gross Domestic Product (GDP).
“Since the inception of Global System for Mobile Communications (GSM) in 2001, telecoms’ tariff has never been increased. Telecoms’ sector is the only sector where the cost of delivering services continues to drop, while the cost of goods and services in other sectors of the economy continues to rise.
“The present cost of delivering telecoms services is no longer sustainable, hence the urgent need for the upward review of telecoms tariff. There is also an urgent need for the total independence of the NCC, to enable it as a regulator, implement policies that will fast track development in the telecoms sector,” Adebayo said.