Despite Challenges, ICT Contribution to GDP Surged to Reach 13.5% in Q4 2023

Emma Okonji

The latest report released by Groupe Spécial Mobile Association (GSMA), a global organisation unifying the mobile ecosystem worldwide, has highlighted the huge contribution of Information and Communications Technology (ICT) sector to Nigeria’s Gross Domestic Product (GDP), which surged to 13.5 per cent in fourth quarter of 2023.

The report, which was presented at its recent forum in Abuja, cast a spotlight on the significant contributions of Nigeria’s telecoms sector to the nation’s GDP, highlighting its crucial role in driving economic growth and development.

Key findings of the report indicate that in 2023 alone, the telecoms sector directly contributed eight per cent to Nigeria’s total GDP. The report however said when factoring in the wider ICT industries’ value-added contributions, the figure surged to an impressive 13.5 per cent.

According to the report, considering the direct and indirect contribution of the mobile ecosystem, as well as the productivity impact throughout the economy, the telecoms sector’s contribution to Nigeria’s overall economic activity is much greater, estimated at N33 trillion in 2023, with N2.4 trillion in tax revenue contributions. 

The report titled: “The role of mobile technology in driving the digital economy in Nigeria,” addresses the challenges hindering the growth and development of the telecommunications industry and the crucial role of the mobile sector in Nigeria’s economic development.

“Connectivity to mobile services, including Mobile Money is the foundation on which digitalisation is built. The Mobile Network Operators (MNOs) are committed to investing to support the realisation of the digitalisation ambitions that will unlock economic growth and development in the country,” the report said.

The GSMA’s report emphasised that while 29 per cent of Nigerians are regularly using mobile internet, there remains untapped potential, as 71 per cent are not accessing these services on a regular basis, adding that an improved policy environment has the potential to help the industry boost coverage and adoption, that can result in 15 million additional internet users by 2028. 

The report also identified some challenges to infrastructure deployment to include:

Complex and costly process of securing Rights of Way (RoW), which significantly increased the time and costs associated with rolling out infrastructure; The complex tax environment in Nigeria and overlapping tax structure within the country; Rapid increases in the price of fuel; Increased government fees and levies; Increased demand for forex in an import-dependent environment, among others.

The report called for an enabling policy and regulatory framework that will be critical to realising the full potential of Nigeria’s digital transformation, as recognised in Nigeria’s Strategic Plan 2023-2027 as well as the Federal Ministry’s National Broadband Alliance for Nigeria (NBAN), adding that without universal access to digital connectivity, a broader digital transformation of the Nigerian economy is not possible.

To this end, the report recommended initiatives to support policymakers in creating an economic and regulatory environment that supports growth, investment, and competition. They include implementing a legal framework for Critical National Infrastructure to address challenges in building network infrastructure; Simplifying and improving the process for issuing RoW and standardising it across the country; Reducing the industry’s tax burden to help cut operating costs; and Creating a regulatory environment that supports sustainable investment.

Speaking at the report presentation, the Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, said: “The telecommunications sector is the backbone of the digital economy. We have a strong appreciation of the fact that if we are able to improve the business environment and invest in the sector, we can continue to improve the level of productivity. A country like Nigeria has significant opportunities to contribute to the world, but this is impossible without diversifying the economy.”

Head of sub-Saharan Africa at the GSMA, Angela Wamola, said: “High-speed connectivity is the bedrock of any digital nation, and the Nigerian government recognises the mobile industry’s role in laying key foundations on which digital transformation is built. Future policies should be geared towards reducing the cost and complexity of infrastructure rollout to encourage investment and boost the adoption of mobile broadband. The impact of such actions will go far beyond mobile, driving productivity gains across the economy and creating millions of new jobs in Nigeria.”