Despite Challenges, Telecoms Industry Contribution to Nigeria’s GDP Maintained Steady Growth in Three Years

Emma Okonji

Despite the difficult times faced by telecoms operators in delivering telecoms services across all sectors of the Nigerian economy, the contribution of telecoms industry to Nigeria’s Gross Domestic Product (GDP), has maintained a steady growth curve in the last three years, latest statistics released by the Nigerian Communications Commission (NCC), has revealed.

Some of the challenges include; Right of Way (RoW) issues, multiple taxes imposed by state governments, and incessant closure of telecoms sites by states agencies,

The statistics, which THISDAY obtained from the website of NCC, showed that in Q1, 2021, telecoms contribution to GDP was 11.66 per cent, and in Q2, 2021, it increased to 14.42 per cent, but dropped to 11.94 per cent in Q3, 2021, before it increased again to 12.61 per cent in Q4, 2021.

The statistics further explained that in Q1, 2022, telecoms contribution to GDP increased again to 12.94 per cent, with another increase to 15.00 per cent in Q2, 2022. GDP contribution however dropped to 12.85 per cent in Q3, 2022, but increased again to 13.55 per cent in Q4, 2022, with another increase to 14.13 per cent in Q1, 2023, before it reached a peak of 16.06 per cent in Q2, 2023.

The GDP contribution however dropped again to 13.50 per cent in Q3, 2023, but increased again to 14.00 per cent in Q4, 2023, with a further increase to 14.58 per cent in Q1, 2024.

A report released by the National Bureau of Statistics (NBS) in November 2023, showed that Nigeria’s GDP grew by 2.54 per cent in the third quarter (Q3) of 2023. The growth rate, according to NBS, is higher than the 2.25 per cent recorded in the third of quarter in 2022 and higher than the second quarter 2023 growth of 2.51 per cent.

NBS disclosed that the performance of the GDP in the third quarter of 2023 was driven mainly by the services sector, which recorded a growth of 3.99 per cent and contributed 52.70 per cent to the aggregate GDP.

Although Agriculture and the Oil Sector contributed meaningfully to GDP growth in 2023, the non-oil sector, where ICT plays prominently, contributed over 95 per cent of Nigeria’s GDP in 2023. 

Commenting on the telecoms industry contribution to GDP, Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, told THISDAY that the telecoms’ impressive contribution to Nigeria’s GDP, underscored the important role of telecommunications to the development of every sector of the Nigerian economy.

Adebayo however warned that the challenges faced by telecoms operators in delivering telecoms services to Nigerians in recent times, were getting out of proportion, insisting that such challenges could erode the gains of telecoms if not addressed by government.

“Despite the achievements recorded in the telecoms sector in the past three years, the sector has its own challenges that are negatively affecting the growth of telecoms and ICT development in the country. Most agencies of government are bent on imposing multiple taxes on telecoms operators, a development that was resisted by the telecoms operators in 2023, which led to incessant closure of telecoms sites by government agencies in some states of the country like Kogi State.

“Again, telecoms operators are owed huge sums of money by money deposit banks, under the Unstructured Supplementary Service Data (USSD) agreement, reached between telecoms operators and banks, which has now accumulated to over N200 billion,” Adebayo said.

He further said if such huge sum of money was paid and invested into the telecoms industry for network expansion, it would have further improved service quality across networks.