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While the International Monetary Fund (IMF) projects Nigeria’s Gross Domestic Product (GDP) to shrink by 5.4% in 2020 due to COVID-19, the country has continued to record expansion in its telecommunications with information services sector.
Stakeholders attribute the rising contribution of telecoms to the country’s GDP, despite a shrinking economy, to government unwavering commitment to economic diversification and the robust regulatory environment provisioned by Nigerian Communications Commission (NCC).
According to a report by The Guardian newspaper, the sector remains the enablers of growth with N2.3 trillion or 14.30 per cent GDP contribution in the second quarter of 2020.The contribution of the sector translates to N2.272 trillion, up from N1.821 trillion in the first quarter of the year. This, according to figures released by National Bureau of Statistics (NBS), indicates an increase of 31.43 per cent.
Also, IT Edge News in a recent report on the latest industry figure provided by the NBS, indicated that Nigeria’s burgeoning ICT sector now accounts for 17.83% of the country’s Gross Domestic Product (GDP) in the second quarter of 2020 (Q2 2020).
The industry posted an upward growth above 14.07% of GDP in the previous quarter to indicate resilience in spite of the COVID-19 pandemic.
“It is worthy of note that the ICT sector contributed 17.83% to the total real GDP in Q2 2020, 20.54% higher than its contribution a year earlier and in the preceding quarter, in which it accounted for 14.07%. This contribution is unprecedented,” said the Minister of Communications and Digital Economy, Dr Isa Ali Ibrahim Pantami.
According to the NBS, “Nigeria’s GDP decreased by –6.10% (year-on-year) in real terms in the second quarter of 2020, largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.”
The non-oil sector contributed 91.07% to the nation’s GDP in Q2 2020 as opposed to the 8.93% contributed to total real GDP by the oil sector.
Unprecedented growth reflects sound regulatory environment, government’s commitment to diversification
The 17.83% growth recorded by the entire ICT industry with the 14.30% contribution of the telecoms sub-sector is unprecedented. As The Guardian checks showed, in 2015, telecoms’ contribution to GDP stood at eight per cent and has grown significantly quarter-on-quarter and year-on-year to reach the current milestone of 14.30% – a leap from the 10.88 per cent in Q1 2020.
For many industry stakeholders, the steadily rising contribution of the telecoms sector to GDP is as a result of “sound regulatory environment enthroned by the NCC,” and the unwavering commitment of the Nigerian government to diversification of the economy with much focus on the ICT sector.
Nigeria has continuously sought to diversify its economy as crude oil income plunges impacting heavily on the strength of the country’s currency: the naira. In the last decade, government has seemingly invested to encourage a portfolio of entrepreneurs in the ICT industry with a policy thrust targeting to liberalize the sector.
“The support of President Muhammadu Buhari, has contributed immensely to the impressive developments in the sector,” said Pantami.
“The unprecedented contribution of ICT to Nigeria’s GDP can be attributed to dynamic and results-oriented leadership which has been acknowledged and appreciated by a wide spectrum of the stakeholders in the sector…The GDP Report has shown how critical the ICT sector is to the growth of our country’s digital economy and, by extension, the general economy,” the minister added.
Stakeholders applaud NCC
The stakeholders, including the Association of Telecoms Companies of Nigeria, (ATCON), Association of Licensed Telecoms Operators (ALTON), and the National Association of Telecoms Subscribers (NATCOMS), who spoke with The Guardian on the matter, commended the regulatory framework driving the digital frontiers in the last five years.
The ALTON Chairman, Gbenga Adebayo, thanked all industry players for their resilience and consistency of purpose.
Adebayo hinged the growth on so many factors including the investor friendly policy and regulatory environment championed by the leadership of NCC, commitment of all stakeholders, consistent investment on network maintenance and expansion, and sacrifice by sector operators.
To sustain this growth, the ALTON Chairman said the country should continue to invest in network expansion and maintenance operations, access to foreign exchange to procure network critical equipment, consistency in policy and policy environment.
Adebayo said there should be access to spectrum and friendly policies around its allocation, assignment and cooperation between the stakeholders.
ATCON President, Olusola Teniola, said: “telecoms industry has remained bullish owing to the quality of leadership at the helm of affairs at the Commission.”
He added that NCC had become reference point in telecoms regulatory ecosystem in Africa and beyond.
In the same vein, President of National Association of Telecoms Subscribers of Nigeria (NATCOMS) Adeolu Ogunbajo, said the proactive regulatory approach of Danbatta has helped made telecoms “the oxygen that keeps economic activities afloat during the lockdowns and consumers are appreciative of the fact that the Commission, working with its supervising Ministry, didn’t allow consumer to suffer serious disruption to quality of service and quality of experience.”
Additional Source: The Guardian (Nigeria)
