Riding on ICT to exit recession
Nigeria retained its rating as the fastest growing Information and Communications Technology (ICT) market in Africa and amongst the fastest growing in the World even in the face of recession. The sector has been described as the path to current economic recovery because of its contribution to the economy and future potential.
Telecoms market brings to the economy excess of $68 billion investment in local and Foreign Direct Investment (FDI) in the last 16 years. Currently, there are over 155 million active telephone lines in Nigeria with a tele-density of over 110 per cent. Connected data service subscribers including mobile Internet hovers around 93 million.
Nigeria now recognises that the nation is in the next phase of the telecoms revolution that would be driven by young talent through innovation in ICT under robust Broadband access with attainment of the 30 per cent target by 2018. It is safe to say that Nigeria can meet the 30 per cent broadband penetration target if all efforts are centralized with an enabling environment, serving as a pillar.
There is no gainsaying the fact that so much still need to be done in terms of actually implementing the National Broadband Plan (NBP); however, there has been optimism, which has been corroborated by the latest report of the International Telecommunications Union/United Nations Educational, Scientific and Cultural Organization (UNESCO) Broadband Commission for Sustainable Development which credits Nigeria with 20.95 per cent broadband penetration as at August 2016.
Nonetheless, to meet next year’s target of wide spread broadband Internet in Nigeria, the Federal Government would need to achieve three things before the end of 2017.These, according to search giant, Google, include bridging the infrastructure gap in the country; stimulating online demand and ensuring increase in capacity building among Nigerians.
When the NBP is fully implemented, services would improve greatly in the country because the broadband is a faster medium to get access to the Internet as compared to the dial-up. It is faster in terms of data transfer, upload and download, and the connectivity is much better as files, images and data are transmitted much faster.
It is indisputable that virtually other sectors of the Nigerian economy today run effectively on ICT. For instance, the robust banking sector is riding on the success of available quality telecoms network as many Automated Teller Machines (ATM) are connected to telecoms operators infrastructure as well as the number of PoS machines. Also, education, health, agriculture and a host of others ride on ICT infrastructure.
Today, one of the operators, MTN delivers Small and Medium Enterprises (SMEs) solutions that have enhanced efficiency and productivity of small businesses. Some of these SMEs have also moved from small business to become big businesses with increased capacity.
Apart from connecting banks to customers, MTN with over 40 per cent subscribers of the total 155 million telecoms services users in Nigeria, also offers specific products on insurance and other value proposition services to add value to life as well as unlocking the ICT potentials for social economic development.
Future and ICT
Nigeria has been projected to occupy the 13th position as one of the leading G20 economies in the World by 2050, according to a forecast by PricewaterhouseCoopers.The report, which was released recently by the accounting firm, disclosed that Nigeria and Vietnam would move into the top 20 leading economies by 2050 at 13th and 19th place respectively.
According to the report, ‘’Nigeria could be the fastest growing country in our sample due to its youthful and growing working population, but this does rely on using its oil wealth to develop a broader based economy with better infrastructure and institutions as regards rule of law and political governance and hence support long term productivity growth – the potential is there, but it remains to be realised in practice’’. But global oil price has continued to impact on the economy.
ICT’s Contribution to GDP
Meanwhile, as at September 2016, Nigeria Gross Domestic Product (GDP) expanded 8.99 per cent over the previous quarter. GDP growth rate in Nigeria averaged 0.77 per cent from 2013 until 2016, reaching an all time high of 9.19 per cent in the third quarter of 2015 and a record low of -13.70 per cent in the first quarter of 2016.
`Furthermore, recent statistics, the GDP in Nigeria shrank 2.24 per cent year-on-year in the third quarter of 2016, following a 2.06 per cent decline in the previous period and compared to market expectations of a 2.58 per cent decline. Lower oil prices continued to hurt the oil sector, which slumped for the fourth straight quarter while the non-oil sector was flat after shrinking in the previous two periods.
Economic recovery and growth plan
Nigerian Economic Recovery and Growth Plan (NERGP) will be driven by Science, Technology and Innovation, with the youths being targeted to deliver the plan’s success. The Minister of Budget and National Planning Minister, Senator Udoma Udo Udoma said government is working strategically to address the economic challenges of the country with appropriate attention focused on young people, who are the source of the country’s economic strength.
He said the ERGP, the country’s medium term plan, is tailored in such a way that it will be driven largely by ideas and innovation, areas where the young people have comparative advantage, particularly in high-tech perspectives that will urgently transform the economy.
The plan envisages that by 2020, Nigeria would have made significant progress towards achieving structural economic change with a more diversified and inclusive economy. This, he added, would heavily depend on young people who apart from their bubbling energy and fresh ideas are also more technology savvy.
Experts view on ICT as path to Nigeria’s economic recovery
Nigeria young population possesses enough incentives to attract investors as Africa’s biggest ICT hub. The Minister of Communications, Barr Adebayo Shittu, disclosed that the country hoped to create two million jobs from the ICT sector.
“Information and Communication Technology today creates more jobs than oil and gas and that can further be enjoyed, as investors from China would be investing N15 billion dollars in the ICT sector in Nigeria. So, potential two million jobs will be made available through investments in the sector,” Shittu said.
The Chairman, Zinox Group, Leo Stan Ekeh told CNN Tech that with right investment in technological platforms and the overwhelming support of the government in providing the requisite enabling environment, Nigeria can effortlessly produce global billionaires from the Information and Communication Technology (ICT) sector.
Zinox Group boss is confident that with significant investment in ICT, the challenge of youth unemployment, inadequate opportunities and growing restiveness among the youth can be arrested.
For this to happen, however, he said government has to actively engage the youths by investing massively in ICT which, in his opinion, has become the fancy of young people.
Ekeh is a firm believer in the numerous opportunities which abound in the rapidly evolving ICT-driven future – a knowledge economy in which wealth is no longer the exclusive preserve of a privileged few.
In his opinion, the former President of the Association of Telecommunications Companies of Nigeria (ATCON), Lanre Ajayi said while there is no doubt that the telecoms sector is also facing serious setbacks in the current economic downturn, ICT remains the best alternative to growing the Nigerian economy. He noted that recent statistics shown that the telecoms sector is not performing the way it should but, the industry drivers need to be more proactive in sustaining the growth of ICT in Nigeria.
This he said is important because of the multiple effects on other sectors of the economy. Also, the current ATCON President, Olusola Teniola called for shareholders engagement in addressing the industry problems.
Teniola, said the operating landscape in Nigeria was extremely tough in 2016, considering the issues and headwinds that confronted the industry.According to him, these challenges included the foreign exchange issues, which resulted into steep devaluation of Naira versus the USD$ and impacted negatively on the Capital Expenditure (CAPEX) program of many operators in the telecoms industry.
He added that the threat of further taxes being imposed on the industry in the form of Communications Services Tax (CST) and other problems, including reduced Foreign Direct Investment into the telecommunications sector and then the contraction of revenue accrued to the industry versus previous years’ astronomical growth are instances that should be avoided in 2017.
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