Nigeria@64: Consolidating ICT sector’s growth sustainably

As Nigeria marks 64 years of independence, one sector of the economy that has performed relatively well is information and communications technology (ICT). But experts are more concerned about the need to consolidate and sustain the growth of the industry, ADEYEMI ADEPETUN writes.

With about 20 per cent gross domestic product (GDP) contribution to the economy, the information and communications technology (ICT) sector can be sentenced to be doing well. The ICT sector is reported to currently power nearly 90 per cent of Nigeria’s GDP.
   
The National Bureau of Statistics (NBS) said the ICT sector, which comprises the four activities of telecommunications and information services, publishing, motion picture, sound recording and music production and broadcasting, is the backbone of transformation management. 
    
As of the last eight months, the ICT sector recorded a growth rate of 4.44 per cent year-on-year, driven largely by activities in the telecommunications sub-sector, which contributed 16.36 per cent to the GDP in the real term.
    
According to NBS, the telecoms industry was the third-largest contributor to the real GDP in Q2 2024, coming behind only crop production and trade industries, which contributed 20.35 per cent and 16.39 per cent respectively.
    
The telecoms industry with over $76 billion investment, dominated by mobile network operators including MTN, Globacom, Airtel, 9mobile, and Internet Service Providers (ISPs) is also driving a lot of activities in every other sector of the economy.
   
The closest sub-sector to telecoms in the ICT sector in terms of contribution was broadcasting, which added 2.54 per cent.

Over two decades of telecoms revolution
TODAY, the over two decades of telecoms revolution in Nigeria has facilitated the connection of about 320 million lines from defunct NITEL’s  400, 000 telephone lines as of 1999.  It is interesting to say that of the 320 million connected telephone lines; 219 million of them have been active, enabling a teledensity of about 101 per cent.
    
In the same vein, there are about 164 million Internet users as of Q1 2024. The Nigerian Communications Commission (NCC) puts broadband users at 94 million with data consumption by Nigerians over 753,388.77 terabytes.
   
In Nigeria, for one reason or the other, 2G remained dominant with 56.9 per cent penetration, followed by 4G with 32.7 per cent, 3G, 9.04 per cent and 5G, 1.24 per cent.
   
These developments have propelled so many other sectors of the economy to action and productivity. For instance, the impact of the telecoms sector is visible in the financial sector. It has helped to drive financial inclusion. It is fast enabling telemedicine in the health sector, among others.

Mounting challenges remain
NONETHELESS, various challenges continued to besiege the telecoms sector, inclusive of rising inflation, high operating costs, limited access to foreign exchange, regulatory burdens, multiple taxations, and local government extortion.

ICT performance under Tinubu
IN a whitepaper released in June, the Minister of Communications, Innovation, and Digital Economy, Dr Bosun Tijani, said the ICT sector has made significant contributions to the economy between Q3 2023 and Q1 2024.
  
“Over the last three quarters (Q3, 2023 to Q1, 2024), representing President Bola Ahmed Tinubu’s time in office, the available data from the National Bureau of Statistics (NBS, June 2024) on the GDP of the Information and Communication sectors show that the nominal value of the sectors’ contribution grew from N7.1 trillion in Q3, 2023 to N8.35 trillion in Q4, 2023.
   
“Similar to the performance of many key sectors, it was followed by a “patterned fall” in Q1, 2024 to N7.86 trillion,” he said. According to him, the growth in the ICT sector is driven by the ambitious agenda of Tinubu’s administration for the digital economy as manifested in the Federal Ministry of Communications, Innovation and Digital Economy’s Strategic Blueprint, which is to enable Nigeria’s economic growth through enhanced productivity, facilitated by technological innovation.
   
He said the blueprint gave birth to several initiatives such as the 3 Million Technical Talent (3MTT) and investment in research initiatives like the AI Collective and Fourth Industrial Revolution Technology Application (4IRTA). He added that the initiatives are geared we are deepening the quantity and quality of our workforce while stimulating our local capacity to maximise the opportunities that emerging technologies offer to grow the country’s digital economy.

Need for a sustainable ICT sector
IN solidifying the sector’s growth, the industry, stakeholders believe has fared better, especially in the last 24 years, and there is a need to sustain the trajectory of growth.
   
Speaking with The Guardian, the President of the Association of Telecoms Companies of Nigeria (ATCON), Tony Izuagbe Emoekpere, said Nigeria has fared extremely well in technology when considering the huge impediments faced as a country.
    
Emokepere said the focus should be on how to ensure the sector is sustainable and thrives. He said Nigeria has the second lowest data tariff rate in Africa despite the huge operational costs compared to other countries.
  
“All the gains in technology development are at the risk of being lost. Infrastructure which is the bedrock of the industry needs to be deepened. Therefore, measures that will encourage investment are drastically needed. As such the attractiveness of the sector though, evident needs to be further enhanced by measures such as tariff adjustments and incentives such as tax rebates for certain levels of investments,” he stated.
    
Speaking in the same vein, ALTON Chairman, Gbenga Adebayo, said Nigeria has done very well, because in 2000 when the country turned 40, “we had about 500,000 telephone lines, even less than that. Today, the country is 64 years old, meaning 24 years later, we have over 200 million connections. We have done very well, though there are still challenges, but if we look at the growth and the development, the industry has done well. Despite the access gap, we can say over 90 per cent of Nigerians have access to one form of digital service or the other, which has been achieved in just 24 years. Let’s look beyond the challenges, but the significant changes we have had. No infrastructure in 40 years, but within 24 years, we closed the gap. ICT has enabled virtually all sectors of the economy. We congratulate all the players.”
     
Going forward, Adebayo, an engineer, said for telecoms sector, there must be a focus on sustainability.  He said to succeed is one, to maintain the success is another round of effort, “so, we shouldn’t go to celebration quickly. The government needs to now pay attention to the challenges we have, which have been threatening industry sustainability and they must do something. When the industry is sustainable, many other things will ride on that, including the digital economy, entertainment, new media, AI, IoT and others and it will happen quickly. The government needs to help the telecoms sector.”