ICT GDP contribution hits N12.49tn over rising subscribers – NBS

TECHDIGEST – The sustained growth of telecommunication subscribers pushed the Gross Domestic Product contribution of the Information Communications and Technology sector, in real terms, to N12.32tn in 2022.

Last year, the total number of mobile telecom subscribers rose by 13.89 per cent to 222.23 million from the 195.13 million that was recorded as of December 2021. This pushed the contribution of the ICT sector to GDP to 16.51 per cent, compared to the 15.51 per cent recorded in 2021, according to the National Bureau of Statistics.

In 2021, the sector’s contribution was N11.23tn in real terms. Overall, the sector also grew by 9.76 per cent in real terms. In nominal terms, the sector contributed N21.15tn to GDP in 2022, and N17.78tn in 2021.

The NBS said, “The total contribution of the sector in real terms in 2022 stood at 16.51 per cent, higher than the 15.51 per cent reported in 2021.

The ICT sector has been one of the pillars of the country’s economy. In 2022, it was one of the drivers of the service sector, which contributed 56.27 per cent to the aggregate GDP in the fourth quarter of 2022.

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The telecoms sector is the major component of the ICT sector, contributing 82.17 per cent to the sector’s output in 2022. Nigeria has the largest mobile population in Africa and this is expected to continue to grow due to its large youth population.

In 2021, mobile technologies and services contributed almost $140bn of economic value in Nigeria and other Sub-Saharan African countries.

The ICT sector grew by 9.76 per cent in real terms. The NBS said, “The total contribution of the sector in real terms in 2022 stood at 16.51 per cent higher than the 15.51 per cent reported in 2021.”

In Q4 2022, the ICT sector with 13.55 per cent was the third highest contributor to GDP.

According to the country’s national statistics body, the information and communication sector is composed of the activities of telecommunications and information services; publishing; motion picture, sound recording and music production; and broadcasting.

Explaining the sector’s performance in Q4, 2022, the NBS noted, “The quarter-on-quarter growth rate recorded in the fourth quarter of 2022 was 18.16 per cent.

“Overall, the sector grew by 19.00 per cent in 2022. The Information and Communications sector contributed 10.42 per cent to the total nominal GDP in the 2022 fourth quarter, higher than the rate of 9.88 per cent recorded in the same quarter of 2021 and higher than the 9.58 per cent it contributed in the preceding quarter.

“The total contribution of the sector in nominal terms in 2022 stood at 10.61 per cent, higher than the 10.24 per cent reported in 2021. The sector in the fourth quarter of 2022 recorded a growth rate of 10.35 per cent in real terms, year-on-year.”

Overall, the sector improved by 9.76 per cent last year. “Of total real GDP, the sector contributed 16.22 per cent in the 2022 fourth quarter, higher than in the same quarter of the previous year in which it represented 15.21 per cent and higher than the preceding quarter in which it represented 15.35 per cent,” NBS stated.

A breakdown of the contributions to the ICT sector in real terms revealed that telecoms and information services contributed N10.13tn; publishing contributed N20.17bn; motion pictures, sound recording, and music production contributed N796.53bn, and broadcasting contributed N1.38tn in 2022.

In the previous year, telecoms contribution was N9.15tn; publishing was N19.11bn; motion pictures, sound recording, and music production were N752.71bn, and broadcasting was N1.31tn.

In 2022, the service sector, which is also composed of the activities of the ICT sector was a major driver of the economy. It grew by 5.69 per cent in Q4 2022 and contributed 56.27 per cent to aggregate GDP.

While the performance of the agricultural and industrial sectors was reduced in 2022, the NBS stated, “the performance of the services sector improved in 2022.”

According to the World Bank, the ICT sector is one of the sectors that did not contract during the 2020 recession, expanding by 9.5 per cent y-o-y as households and firms consumed more data services and subscriber numbers increased.

It stated that Nigeria’s period of expansion has been accompanied by improvements in total factor productivity which coincided with important sectoral reforms that boosted output and job creation in the financial and ICT sectors.

Highlighting one of the constraints of the sector in its ‘Nigeria Development Update (December 2022): Nigeria’s Choice’ report, the global bank said, “In key sectors such as ICT, sectoral regulations also make it harder for domestic and foreign entrants alike to challenge with incumbent firms:

“For example, Nigeria’s current regulatory framework with respect to ICT grants zonal monopolies for wholesale broadband infrastructure, and there are currently no regulations that mandate infrastructure sharing by dominant operators that may possess control over bottleneck facilities.”

Despite this growth, Nigerian subscribers have been grappling with bad network reception and low broadband penetration. On other hand, telcos have been plagued by many problems such as vandalism, rising energy costs, and rising operations costs.

Recently, MTN Nigeria, the biggest telecom provider in the country, experienced a service outage in Lagos and Abuja that plunged its subscribers into a communication blackout. According to the firm, the outage was caused by fibre cuts and sabotage.

According to the Nigerian Communications Commission, about 10,000 telecommunication infrastructures get destroyed yearly.

Despite its many challenges, the ICT sector is expected to continue to grow, and form a major economic bloc for the country.

New technologies, falling smartphone costs, and rising digital consciousness are anticipated to influence this growth.

According to the President of the National Association of Telecoms Subscribers, Adeolu Ogunbanjo, “When 5G rollouts fully, the impact of the sector will only grow.”

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