It has long been speculated that Nigeria’s telecom sector is a significant contributor to the nation’s gross domestic product. One refers to the development as ‘speculations’ because there was never a comparative sectoral assessment as the ‘rebasing’ of the nation’s GDP undertaken recently by the National Bureau of Statistics (NBS). An appraisal of Nigeria’s GSM sector has simply been based on the sheer array of opportunities by way of direct and indirect jobs, income, business opportunities, small scale enterprises and sundry avenues it has provided for a large section of the population. In the main, some of the statistics peddled about the sector have been simple guess work. But the picture has changed.
Although most informed Nigerians very much question the statistics released from the rebasing of the economy as they fail to reflect the practical reality of poverty and unemployment, the telecoms sector stands out as an exception to the entire pool of doubts for many reasons:
a. Developments, achievements innovations in the sector have been practical and available for all to see and not in the realm of perception;
b. The sector has been the best benchmark for public-private sector collaboration. Investment has been private sector driven while regulation has been public sector based.
c. Continuously and consistently, the regulator sets up key performance indicators by which operators in the industry are assessed.
d. Tele-density and internet penetration have more than quadrupled in the last decade alone; and with the recent launch of the Broadband Masterplan, the scale of development is to the say the least, very promising.
e. Economic indices such as job creation, income generation and revenue by way of taxes and levies – indeed economics of scale at the macro and micro levels are in the upswing. Many more developments could be cited but for lack of space.
It is therefore no exaggeration that the sector has recorded appreciable growth – indeed more than every other sector of the Nigerian economy since year 2001. The sector’s assessment based on Nigeria’s re-valued GDP holds credibility when viewed against the background of a huge, almost insatiable market, potentials for diversification, and sundry possibilities yet to be explored.
Based on the information released by the NBS, it is now obvious that:
* The sector is the star performer in Nigeria’s economy in the period under review, comparatively challenging the much vaunted oil and gas sector;
*The sector contributed 8.68 percent to the nation’s economy equivalent to N6.97 trillion ($44.3 billion) out of the total rebased GDP estimate of N80.22 trillion ($510 billion).
*The licensing of GSM companies led to the unravelling of social and economic activities from e-commerce to mobile payments, and now, social media. There is also an increase in what is called citizenship journalism and participation in governance.
*There are an estimated 120 million mobile phone subscribers, up from less than half a million analogue telephone lines as at 2001. Private investors such as Airtel, MTN, Globacom and Etisalat, have competed doggedly, yet a significant share of the available market is still underserved.
*The potentials in the sector can be seen in the annual turnover of operators currently in the market.
* According to data from the Nigeria Communications Commission (NCC), Nigeria had 56 million internet subscribers as at September 2013. International bandwidth brought by undersea cables, has increased about 26 times to more than 9,000 gigabits per second (9 terabits) over the past four years.
*There is an appreciable growth in e-commerce, as a direct consequence of the policies of the Central Bank of Nigeria (CBN). This portends increased confidence in the nation’s telecoms sector. Thus, the number of payments made through mobile phone’s more than doubled to 2.4 million in the first half of 2012 from the same period a year earlier, internet payments rose 9.3 percent, according to the CBN.
Notwithstanding our cynicism and lack of trust in information emanating from officialdom, we have cause to be optimistic about advancements made in Nigeria’s communications sector in the last decade. This could be because as subscribers/consumers, the nature of the sector has allowed us to directly interface with the service providers without the meddling, often corrupting influence of government. The telecoms sector has become the model of a self-contained, almost self sufficient enterprise with a regulator exercising a substantial level of independence as though it were not just another government agency.
The NCC has cause to cheer, if not celebrate the data emerging from the rebasing of Nigeria’s GDP based on telecoms contributions to the nation’s economy. For once, it has become clear that with consistency, sectors outside oil and gas could be relied upon to oil the economy.
Fortunately, the telecom revolution phase of Nigeria’s development is giving way to the broadband revolution that will eventually impact positively in the lives of every Nigerian. The Nigeria Communications Commission must fast-track the growth of Nigeria to a knowledge economy. Initiatives such as the recent auction of 2.3 GHz spectrum license, a fully articulated Broadband Industry Infrastructure Framework, licensing of infrastructure companies, among others are schemes which would further boost the sector’s contributions to GDP in the foreseeable future. Kudos to the NCC and congratulations to the technocrats who are superintending Nigeria’s non-oil ATM.
Akinfemiwa, a business analyst, writes from Lagos.
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