Telecoms investment into Nigeria has hit $75.6 billion. This is according to the Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta. The EVC disclosed this at an interactive session with stakeholders in the communications media ecosystem, in Lagos on Wednesday.
According to Danbatta, the investment profile in the nation’s telecommunications sector comprises both foreign direct investment (FDI) and local investment. This $75.6 billion was the total investment into the sector as of 2021 and indicates a 5% increase from the $72 billion dollars invested in 2020.
Demonstrating the growth of investments attracted to the telecoms sector over the years, Danbatta noted that in 2018, investment profile in the sector stood at $68 billion. This figure would increase to $70.5 billion in 2019, indicating a 3.67% increase from the previous year.
2020 witnessed a further increase of investments into the sector, rising to $72 billion. This represents a 2.12% increase from the previous year, a decreased in the percentage rate that was attributable to the global COVID-19 pandemic that halted economic activities for months, while forcing people to seek alternative means of communication.
But by the end of 2021, the figure rose to $75,560,563,417.79 ($75.6 billion). The latest figure is the current official investment profile computed in the industry up from the initial $70 billion investment in the last few years. The percentage growth of 5% is the largest since 2018 and demonstrates that the telecoms sector has bounced back from the effects of the pandemic.
The Executive Vice President noted that investment into the telecommunications sector in Nigeria is computed from two sources: the Central Bank of Nigeria (CBN), and the financial data obtained from service providers by the Commission.
While the CBN collects and calculates an element of the telecoms sector to include FDI, portfolio and others, the Commission collects investment figures from telecom licensees described as domestic investment arising from capital expenditure (CAPEX) which form part of the total investment in the industry.
The NCC CEO said through effective regulatory environment put in place by the Commission, the telecom sector has recorded tremendous growth from an initial investment profile of $500 million as at 2001, when the sector was fully liberalised.
Telecoms sector’s contribution to Nigeria’s economy
This is coming just months after the telecoms and ICT sector recorded remarkable contributions to the country’s Gross Domestic Product (GDP). Speaking on the impressive feat, the NCC boss said the telecom sector has continued to be a major contributor to the Nigeria’s economy through an impressive the sectoral contribution to the nation’s Gross Domestic Product (GDP).
Citing data from the National Bureau of Statistics (NBS), Danbatta said the telecoms sector contributed N10.126 trillion as an aggregate quarterly contribution to GDP in 2022. This is up from about 8.5 per cent recorded in third quarter of 2015.
In the first quarter, the sector contributed 12.94 per cent equivalent to N2.246 trillion while the second quarter witnessed an all-time high GDP contribution by the telecom sector to the nation’s economy, standing at 15 per cent and valued at N2.593 trillion. The sector’s contribution to GDP in the third was 12.85 per cent and in the fourth quarter, it grew to 13.55 per cent, which are valued at N2.436 trillion and N2.851 trillion respectively.
Prof. Umar Garba Danbatta
“The growth trajectory continued this year as telecommunications and Information Services sector in Nigeria delivered a handsome N2. 508 trillion in terms of financial value contribution to the nation’s gross domestic product, GDP, representing 14.13% in the first quarter 2023,” he added.
From 8.50 per cent in 2015, telecoms contribution to national GDP has grown to 9.13 per cent in 2016 and to 8.66 per cent in 2017. In the last quarter of 2018, telecoms contributed 9.85 per cent to national GDP while it added 10.60 per cent in the fourth quarter of 2019.
Also in the second quarter of 2010, it added 14.30 per cent to GDP; 14.42 per cent in the second quarter of 2021. The highest quarterly contribution to GDP by the sector to the economy was 15 per cent in the second quarter of 2022.
Overall, Danbatta said the sector has become a major enabler of economic development in Nigeria, as it continues to positively impact all the facets of the Nigerian economy.
“As the regulatory authority for the telecom sector in Nigeria, we are happy that the sector has recorded phenomenal growth statistics in the past two decades of the liberalization of the telecoms sector. However, we will not rest on our oars. We will continue to push upward to greater heights by encouraging expansion of frontiers to put Nigeria’s imprint on the global map of digital economy,” he said.
In addition to the growth in investment and GDP contribution, Danbatta said as of May, 2023, active voice subscriptions reached 221.3 million, equivalent of 115.91 per cent teledensity, while Internet subscriptions rose to 159.6 million.
Also, following the issuance of 3.5GHz spectrum licences for the deployment of Fifth Generation (5G) networks in Nigeria, marked by ultra-high speed internet, low latency and high capacity, and the subsequent commercial launch by two of the three licence holders, 5G subscriptions have grown to over 60,000 in many cities in at least 12 states of the Federation.
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