On July 23, 2024, around 7:15 p.m., a man’s phone fell from a moving bus on Third Mainland Bridge, Lagos. He asked the driver, who was in the fast lane, to stop so he could look for his phone. The driver did.
Other passengers, initially sympathetic, grew restless as the man’s search took him further away from sight. “Phones are now expensive. I don’t blame him for coming down,” one remarked.
The bus eventually left the man behind. The general mood on the bus was a mix of concern, pity, and fear. The prices of things are now over the roof, another passenger said, drawing nods of agreement.
In 2023, Nigeria abolished its fuel subsidy regime and unified its foreign exchange market, triggering a chain reaction of record-high inflation, 34.19 percent in June 2024.
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The country’s currency has become one of the worst-performing globally, declining from N769.51/$1 in July 2023 to N1609.29/$1 on July 26,2024. These economic shocks have hit the smartphone market particularly hard, threatening the country’s digital inclusion efforts.
The Alliance for Affordable Internet (A4AI) notes that smartphones play an important role in providing people with meaningful connectivity and are crucial in developing digital economies.
Smartphones have driven Nigeria’s internet consumption to record highs, with data consumption growing from 125,149.86 terabytes (TB) in December 2019 to 753,388.77 TB in March 2024.
“Smartphones have become the computer for many Nigerians today,” said Adia Sowho, former chief marketing officer of MTN Nigeria.
According to the World Bank, less than 20 percent of households in Nigeria owned a computer in 2023. “We import our phones, and higher dollar prices mean higher prices,” lamented Ifeanyi Akubue, president of the Phone and Allied Product Dealers Association of Nigeria (PAPDAN).
Since 2019, Nigerians have spent $3.82 billion importing telephones, including smartphones, according to the International Trade Center (ITC).
As a result, Nigerians are holding onto their old devices longer than before, often settling for lower-end brands or refurbished models when they intend to buy new ones.
“I wanted to change my Oppo phone to an iPhone 13 pro, but when I saw the price, I changed my mind. I am still using my old phone,” said Ibrahim Taiwo, an Abuja-based trader.
John Adekunle planned to upgrade his phone but reconsidered after seeing the price lists. “I wanted to buy the iPhone12 but could only afford the X. The prices were unreasonable. So, I am still using my old phone,” said Ebose Faith, Benin City-based hair dresser.
Moyin Ogunleye, who lives in Ibadan, Oyo State, sold her iPhone 11Pro, hoping to get a higher model, but could only afford the XR.
Ladi Omotayo, a Lagos-based engineer, found the Oppo she wanted to buy was N270,000, way above her budget.
On X, @Rufyb tweeted, “I mostly act like it’s normal, but deep down, I know it’s completely abnormal. I went to a phone store last weekend, and I was literally shaking my head. All the high devices I saw had prices ranging from N1 million to N2 million.”
Seun Osewa, founder of Nairaland, now uses mid-range Android phones. “I used to buy the latest Apple phones,” he tweeted. But he no longer does now.
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Between 2022 and 2024, inflation (15.6 percent in January 2022) has eroded the purchasing power of consumers. According to the National Bureau of Statistics, inflation wiped N7.61 trillion off consumer spending in 2023.
Smartphone prices have surged by as much as 86 percent between 2022 and 2023. For example, a mid-range Samsung Galaxy A52 jumped from N166,000 in 2022 to over N300,000 in 2023. Entry-level phones like the Samsung A 13s cost over N300,000 in 2024 as against less than N150,000 in early 2023.
Gideon Ajayi, who owns a phone store, lamented, “Phone prices are now 30 percent higher from last year, and most people can’t afford them.”
A staff member at a SLOT Solutions branch on Lagos stated, “Phones that were N180,000 to N250,000 in 2023 are now selling for N310,000.”
Phone vendors are feeling the pinch. According to Mrs Confidence Sorochi, a phone vendor at the Computer Village, sales are down by as much as 30 percent.
Karl Toriola, chief executive officer of MTN Nigeria, the country’s biggest telco by market share, noted in early 2024 that high prices are hindering digital inclusion. GSMA, the global association for telcos, revealed that 68 percent of Nigerians in rural areas and 42 percent in urban areas were without smartphones in 2022.
Of the 219.01 million GSM lines in the country as of March 2024, 56.97 percent were on 2G.
Adeolu Ogunbanjo, national president of the National Association of Telecoms Subscribers (NATCOMS), explained that smartphones are critical to digital and financial inclusion.
“People need to get access,” he said. “What is happening now (high cost of things) isn’t peculiar to ICT. But mobile phones are a need. You need them to enhance whatever you are doing,” Akubue of PAPDAN noted. “People want to buy Samsung, expecting it to be N150,000, but discover the phone is about N350,000. Most of these people end up frustrated and buy phones of lower value.”
This crisis has fuelled the demand for entry-level phones, with Chinese brands like Transsion and Xiaomi leading the charge.
Manish Pravinkumar, senior consultant for Middle East and Africa(MEA) at Canalys, said, “The rising cost of living, driven by record-high inflation, has weakened the purchasing power of many Nigerians, increasing demand for entry-level phones.”
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Arnold Ponela, a senior research analyst at the International Data Corporation (IDC), highlighted that Nigeria recorded a growth in smartphone demand in the first quarter (Q1) of 2024 because of entry-level Transsion brands and Xiaomi.
Akubue of PAPDAN further told BusinessDay that companies now offer easy-buy options, allowing customers to spread device payments over several months. He, however, noted that this option is risky.
“There are still issues because of declining income and people not being able to pay,” he said.
More people are buying refurbished phones and fairly used versions of their dream phones. In 2023, the used smartphone market grew by 9.5 percent, according to IDC.
In 2021, Counterpoint Technology Market Research revealed that Nigeria had a sizable second-hand smartphone market, and the number of Nigerians who bought second-hand iPhones and Samsung rose by 10 percent. The outlook for smartphone affordability remains bleak.
Pravinkumar of Canalys noted, “In the second half of 2024, rising component costs and local currency depreciation will likely lead to higher retail prices.” According to Ogunbanjo, this will need regulatory intervention. “Stakeholders might lead a campaign to the NCC to do something about this. It is very important for people to get digitally included first,” he said.
