FG notes ICT as sole sector to record positive growth in Q1 amid downturn

Despite foreign exchange (FX) scarcity, increase in fuel prices and general economic slowdown, Nigeria’s Information Communication Technology (ICT) industry has recorded positive growth, attributed to the increasing demand and improvement of telecoms services in the country.

While speaking at the Lagos Chamber of Commerce ICTEL Expo Wednesday, Adebayo Shittu, minister of communications, said “ICT is the only sector in the country to have recorded a positive growth in the first quarter of 2016.

“Since mobile services were first introduced in Nigeria in 2001, the market has grown rapidly, extending connectivity to over 150 million unique subscribers from just under 500,000 lines 16 years ago. The mobile market has been fiercely competitive with five major operators. Gladly, the 4GLTE services are currently being rolled out by some operators and mobile telecommunications have taken over 99 percent of the market share.”

This increased market share could be tied to the major shift in revenue of mobile telecoms operators from voice to data service provision, and the increased demand for data at a time where everything is connected through internet of things (IoT).

According to Shittu, the mobile ecosystem currently contributes over $10 billion in values add to the Nigerian economy, and mobile operators in the country have supported the creation of over 200,000 jobs across Nigeria in 2015.

The number of Nigerians accessing the internet through the Global System for Mobile Communication has increased from 81.9 million in January 2015 to 95.7 million in January 2016. These figures show that a significant amount of people conduct daily transactional and business operations over the internet, allowing them to save huge amounts of money on rents and transport.

The advent of the internet also gave rise to social media businesses, where goods and services are now advertised and sold through online platforms, and important presentations and documents could be sent via email and other online platforms.

Experts say increase in the adoption and affordability of internet data in the country is the reason for growth in the telecoms sector, despite unfavourable economic situations, and this will drive and support several services and applications in the economy and help citizens to save huge costs on office space rent and transport.

Speaking about the steady growth of the telecoms industry in Nigeria, Kamar Abass, CEO of NATCOM, says Nigeria is a leader in the mobile network market.

“If you look at Nigeria’s position relative to Africa, we are leaders. Significant amounts of the internet activity and the telecoms activity across Africa takes place in Nigeria, there is no question about that. So, if you have got money to put into business in the telecoms industry, make sure it is in Nigeria because we are currently reading about 17 percent of all the subscribers in Africa,” Abass says.

Muyiwa Ogungboye, MD/CEO e.stream networks, an indigenous internet service provider (ISP), says the ICT industry is one that can never be stagnant as technology continues to evolve overtime and although development can be slow, it will surely take place.

“The good news is that practitioners are still moving on, although progression may be slow, it is still steady and nothing is stagnant because it is a vibrant sector.”

In the telecoms sector alone, the Nigerian Communications Commission (NCC) recorded more than 215 million subscribers in March 2016, making Nigeria the largest telecoms market in Africa and the Middle East.

Telecoms operators in Nigeria and other sub-Saharan African nations will invest a total of $97 billion towards capital expenditure (CAPEX) from 2014 to 2020, against the $45 billion from 2008 – 2013 to expand their mobile data services, according to GSMA reports.

Although Nigeria’s overall telecoms capacity is relatively high and a number of high-capacity submarine cables have been brought into the country for development with the use of technology, some industry stakeholders say there are much more untapped potentials in the sector than what the present administration is making use of.

“Some years back, ICT was contributing less than 2 percent to the nation’s economy, but today, the sector is contributing more than 8 percent to the economy, which means we are moving but we can certainly do better, especially with our hardware industry because with software we are doing well,” Lanre Ajayi, former president of Association of Telecommunications Companies of Nigeria, says.

According to Ajayi, the dependency of the ICT industry on FX for hardware and infrastructure, especially at a time when it is almost impossible to source for it, is seriously hindering more growth potentials of the industry.