Nigeria’s smartphone market grew by 1% on weak naira

Nigeria’s smartphone market grew by only one percent in the third quarter of 2024 because of the naira’s depreciation, which fell by over 60 percent between January and September 2024.

According to Canalys, a global technology market analyst firm, the naira fall against the dollar has continued to weigh on consumer demand. It noted that while Nigeria is the continent’s second-largest market by volume, its local currency fell by 69.9 percent from January to September but improved to 32.2 percent in August 2024.

In 2023, Nigeria unified its foreign exchange market, fuelling record-high inflation (33.88 percent in October). The country’s currency has become one of the worst-performing globally, declining from N470/$ in June 2023 to N1658.67/$ on November 21, 2024.

This shock hit the smartphone market hard and threatens the country’s digital inclusion efforts, as smartphones are critical in providing Nigerians with meaningful connectivity.

Outside of Nigeria, the African smartphone market grew by three percent year-on-year in the third quarter of 2024, reaching 18.4 million units. Egypt is the leading smartphone market on the continent, with double-digit growth of 34 percent for the third consecutive quarter, strengthening its position as the region’s fastest-recovering market.

The country’s growth is a testament to the success of localised production, which has reduced import reliance and slashed smartphone import bills by 99 percent to $1.65 million in H1 2024 from 2021.

After six quarters of double-digit growth, South Africa saw a 10 percent drop, as economic uncertainties dampened consumer spending despite easing inflation and interest rate cuts. Similarly, Kenya’s smartphone shipments dropped by 10 percent, attributed to elevated fuel costs, production challenges, and the economic fallout of anti-finance bill protests in June 2024.

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Also, Morocco, once a fast-growing market in North Africa, experienced a 24 percent decline due to hikes in import taxes.

A breakdown of the continent’s phone market revealed that Transsion continued its market dominance, with a 50 percent market share and eight percent growth, driven by iTel’s 34 percent growth and affordable offerings from Infinix and TECNO. Samsung recorded a 30 percent decline. Meanwhile, Xiaomi achieved 13 percent growth, leveraging products like the Redmi 14C in crucial markets like Nigeria and Egypt.

“In Q3 2024, the smartphone market in Africa presented a mix of opportunities and challenges,” said Manish Pravinkumar, Senior Analyst at Canalys. “Six consecutive quarters of shipment growth have been accompanied by ASP decline. The ASP of smartphones declined by 6 percent in Q3 2024. The surge in sub-$100 smartphones, up by 35 percent, underscores affordability challenges across the region.”

Canalys noted that rising operational costs, infrastructure gaps, and food inflation weigh on growth prospects. It highlighted that the future of the continent’s smartphone market hinges on the ability of governments and vendors to tackle these structural hurdles.

The analyst firm projected that smartphone shipments will grow by one percent in 2025. “Enhanced smartphone accessibility could drive the development of a robust digital economy, generating sustainable tax revenues over time,” Pravinkumar added.