The Nigerian telecom regulator said investment in sector has now officially exceeded $75.6bn to underscore a pulsating industry despite a mix of challenges including galloping inflation and a shrinking national income in the last few years.
The Executive Vice Chairman/CEO of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, said the investment profile comprises of foreign direct investment (FDI) and local investment.
The sector has remained strong despite headwinds, Danbatta disclosed at an interactive session with stakeholders in the communications media ecosystem, in Lagos recently where he provided his scorecards and landmark developments that have shaped the trajectory of growth in the telecoms sector since he became the chief telecom regulator in August 2015.
According to Danbatta, in 2018, investment profile in the sector stood at $68 billion. This increased to $70.5 billion in 2019 and $72 billion in 2020. At 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.
Investment in 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.
Danbatta said through an 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 of 2001, when the sector was fully liberalised.
Similarly, he said the telecom sector has continued to be a major contributor to Nigeria’s economy through an impressive sectoral contribution to its Gross Domestic Product (GDP) quarterly, up from about 8.5 per cent in the third quarter of 2015, contributing N10.126 trillion to the nation’s GDP in 2022 alone.
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.
“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 is valued at N2.436 trillion and N2.851 trillion respectively.
“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 said.
Telecoms contribution to national GDP has grown significantly since the assumption of Prof. Danbatta as the EVC of NCC in August 2015, according to available data from NBS.
From 8.50 per cent in 2015, it grew 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 the 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.