In a recent National Bureau of Statistics (NBS) report, the Information and Communication sector (ICT) contributed 14.83% to Nigeria’s GDP in the second quarter (Q2) of 2023, higher than the 12.12% recorded in the same quarter of 2022.
The information and Communication sector is composed of the four activities of Telecommunications and Information services, which include, Motion Picture, Sound Recording, and Music Production; and broadcasting.
In nominal terms, in Q2 2023, the growth was recorded at 41.67% (year-on-year), a 27.56% points increase from the rate of 14.11% recorded in the same quarter of 2022 and 0.17% points lower than the rate recorded in the preceding quarter.
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The quarter-on-quarter growth rate recorded in the second quarter of 2023 was 13.99%. The sector in the second quarter of 2023 recorded a growth rate of 8.60% in real terms, year-on-year.
From the rate recorded in the corresponding period of 2022, there was an increase of 2.05% points. On a quarter-on-quarter, the sector exhibited a growth of 11.64% in real terms.
Of total real GDP, the sector contributed 19.54% in the second quarter, higher than the same quarter of the previous year in which it represented 18.44%, and higher than the preceding quarter in which it represented 17.47%.
The Information and Communications technology (ICT) sector in Nigeria has been lauded for playing a pivotal role in the nation’s GDP growth.
Notably, Nigeria is regarded as Africa’s largest ICT market with about 82% of the continent’s telecoms subscribers and 29% of internet usage. The Nigerian Communications Commission (NCC) estimates that Nigeria has about 85 million broadband subscriptions (penetrations of 44%) and 206 million lines in the voice segment (teledensity of 108%) as of June 2022.
To drive economic growth, the Nigerian government has been focusing on leveraging innovation and digital transformation. The government recognizes ICT as the enabler of developing other critical sectors including education, healthcare, Agriculture, and manufacturing.
In its drive to diversify the economy from oil and gas, the government is encouraging partnerships between local ICT companies and foreign investors. To promote these partnerships and grow an entrepreneurial ecosystem in the technology sector, the Nigerian government has supported government or private sector-led incubator hubs, youth innovation programs, and science technology parks.
Of course, despite the significant growth, there are several challenges that the ICT sector in Nigeria faces. They include the lack of reliable and affordable electricity, multiple taxation, regulatory bottlenecks, limited access to ICT infrastructure in rural areas, and a dearth of skilled ICT professionals.
Despite these challenges, the sector has continued to grow with the potential to play a significant role in the country’s economic development. It is worth noting that Nigeria aspires to become one of the top economies in the world, and the country recognizes ICT development and broadband access as critical requirements to achieve this vision.