Nigeria’s digital economy has emerged as a powerhouse, contributing an impressive N7 trillion to the country’s GDP in the first quarter (Q1) of 2025, solidifying its position as one of the nation’s top-performing sectors.
This remarkable achievement underscores the transformative impact of technology and innovation on Nigeria’s economic landscape, driven by advancements in telecommunications, fintech, e-commerce, and digital services
According to a report released by the National Bureau of Statistics (NBS), Nigeria’s total real GDP grew by 3.13% in Q1 2025, down from 3.76% in Q4 2024. The Digital Economy sector accounted for 14.19% of the total N49.34 trillion real GDP.
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The sector, comprising the Information and Communication (I&C) sector and the Financial Institutions (FI) sector, posted real GDP contributions of 10.59% and 3.60% respectively. Both sub-sectors ranked among the top 10 performers in the Q1.
The I&C sector recorded a year-on-year (YoY) growth of 7.40% in real terms, despite a -8.86% contraction quarter-on-quarter. Its contribution to total real GDP (10.59%) was an improvement over the 10.17% recorded in the same quarter of 2024. Notably, the telecommunications industry dominated the I&C sector, contributing N4.2 trillion out of the total N5.2 trillion, representing 80% of the sector’s value. The remaining 20% came from broadcasting, publishing, and creative media services.
The Financial Institutions sector, which includes banks, fintechs, and insurance providers, contributed N1.8 trillion to GDP, with financial institutions accounting for N1.6 trillion (90.74%) and the insurance industry contributing just under N200 billion (9.26%).
Nigeria’s digital economy has continued to show impressive growth. The sector revenue rose from US$5.09 billion in 2019 to US$7.13 billion and US$9.97 billion in 2020 and 2021, respectively. It is projected that the sector revenue will reach $18.30 billion by 2026. In terms of investment in start-ups on the African continent, Nigeria ranks ahead of South Africa, Egypt, Kenya, and Ghana.
A McKinsey study published in 2017 predicted that the digital economy in Nigeria would contribute 3.0 million new jobs and add $88.00 billion to the economy over a decade. However, for a thriving and inclusive digital economy, African countries such as Nigeria need to build the critical foundations of the digital economy.
These foundations are interdependent and require public and private sector solutions. In Nigeria, the National Information Technology Development Agency’s (NITDA) Digital Economy Development Department aims to help the Federal Government meet its targets set by its National Digital Economy Policy and Strategy (NITDA, 2022).
The department aims to facilitate an effective, inclusive, and sustainable digital economy by:
- Transforming Business Models: Promoting the adoption of digital business models and markets across sectors to enhance economic competitiveness.
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Creating an Enabling Environment: Providing guidelines, frameworks, and regulations to foster digital service exchanges and the trade of digital goods.
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Promoting Digital Literacy: Implementing capacity-building programs to boost digital skills, supporting the government’s goal of achieving 70% digital literacy by 2027 and 95% by 2030.
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Driving Economic Growth: Supporting initiatives to increase digitally enabled Micro, Small, and Medium Enterprises (MSMEs) and Integrated Digital Ecosystems (IDEs), contributing to job creation and economic diversification.
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Fostering Innovation: Encouraging the development and integration of emerging technologies like AI, IoT, blockchain, and robotics to address local challenges and create economic opportunities.
This is driven by efforts to boost digital literacy, digital commerce promotion, technology adoption, and industry collaboration to transform digital business models and markets across all sectors and industries while providing an enabling environment for exchanges of digital services and digital goods.
Digital innovation and disruptive technologies is a crucial key engine to the growth of the Nigerian economy, and the achievement of the diversification from oil dependency.
As Nigeria looks into the future, supporting these efforts by strategic investments in digital literacy, infrastructure and creating key linkages are crucial.