BY CHIMA AKWAJA, Lagos
With the entrance of Coronavirus (Covid-19) pandemic into Nigeria a year ago, the country joined other nations in a sleepless battle to contain the spread of the virus. This lead to the closure of the country’s borders as well as economic activities being shutdown nationwide.
The negative impact of Covid-19 led to Nigeria witnessing a second recession within five years. Although short-lived, the recession compounded the devastating effects that Covid-19 wrecked on the global economy. Thanks to some sectors of the Nigerian economy such as telecommunications which stood out during the worst months of Covid-19 and the second recession, the country was able to come of the recession faster that economic experts had predicted.
Outstanding GDP Figures
The telecommunications sector, regulated by the Nigerian Communications Commission (NCC), stood out tall among other sectors. Its performance helped to lift the country out of recession in the fourth quarter of 2020, contributing 12.45 percent to the country’s Gross Domestic Product (GDP).
From 2015, despite recession and other macro-economic challenges, the telecoms segment’s Gross Domestic Product (GDP)’s contribution alone increased from 8.50 percent in August 2015 to 10.88 per cent as of Q1 2020. The entire ICT contribution was even higher at 14 percent as of the first quarter of 2020, according to the latest data released by the National Bureau of Statistics (NBS).
According to the latest data released by the National Bureau of Statistics (NBS), telecommunications & Information Services under Information and Communication grew by 17.64 per cent in Q4 2020 from 17.36 per cent in Q3 2020 and 10.26 per cent in Q4 2019.
In the latest NBS report, agriculture, industries, and services sector, under which telecommunications is categorised, contributed 26.95 per cent, 18.77 per cent, and 54.28 per cent respectively. This is a pointer to the fact that telecommunications, trade, services and crop production are the main drivers of Nigeria’s exit from recession.
In specific terms, NBS report showed that largest sub-sectors in Q4 2020 are crop production at 3.68 per cent, crude petroleum and natural gas at 8.2 percent, trade at 14.9 per cent, telecommunications & information services at 12.45 per cent, and real estate at 5.7 per cent, the report says.
The telecommunications sector has, in the last five years been a major driver of the digital economy agenda of the federal government, as it has continued to provide the needed digital sinews that support the economy, especially during the COVID-19 pandemic and its attendant restriction period.
Telecoms operators such as MTN, Airtel, Glo, 9mobile, Smile Telecoms amongst others rallied round the NCDC during the lockdown providing free data and toll free lines to frontline health workers and free SMS to subscribers that helped to keep the Nigerian economy afloat through seamless communication when all other sectors of the economy were on lockdown.
Immediate past chief executive officer, MTN Nigeria, Ferdi Moolman said 2020 was a challenging year for all. “The unprecedented disruption that the COVID-19 pandemic caused the businesses and people we serve, challenged us in new and demanding ways. The impact continues to evolve. Adoption of our data and digital services accelerated as lockdowns and gathering restrictions were imposed, and work-from-home became the norm for many.
“Our employees adapted quickly to working remotely to ensure that our customers remained connected. I am incredibly proud that we were able to meet the challenges faced in 2020, by pulling together, working closely with the government and our regulators, and understanding our customers’ evolving needs,” Moolman added.
On his part, the president, Association of Telecommunication Companies of Nigeria (ATCON), Mr. Ikechukwu Nnamani who was elated by the sector’s contribution to the GDP said, “Our interventions have helped to advance the telecom and ICT services in the country, consistently leading to an increase in the contribution of telecom and ICT to Nigeria’s Gross Domestic Product (GDP) over the past decades.
The investment in the telecom and ICT sector has grown to $70 billion by the end of 2019, with $32 billion of that investment happening in the last five years. We have always focused on creating a cordial environment where all the service providers irrespective of their size are able to meet and interact on the challenges facing the industry,” he said.
Since the outbreak of the pandemic, government institutions, businesses and individuals have relied heavily on telecoms services to carry out their daily operations and official routines. In response to the increased demand, the Commission put a number of regulatory measures in place to ensure seamless access by Nigerians to telecommunication services and protect against any adverse impact on the quality of service enjoyed by consumers.
The steady growth of the telecoms sector over the years with its pervasive positive impact on all other sectors of the economy in terms of increased automation of processes and digital transformation in service delivery has been remarkable. The growth trend since 2015 has reawakened hope that the economic diversification dreams of the country may finally be a reality as the sector continues to energize significant economic activities in the services sector of the economy.
Through effective regulatory regime emplaced by the Commission, under the leadership of its Executive Vice Chairman (EVC), Prof. Umar Garba Danbatta, telecoms investment grew from about $38 billion in 2015 to over $70 billion currently.
Also, broadband penetration increased from 6 per cent in 2015 to 45.02 per cent at December, 2020, indicating that 85.9 million Nigerians are now connected on 3G and 4G networks which provide enhanced high-speed Internet that has continued to boost efficiency and increase productivity across the economic spectrum.
Recent statistics also indicate that between 2015 and December, 2020, active voice subscriptions have increased from 151 million to 204.6 million, with teledensity standing at 107.18 per cent. Basic active internet subscriptions grew from 90 million to 154.3 million during the period.
The Commission said it is committed to its culture of quality regulation of the telecommunications industry that ensures a stable and robust sector which drives the digital economy agenda of the federal government and ultimately leads in the growth of the country’s GDP.