The Nigerian telecommunications sector under the supervision of the Nigerian Communications Commission (NCC), has become a major enabler of economic development in Nigeria, as it continues to positively impact all the facets of the Nigerian economy.
Telecommunications has become the substructure upon which all other economic pillars are riding. The rise of digital technologies and broadband technologies has been enabled by massive investments in infrastructure by telecommunications operators in the country.
With the telecom industry playing a critical role in driving economic growth and enabling digital transformation, the chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, has commended the NCC‘s commitment to quality regulation, attributing the success of the telecom industry in the country to the regulatory environment it enjoys.
The ALTON Chairman‘s commendation and the ongoing efforts of the NCC under Danbatta‘s leadership highlight the commitment to creating an enabling regulatory environment that fosters innovation and sustainable development.
Adebayo speaking during a meeting with mobile network operators held at the NCC‘s office in Lagos on Tuesday on the Expanded Revenue Assurance Solution (ERAS) project in the telecommunications industry, expressed his pride in Danbatta‘s remarkable administrative skills, challenging the notion that engineers are not good administrators. He described Danbatta as an excellent administrator, highlighting his instrumental role in the growth and development of the industry.
In the same vein, the executive Vice Chairman, NCC, Prof. Umar Garba Danbatta stated that the Nigerian telecommunications industry the growth has been progressive. “As the regulatory authority for the telecom sector in Nigeria, we are happy that the sector has recorded phenomenal growth statistics in the past two decades of the liberalization of the telecoms sector.
“However, we will not rest on our oars. We will continue to push upward to greater heights by encouraging expansion of frontiers to put Nigeria’s imprint on the global map of digital economy,” he said. The NCC CEO said through 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 at 2001, when the sector was fully liberalised.
Similarly, Danbatta said the telecom sector has continued to be a major contributor to the Nigeria’s economy through an impressive the sectoral contribution to the nation’s Gross Domestic Product (GDP) quarterly, up from about 8.5 per cent in third quarter of 2015, contributing N10.126 trillion to the nation’s GDP in 2022 alone.
Telecoms contribution to national GDP has grown significantly since 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 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. 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 are 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 per cent in the first quarter 2023,” he said.
In addition to the growth in investment and GDP contribution, Danbatta said, “As of May, 2023, active voice subscriptions reached 221.3 million, equivalent of 115.91 per cent teledensity, while Internet subscriptions rose to 159.6 million.
Also, the investment profile in the nation’s telecommunications sector, comprising foreign direct investment (FDI) and local investment, has reached $75.6 billion as of 2021.
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.
According to the CEO of NCC, broadband subscriptions on Third Generation (3G) and Fourth Generation (4G) networks increased to 92.2 million, representing a 48.28 per cent broadband penetration in the country.
Also, following the issuance of 3.5GHz spectrum licences for the deployment of Fifth Generation (5G) networks in Nigeria, marked by ultra-high speed internet, low latency and high capacity, and the subsequent commercial launch by two of the three licence holders, 5G subscriptions have grown to over 60,000 in many cities in at least 12 states of the Federation.
Danbatta assured of the Commission’s commitment to always give concrete expression to the Federal Government Executive Order 001 focused on Ease of Doing Business and other digital economy-oriented policies, by embarking on various regulatory initiatives that support a friendly investment climate for investors in Nigeria and enhance value for money for telecom consumers.
The EVC particularly commended the media as a strategic partner and enabler of growth in the telecom sector “through accurate, adequate and timely reporting of all regulatory activities of the Commission.”
