Naira Decline Threatens Digital Growth As Smartphone Sales Stagnate

Nigeria’s struggling currency and economic headwinds are undermining its potential as Africa’s second-largest smartphone market, with the sector recording only a one percent growth in the third quarter of 2024.

The naira’s depreciation – falling over 60 percent from January to September 2024—has strained consumer spending power, according to Canalys, a global technology market analyst firm.

While the African smartphone market expanded by three percent year-on-year, reaching 18.4 million units in Q3 2024, Nigeria’s growth lagged, threatening its digital inclusion goals.

Smartphones remain vital for enabling digital connectivity, but escalating prices due to the naira’s decline—from N470/$ in mid-2023 to N1658.67/$ by November 2024 – have pushed them out of reach for many Nigerians.

In contrast, Egypt demonstrated the success of localised production, achieving 34 per cent growth for the third consecutive quarter. By reducing import reliance, Egypt slashed its smartphone import bill by 99 per cent to $1.65 million in H1 2024 compared to 2021, solidifying its position as Africa’s fastest-recovering market.

RELATED

We’re Making Abia Farmers Globally Visible – Agric Firm

13 hours ago

Oil Prices Plunge 6% As Middle East Ceasefire Eases Supply Fears

16 hours ago

South Africa and Kenya, traditionally strong players, experienced declines of 10 percent each, driven by economic uncertainties and production challenges. Morocco also saw a significant 24 per cent contraction due to rising import taxes.

Despite these challenges, Transsion maintained dominance in Africa’s smartphone market, capturing 50 per cent market share, bolstered by the affordability of its iTel, Infinix, and TECNO brands. Meanwhile, Samsung faced a 30 percent decline, and Xiaomi posted 13 percent growth, leveraging cost-effective models like the Redmi 14C in Nigeria and Egypt.

“The surge in sub-$100 smartphones, up by 35 per cent, highlights affordability challenges across Africa,” said senior analyst at Canalys, Manish Pravinkumar, noting that the average selling price (ASP) of smartphones dropped by six percent in Q3 2024.

Canalys emphasised that Africa’s smartphone market growth hinges on overcoming structural barriers, such as infrastructure gaps and rising operational costs. It projects a modest one percent growth in smartphone shipments for 2025, with governments and vendors urged to collaborate on enhancing accessibility to drive a sustainable digital economy.