The ICT Sector Remains the Bright Spot of Nigeria’s Economy

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March 23, 2023/CSL Research

The ICT sector continues to be a major contributor to the country’s GDP growth. According to the National Bureau of Statistics (NBS), The ICT sector grew by 9.76% in real terms in 2022 compared with 6.55% in 2021. The contribution of the sector to real GDP growth in 2022 was 16.51%, higher than the 15.51% reported in 2021. In Q4 2022, the ICT sector contributed 13.55% to real GDP growth, and was the third highest contributor. The ICT sector has been one of the bright lights in the rather gloomy Nigerian economy. In Q4 2022, the sector contributed 56.27% to the aggregate GDP of the services sector. The telecoms sector is the major sub-sector of the ICT sector, contributing 82.17% to the sector’s output in 2022. Nigeria has the largest mobile population in Africa, and this is expected to continue to grow due to
its large population of young people.

The growth in the ICT sector can be attributed to the increasing number of internet service subscribers, mobile service subscribers, and the growth in broadband penetration. In January, mobile subscriptions grew to 225.88 million. This is 3.66 million more mobile subscriptions than the 222.23 million subscriptions reported in December 2022. Teledensity, the number of active telephones per 100 people living within an area, grew to 118.51 %. These numbers reflect Nigeria’s prominence in the telecommunications sector, owing to the country’s massive population. Nigeria also has one of the highest internet penetrations in Africa at 51%.

Despite the consistent growth in the sector, the sector has had its own fair share of challenges, such as bad network reception, vandalism, rising energy costs, and rising operations costs. Nevertheless, the full roll out of the 5G network is expected to drive continuous growth in the telecoms sector. Also, as telcos begin to diversify, we expect the fintech segment to contribute significantly to the growth of the sector, riding on the implementation of the recent cash withdrawal limits which is expected to boost fintech operations in the near term.. Looking ahead, growth in the sector will be driven by new technologies, increasing smart phone usage, and rising digital consciousness.

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