Nigeria's Telecom Sector Drives GDP Growth with Surging Mobile Subscribers and 5G Revolution

Nigeria's mobile phone subscribers have surged to a whopping 223.8 million individuals as of April 2023. This extraordinary growth has been accompanied by the Telecommunications and ICT sectors making a significant contribution of N2.508 trillion to Nigeria's GDP in Q1 2023, as disclosed by Mr. Reuben Muoka, the Director of Public Affairs at the NCC.

Adding to the intrigue, internet subscribers during the same period reached an impressive 157 million, while broadband subscriptions scaled new heights at 92 million.

Nigeria's Telecommunications and ICT services have emerged as powerful contributors to the country's GDP. According to the NCC, these sectors made a significant impact, contributing N2.508 trillion in Q1 2023, as reported by the NBS. 

They said:

“Telecoms contribution to GDP was calculated from 46 distinct sectors of the economy, which constitute telecoms and information services baskets.”

“The Nigerian telecoms industry has continued to show a positive outlook, which is credited to the innovative and predictable telecoms regulatory environment implemented by the NCC.”

“One of the key highlights of the telecoms industry performance within the period was the generation of 820.8 million dollars for the Federal Government from 5G spectrum licences fees.”

“The fees were paid by three operators, MTN, MAFAB, and Airtel.’’

The rise of 5G services and SpaceX's entry into the Nigerian telecom market

Amidst a flurry of licenses, the Nigerian Communications Commission (NCC) reported notable advancements in the telecom sector. Since their issuance in December 2021, MTN and MAFAB wasted no time and swiftly launched 5G services. Airtel, on the other hand, obtained its license in December 2022 and is gearing up to unveil its own 5G offering in June.

The NCC granted a license to SpaceX, owned by Elon Musk, paving the way for the introduction of Starlinks broadband services. Leveraging satellite-based wireless technology, this broadband service boasts the potential for nationwide coverage. Consequently, Starlinks services are now accessible in various regions of the country.

Surging mobile phone, internet, and broadband subscriptions in Nigeria

Revealing the remarkable growth in the telecoms industry, Mr. Reuben Muoka emphasized its significant contributions to the Nigerian economy. As of April 2023, the number of phone subscribers surged to an impressive 223.6 million. Simultaneously, internet subscribers reached a staggering 157 million, while broadband subscriptions stood tall at 92 million.

Sectorial analysis: Services sector shines while agriculture and industry face challenges in Nigeria's GDP growth

Nigeria witnessed an upward trajectory in its Gross Domestic Product (GDP) during the final quarter of 2022. The real terms GDP experienced a notable increase of 3.52% year-on-year, surpassing the lackluster 2.25% growth recorded in the previous quarter. However, in a comparative analysis with the corresponding period of 2021, this growth fell short of the impressive 3.98% figure.

The National Bureau of Statistics (NBS) shed light on the driving force behind this captivating performance, attributing it primarily to the services sector. This sector showcased remarkable growth of 5.69%, making a substantial contribution of 56.27% to the overall GDP.

Despite modest growth of 2.05% in the agriculture sector during the reference period, its progress was hindered significantly by severe floods experienced across the country. As a result, its growth paled in comparison to the vibrant performance seen in the fourth quarter of 2021, which had achieved a commendable 3.58% growth.

Meanwhile, the industry sector faced its fair share of challenges, recording a discouraging growth rate of -0.94%. This lackluster performance translated into a diminished contribution to the aggregate GDP, relative to both the third quarter of 2022 and the fourth quarter of 2021. Essentially, the agricultural and industrial sectors experienced a decline in performance in 2022 compared to the preceding year, while the services sector showcased an improvement.