Telecoms Investment in Nigeria Hits $75.6bn - Umar Garba Danbatta

Mr Umar Garba Danbatta, Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), made an official statement that the investment profile in the nation's telecom sector, which comprises both foreign direct investment (FDI) and domestic investment, has reached $75.6 billion as of 2021.

Danbatta, who is a professor of electrical and electronic engineering, disclosed this at a conference with stakeholders in the communications media sector, in Lagos on Wednesday, where he provided his evaluations and landmark developments that have shaped the direction of expansion in the telecoms sector since he became the chief telecom regulator in August 2015. 

The NCC chairman also said that the telecommunications industry generated a total of N10.126 trillion which improved the nation's GDP in 2022.

According to Danbatta, the sector's investment profile was $68 billion in 2018—he also added that it rose to $70.5 billion in 2019 and $72 billion in 2020. The amount in total was $75,560,563,417.79 ($75.6 billion) by the end of 2021. 

The most recent statistics are the industry's current official investment profile, which has increased from the original $70 billion investment in recent years.

The Central Bank of Nigeria (CBN) and financial data acquired by the Commission from service providers are the two sources used in calculating the investment in Nigeria's telecommunications industry 

CBN works in collecting and calculating FDI, portfolio, and other elements of the telecoms sector—the Commission gathers investment figures from telecom licensees described as domestic investment arising from capital expenditure (CAPEX), which forms part of the industry's total investment.

The NCC CEO said that thanks to the Commission's strong regulatory framework, the telecom industry has grown tremendously from a $500 million investment profile in 2001 when the sector was completely liberalized.

Similarly, Danbatta stated that the telecom sector has continued to be a major contributor to the Nigerian economy, with an impressive quarterly sectoral contribution to the nation's Gross Domestic Product (GDP), up from about 8.5% in Q3 2015, contributing N10.126 trillion to the nation's GDP in 2022 alone.

Danbatta used statistics from the National Bureau of Statistics (NBS) to claim that the telecommunications industry contributed N10.126 trillion to the nation's GDP in 2022.

“In the first quarter, the sector contributed 12.94% 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% and valued at N2.593 trillion. The sector’s contribution to GDP in the third was 12.85% and in the fourth quarter, it grew to 13.55%, which is valued at N2.436 trillion and N2.851 trillion respectively.

“The growth trajectory continued this year as the 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% in the first quarter of 2023.

"Also in the second quarter of 2010, it added 14.30% to GDP; 14.42% in the second quarter of 2021. The highest quarterly contribution to GDP by the sector to the economy was 15% in the second quarter of 2022, Danbatta 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 to 115.91% teledensity, while Internet subscriptions rose to 159.6 million.

According to NBS statistics, Danbatta's contribution to national GDP has increased dramatically following his appointment as EVC of NCC in August 2015.

Danbatta went on to say that the NCC will continue to push forward to higher heights by supporting frontier growth in order to position Nigeria on the world map of digital economy.