Telecoms remain dominant player in ICT sector as Nigeria’s GDP gains

Within the ICT sector, telecommunications, led by major mobile network operators such as MTN, Airtel, Globacom, and 9mobile, continues to play a dominant role, contributing significantly to Nigeria’s economic activities.

The telecom industry was the third-largest contributor to Nigeria’s GDP in the third quarter of 2024, following crop production (26.51 per cent) and trade (14.78 per cent).

It would be recalled that in the data released by the National Bureau of Statistics (NBS) recently, Nigeria’s Information and Communications Technology (ICT) sector contributed 16.35 per cent to the country’s real Gross Domestic Product (GDP) in the third quarter of 2024, marking a notable decline from the 19.78 per cent contribution recorded in the previous quarter.

However, this figure still represents an improvement from 15.97 per cent in the same period of 2023, according to the latest GDP statistics from the National Bureau of Statistics (NBS).

The ICT sector encompasses four primary subsectors: Telecommunications and Information Services, Publishing, Motion Picture, Sound Recording, and Music Production, and Broadcasting.

In the third quarter, the sector recorded a growth rate of 5.92 per cent year-on-year in real terms.

READ ALSO: MTN CEO calls for strategic collaborations as Telecoms propel 14% of Nigeria’s GDP

A significant driver of this growth was the telecommunications sub-sector, which alone contributed 13.94 per cent to the GDP in real terms.

According to industry analysts, the decline in ICT sector growth could be attributed to several factors, including regulatory changes, increased operational costs, and global economic uncertainties that may have impacted consumer spending on telecom services.

Nonetheless, the sector remains a crucial driver of Nigeria’s digital transformation and economic diversification, particularly as telecom services support growth in sectors like finance, healthcare, and education.

“The telecom industry continues to show resilience despite challenges,” said Tunde Adebiyi, a telecommunications analyst at a Nigerian research firm.

“While the sector’s contribution to GDP has slightly declined, it remains a backbone for other sectors, particularly as the country pushes towards greater digital inclusion and technological adoption.”

Despite the slowdown in ICT growth, Nigeria’s overall GDP in the third quarter of 2024 grew by 3.46 per cent year-on-year, surpassing the 2.54 per cent growth recorded in the third quarter of 2023 and improving from the 3.19 per cent growth in the second quarter of 2024.

Economic experts note that while the agricultural and industrial sectors showed positive growth, their contributions were not as robust as those of services.

The Agriculture sector grew by 1.14 per cent, slightly below the 1.30 per cent recorded in the third quarter of 2023, while the Industry sector saw a 2.18 per cent growth, a notable improvement from the previous year’s 0.46 per cent.

Despite the decline in ICT’s contribution to both real and nominal GDP, experts remain optimistic about the long-term prospects of the sector, particularly as Nigeria continues to push for greater technological innovation and integration into the global digital economy.