COVID-19: Telecoms shines as Nigerian economy heads for recession

Amidst a general downtrend across sectors leading to a dip in the country’s Gross Domestic Product (GDP) by six per cent, the telecommunications sub-sector shone in the second quarter of this year as it grew by 18.1 per cent. This performance led to a 15.09 per cent growth in the real GDP of the Information and Communications Technology (ICT).

Economy experts note that the performance of the telecom was not unexpected as it remained the only active sector when the economy was shut down in the second quarter due to coronavirus (COVID-19) pandemic. Interestingly, it is expected that the growth will be sustained as the telecommunications remains a major driver of the economy even before the pandemic.

According to the National Bureau of Statistics (NBS), the ICT sector contributed 14.06 per cent to total nominal GDP in Q2 2020, higher than the rate of 13.83 per cent recorded in the same quarter of 2019 and also higher than the 10.31 per cent it contributed in the preceding quarter.

Generally, NBS said “GDP decreased by –6.10 per cent (year-on-year) in real terms in the second quarter of 2020, ending the 3-year trend of low but positive real growth rates recorded since the 2016/17 recession.

“When compared with Q2 2019, which recorded a growth of 2.12 per cent, the Q2 2020 growth rate indicates a drop of –8.22 per cent points, and a fall of –7.97 per cent points when compared to the first quarter of 2020 (1.87 per cent).

“Consequently, for the first half of 2020, real GDP declined by –2.18 per cent year on year, compared with 2.11 per cent recorded in the first half of 2019. Quarter on quarter, real GDP decreased by –5.04 per cent. Furthermore, only 13 activities recorded positive real growth compared to 30 in the preceding quarter” the Bureau stated.

Read: https://www.techtrackafrica.com/pantami-nigerian-economy-needs-soft-rebooting/

NBS noted that the decline in the country’s GDP was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.

“The domestic efforts ranged from initial restrictions of human and vehicular movement implemented in only a few states to a nationwide curfew, bans on domestic and international travel, closure of schools and markets, etc., affecting both local and international trade,” it explained.