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Investments in Nigeria’s telecom industry hit $75.6 billion

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L-R: Mustapha Isa, Former President, Nigerian Guild of Editors (NGE); Ochereome Nnanna, Chairman, Editorial Board, Vanguard Newspapers; Prof. Umar Danbatta, Executive Vice Chairman/Chief Executive Officer, Nigerian Communications Commission (NCC); Sam Omatseye, Chairman, Editorial Board, The Nation Newspapers and Usman Malah, Director, Human Capital and Administration, NCC at a media roundtable organised by the Commission in Lagos on Wednesday (July 5, 2023).

The Nigerian Communications Commission (NCC) has said that investments in the country’s telecom industry comprising foreign direct investment (FDI) and local investment, has reached $75.6 billion as of 2021.

The Executive Vice Chairman (EVC) of the Commission, Prof. Umar Danbatta, disclosed this at an interactive session with the media in Lagos on Wednesday where he provided his scorecards and landmark developments that have shaped the trajectory of growth in the telecoms sector since he became the chief telecom regulator in August 2015. According to Danbatta, in 2018, the investment profile in the sector stood at $68 billion.

He added that this increased to $70.5 billion in 2019 and $72 billion in 2020. At the end of 2021, the figure rose to $75.6 billion. The latest figure is the current official investment profile computed in the industry up from the initial $70 billion investment in the last few years.

Data sources

According to the Commission, Investments in the telecommunications sector in Nigeria is computed from two sources: the Central Bank of Nigeria (CBN), and the financial data obtained from service providers by the Commission.

While the CBN collects and calculates an element of the telecoms sector to include FDI, portfolio, and others, the Commission collects investment figures from telecom licensees described as domestic investment arising from capital expenditure (CAPEX) which form part of the total investment in the industry. The NCC CEO said through the effective regulatory environment put in place by the Commission, the telecom sector has recorded tremendous growth from an initial investment profile of $500 million as of 2001, when the sector was fully liberalized.

Contributions to GDP

Similarly, Danbatta said the telecom sector has continued to be a major contributor to Nigeria’s economy through an impressive sectoral contribution to the nation’s Gross Domestic Product (GDP) quarterly, up from about 8.5% in the third quarter of 2015, contributing N10.126 trillion to the nation’s GDP in 2022 alone. Citing data from the National Bureau of Statistics (NBS), Danbatta said the telecoms sector contributed N10.126 trillion as an aggregate quarterly contribution to 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,” he said.

Telecom’s contribution to national GDP has grown significantly since 2015, according to available data from NBS. From 8.50% in 2015, it grew to 9.13% in 2016 and to 8.66%in 2017. In the last quarter of 2018, telecoms contributed 9.85% to the national GDP while it added 10.60%in the fourth quarter of 2019.

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.

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