The information and communications technology sector has almost doubled its contribution to Nigeria’s GDP in the last three years and is expected to be a main driver of economic growth, according to the country’s ICT minister.
“The industry currently contributes 9.58 percent to GDP (Q3 2014) and is further enabling other parts of the economy,” Omobola Johnson said Monday when presenting her ministry’s scorecard on growth since 2011. “The industry is now viewed as critical, ranked with oil and gas and power.”
Three years ago, ICT contributed only 5.46 percent of Nigeria’s GDP. This year the sector is on track to generate about $50 billion of the country’s total GDP.
The Nigerian telecom sector is one of the fastest growing telecom markets in the world and continues to attract significant foreign direct investment, with an estimated additional $6 billion invested between 2011 and 2013, Johnson noted. She attributed the growth of the sector to the judicious application of the principles laid down by her ministry in key policy documents such as the National ICT Policy, National Broadband Strategy and Local Content Guidelines.
The National Broadband Strategy aims for an increase in broadband penetration from 6 percent to 30 percent by 2018.
“We are well positioned to meet our objective of 30 percent coverage by 2018,” Johnson said. “Slowly but surely, Nigeria is becoming a digital economy.”
Nigeria is currently ranked 141 in the United Nations e-Government Development Ranking, up 21 places from its spot in 2012. Through its Local Content Guidelines, Nigeria is looking to foster more participation of Nigerian companies in the ICT industry and stimulate job creation. Additional fiber optic cabling will help, Johnson noted. There was about 238,000 km of cabling deployed by telecom companies in 2014 alone.
When the MainOne cable came online, the cost of international bandwidth dropped from between $1700 and $1200 to between $700 and $500 per Mbp, Johnson said. Now, there is more than 11Tbps of international bandwidth provided by the SAT3, Glo1, MainOne WACS and ACE cables, she said. Now bandwidth cost is between $300 and $400 per Mbps, she added. “ICT is infrastructure. It is the underlying infrastructure for commerce and social services,” Johnson said.
A stable economic environment and a spirit of innovation has enabled the success of leading e-retail outfits such as Jumia and Konga, even though the Internet is in a state of infancy in most parts of Nigeria, Johnson said.
“These companies will not exist if the over 70 million Nigerians do not have access to the Internet and a predictable and stable environment that supports the development of the ICT industry,” Johnson said.
Johnson noted that the e-commerce growth in Nigeria is gradually fueling a rise in the activity for Nipost, the country’s postal service, for the delivery of most items purchased online. The ICT ministry is working with the Central Bank of Nigeria and telcos to bring Nipost “back to life,” she said. Nipost, with more than 3,000 points of sale, can offer cash management and third-party digital payment services, she said.
Investors in the Nigerian ICT sector will get “an opportunity to participate in the fastest growing economy in the world,” Johnson said.
Government efforts to spur the tech sector include the licensing of infrastructure companies, expected to provide efficient wholesale bandwidth services on a non-discriminatory, open access and price-regulated basis, and increased investments in ICT infrastructure through spectrum auctions including those held in the first quarter this year and those expected in the first quarter of 2015.
Other government initiatives include Universal Service Provision Fund subsidies for areas unserved or under-served by telecom services, and the development of legislation such as the Critical Infrastructure Bill, aimed to ensure the protection of infrastructure from damage, and the Cybercrime Bill, presently under parliamentary review, meant to instill confidence in people as they go online.