The investment portfolio in Nigeria’s telecommunications sector remains $75.6 billion, according to Umar Danbatta, the Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC).
The investment portfolio consist of foreign direct investment (FDI) and local ones. This is contained in a statement revealed by NCC and signed by its Director of Public Affairs, Reuben Mouka.
However, the statement revealed that Mr Danbatta, a professor, on Wednesday, presented his scorecards since assuming office in 2015 at an interactive session with media managers and executives in Lagos.
The developments in the telecommunications sector have had a significant impact on both the country’s revenue growth and the socio-economic development of the people.
In 2018, the investment profile in the sector was $68 billion. This increased to $70.5 billion in 2019 and $72 billion in 2020. By the end of 2021, the figure had risen to $75.6 billion. This represents a significant increase from the initial $70 billion investment in the last few years.
The investment in the telecommunications sector in Nigeria is calculated by both the Central Bank of Nigeria (CBN) and service providers. The CBN collects data on foreign direct investment (FDI), portfolio investment, and other elements of the telecoms sector, while the Commission collects data on domestic investment arising from capital expenditure (CAPEX) from telecom licensees. These data are then combined to form the total investment in the industry.
The telecommunications sector has grown tremendously since it was fully liberalized in 2001, when the initial investment profile was only $500 million. This growth is due in part to the effective regulatory environment created by the Nigerian Communications Commission (NCC).
The head of the Nigerian Communications Commission (NCC) highlighted the sector’s significant contribution to the country’s economy, citing its “impressive” quarterly contribution to the nation’s gross domestic product (GDP). The sector’s contribution to GDP increased from 8.5% in the third quarter of 2015 to N10.126 trillion in 2022 alone. According to data from the National Bureau of Statistics (NBS), the telecoms sector contributed N10.126 trillion to GDP in aggregate in 2022.
The telecommunications sector has been a major contributor to Nigeria’s GDP in recent years. In the first quarter of 2023, the sector contributed N2.508 trillion, that is 14.13%, to the nation’s GDP. This represents a significant increase from the sector’s contribution in the first quarter of 2022, which was 12.94%. The sector’s contribution to GDP has been steadily increasing over the past few years, reaching an all-time high of 15% in the second quarter of 2022.
NCC also noted that the sector’s share of Nigeria’s GDP has increased over time, from 8.5% in 2015 to 15% in 2022. In the fourth quarter of 2018, the sector contributed 9.85% to GDP, and this rose to 10.6% in the fourth quarter of 2019. In the second quarter of 2020, the sector contributed 14.3% to GDP, and this increased to 14.42% in the second quarter of 2021. The highest quarterly contribution to GDP by the sector was 15% in the second quarter of 2022.
The regulator stated that the telecommunications sector has become a major driver of economic growth in Nigeria, and that it continues to have a positive impact on all aspects of the country’s economy.
Meanwhile, according to Mr Danbatta, As of May 2023, there were 221.3 million active voice subscriptions in Nigeria, equivalent to 115.91% teledensity. Internet subscriptions also rose to 159.6 million, and broadband subscriptions on 3G and 4G networks increased to 92.2 million, representing a 48.28% broadband penetration in the country.
Also, after the issuance of 5G spectrum licenses in Nigeria, the number of 5G subscriptions has grown to over 60,000 in many cities in at least 12 states. 5G is characterized by ultra-high-speed internet, low latency, and high capacity.