Nigeria: Investment in Nigeria’s Telecom Sector Reaches $75.6 Billion, Says NCC

The Nigerian Communications Commission (NCC) has announced that foreign direct investment (FDI) and local investment in Nigeria’s telecommunications sector reached $75.6 billion as of 2021.

During an interactive session with stakeholders in the communications media ecosystem in Lagos, Prof. Umar Danbatta, the Executive Vice Chairman of NCC, officially revealed this significant milestone. He highlighted that this achievement has been instrumental in shaping the growth trajectory of the telecoms sector since he assumed the role of chief telecom regulator in August 2015.

Danbatta explained that the investment profile in the sector stood at $68 billion in 2018, which 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, representing the current official investment profile computed in the industry. This signifies a substantial increase from the initial $70 billion investment over the past few years.

The calculation of investment in the telecommunications sector in Nigeria is derived from two sources: the Central Bank of Nigeria (CBN) and the financial data obtained from service providers by the NCC. While the CBN collects and calculates various elements of the telecoms sector, including FDI and portfolio investments, the NCC focuses on domestic investment derived from capital expenditure (CAPEX) reported by telecom licensees.

Danbatta highlighted that the telecom sector’s growth has been made possible by an effective regulatory environment put in place by the NCC. This sector has witnessed remarkable progress, starting from an initial investment profile of $500 million in 2001 when it was fully liberalized.

The telecom sector continues to be a major contributor to Nigeria’s economy, making a significant quarterly sectoral contribution to the nation’s Gross Domestic Product (GDP). Danbatta noted that the sector’s contribution to GDP was approximately 8.5% in the third quarter of 2015. In 2022 alone, it contributed a total of N10.126 trillion to the nation’s GDP.

Citing data from the National Bureau of Statistics (NBS), Danbatta revealed that the telecoms sector’s aggregate quarterly contribution to GDP in 2022 amounted to N10.126 trillion. In the first quarter, the sector contributed 12.94%, equivalent to N2.246 trillion, while the second quarter witnessed an all-time high contribution of 15%, valued at N2.593 trillion. The sector’s contributions in the third and fourth quarters were 12.85% (N2.436 trillion) and 13.55% (N2.851 trillion) respectively.

Danbatta emphasized that the growth trajectory has continued into 2023, with the telecoms and information services sector contributing a significant N2.508 trillion, representing 14.13% in the first quarter.

Since Danbatta assumed office as the Executive Vice Chairman of NCC in August 2015, the telecoms sector’s contribution to national GDP has experienced significant growth. It increased from 8.5% in 2015 to 9.13% in 2016 and 8.66% in 2017. In the last quarter of 2018, it contributed 9.85% to national GDP, and by the fourth quarter of 2019, the contribution reached 10.60%. The second quarter of 2021 witnessed a notable contribution of 14.30%, and in the second quarter of 2022, it peaked at 15%.

Danbatta concluded by stating that the telecom sector has become a major driver of economic development in Nigeria, positively impacting all facets of the Nigerian economy.He expressed the NCC’s commitment to pushing the sector to greater heights and expanding Nigeria’s footprint in the global digital economy.

Danbatta also highlighted the significant progress in broadband penetration, with subscriptions on Third Generation (3G) and Fourth Generation (4G) networks reaching 92.2 million, representing a 48.28% penetration rate.

Furthermore, following the issuance of 3.5GHz spectrum licenses for the deployment of Fifth Generation (5G) networks in Nigeria, 5G subscriptions have surpassed 60,000 in many cities across the country.

In conclusion, the NCC’s announcement underscores the substantial investment in Nigeria’s telecom sector, contributing to its growth and significant contributions to the nation’s GDP. The sector’s continued expansion and advancements in broadband connectivity and 5G deployment further position Nigeria as a key player in the global digital landscape.