Nigeria: Telecom Sector Contributes 16.06% to Nigeria’s Q2 2023 GDP, Reports NBS

The telecommunications and information services (telecoms) sector has emerged as the third-highest contributor to Nigeria’s GDP in the second quarter of 2023. This significant finding is one of the highlights from the Nigerian Gross Domestic Product Report, a project commissioned by the Nigerian Bureau of Statistics (NBS).

The report indicates that the telecom services sector contributed to the nation’s GDP growth with a substantial 16.06%. The leading positions were held by crop production (20.66%) and trade (16.80%). Despite facing economic challenges, Nigeria’s GDP expanded by 2.51% in Q2 2023, with a nominal GDP value of N52.10 trillion. The real GDP value reached N17.72 trillion by the end of the quarter.

Beyond its noteworthy contribution to GDP, the telecoms sector played a pivotal role in the remarkable performance of the Information and Communications (ICT) sector, contributing 19.54% to the country’s overall GDP.

It’s important to note that the ICT sector comprises four key activities: Telecommunications and Information Services; Publishing; Motion Picture, Sound Recording, and Music Production; and Broadcasting. The NBS report reveals that the ICT sector achieved a 41.67% growth in nominal terms, marking a 27.56% increase compared to Q2 2022. In real terms, the ICT segment demonstrated a growth of 11.6%.

Substantial Decline in Nigerians Without Telecom Services In a positive development, the number of Nigerians without access to telecom services has decreased by 27% over the past decade.

Telecoms Sector’s Resilience

Despite the ongoing economic challenges, Nigeria’s telecoms sector has displayed resilience. A study by the Nigerian Communications Commission indicated a 9% increase in the volume of internet subscribers in 2022.

As of June 2023, MTN led with 84,663,653 subscribers, followed by Globacom (27.91%), Airtel (27.39%), and 9mobile (6.28%). However, the sector also encountered certain setbacks.

The volume of internet subscribers decreased from 159,598,451 in May 2023 to 159,498,836 in June 2023. Additionally, broadband penetration dropped to 47.01% in June 2023, down from 48.28% in May 2023.

Recent Hints at Rate Hikes

Last week, telecoms operators indicated the possibility of increasing rates for data, calls, and SMS. Citing elevated diesel costs and regulatory interventions, these telcos proposed a review of the existing price structure. The potential impact of such a rate hike on the sector’s contributions to the national GDP remains uncertain and could be a subject of future study.