The Executive Vice President (EVC) of the Nigerian Communications Commission (NCC), Mr. Umar Garba Danbatta, has officially announced that the investment profile in the country’s telecommunication sector, which comprises of foreign direct investment (FDI) and local investment, has reached USD 75.6 billion as of 2021.
According to a statement issued by Mr. Reuben Muoka, Director of Public Affairs at the NCC, Danbatta, a professor of electrical and electronic engineering, revealed this at an interactive session with stakeholders in the media ecosystem, in Lagos on Wednesday, where he provided his dashboards and historical developments that have shaped the growth trajectory in the telecom sector since he became the top telecom regulator in August 2015. The NCC chief also revealed that the The telecommunications sector contributed N10.126 billion to the Gross Domestic Product (GDP) of the nation. in 2022.
Danbatta claimed that 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 $75,560,563,417.79 ($75.6 billion). The most recent figure is the current official investment profile calculated in the industry from the initial investment of $70 billion in recent years.
Investment in the telecommunication sector in Nigeria is calculated from two sources: the Central Bank of Nigeria (CBN) and financial data obtained from service providers by the Commission.
While the CBN collects and calculates an element of the telecom sector to include FDI, portfolio and others, the Commission collects investment figures from telecom licensees described as domestic investment derived from capital expenditures (CAPEX) that are part of the investment overall in the industry.
The NCC CEO said that through the effective regulatory environment established by the Commission, the telecommunications sector has seen tremendous growth from an initial investment profile of $500 million in 2001, when the sector was fully liberalized.
Similarly, Danbatta said that the telecommunication sector has remained a major contributor to the Nigerian economy through an impressive sectoral contribution to the nation’s Gross Domestic Product (GDP) on a quarterly basis, an increase of around 8.5 percent in the third quarter of 2015, contributing N10.126 trillion to the nation’s GDP in 2022 alone.
Citing data from the National Statistics Office (NBS), Danbatta said that the telecommunication sector contributed N10.126 trillion as aggregate quarterly contribution to the nation’s GDP in 2022.
“In the first quarter, the sector contributed 12.94% equivalent to N2.246 trillion, while the second quarter witnessed a GDP contribution from the telecommunication sector to the nation’s economy, the highest ever. times, standing at 15% and valued at N2,593. trillions. The sector’s contribution to GDP in the third quarter was 12.85 percent and in the fourth quarter it grew to 13.55 percent, which are valued at N2.436 billion and N2.851 billion respectively.
“The growth trajectory continued this year as the telecommunication and information services sector in Nigeria delivered an attractive 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 Danbatta’s inauguration as NCC’s EVC in August 2015, according to available data from NBS.
From 8.50% in 2015, it grew to 9.13% in 2016 and 8.66% in 2017. In the last quarter of 2018, telecommunications contributed 9.85% to the national GDP, while adding 10 .60% in the fourth quarter of 2019. .
Also in the second quarter of 2010 it added 14.30 percent to the GDP; 14.42 percent in the second quarter of 2021. The sector’s highest quarterly GDP contribution to the economy was 15 percent in the second quarter of 2022, Danbatta said.
Overall, Danbatta said the sector has become a major enabler of economic development in Nigeria as it continues to positively impact all facets of the Nigerian economy. “As the regulatory authority for the telecom sector in Nigeria, we are pleased that the industry has recorded phenomenal growth statistics in the past two decades of the liberalization of the telecom sector. However, we will not rest on our oars. We will continue to push up to greater heights by encouraging border expansion to put Nigeria’s footprint on the global map of the digital economy,” he said.
In addition to investment growth and contribution to GDP, Danbatta said: “As of May 2023, active voice subscriptions reached 221.3 million, which is equivalent to 115.91% of teledensity, while Internet subscriptions increased to 159.6 million.
According to the CEO of NCC, broadband subscriptions in Third Generation (3G) and Fourth Generation (4G) networks increased to 92.2 million, representing a broadband penetration of 48.28% in the country.
Furthermore, following the issuance of 3.5 GHz spectrum licenses for the deployment of fifth generation (5G) networks in Nigeria, marked by ultra-high-speed, low-latency, high-capacity internet, and the subsequent commercial launch by two of the three license holders, 5G subscriptions have grown to more than 60,000 in many cities in at least 12 states of the Federation.
Danbatta assured the Commission’s commitment to always give concrete expression to Federal Government Executive Order 001 focused on Ease of Doing Business and other policies geared towards the digital economy, by undertaking various regulatory initiatives that support a friendly investment climate for investors in Nigeria and improve value for money for telecom consumers.
The EVC particularly praised the media as a strategic partner and enabler of growth in the telecommunications sector “through accurate, adequate and timely reporting of all the Commission’s regulatory activities”.