Recession: Why ICT Is Path To Nigeria’s Economy Recovery

(Last Updated On: 2017-05-05)

Nahimah Ajikanle Nurudeen

Nigeria retained its rating as the fastest growing Information and Communications Technology (ICT) market in Africa and amongst the fastest growing in the World even in the face of recession. The sector has been described as the path to current economic recovery because of its contribution to the economy and future potentials.

Telecoms market brings to the economy excess of $68B investment in local and Foreign Direct Investment (FDI) in the past 16 years.Currently there are over 153million lines in Nigeria with a tele-density of over 109%. Connected data service subscribers including mobile internet is over 93 million as at August, 2016.

Nigeria now recognize that the nation is in the next phase of the Telecoms revolution that would be driven by young talent through innovation in Information and Communications Technology (ICT) under robust Broadband access with attainment of the 30% access 2018. It is safe to say that Nigeria can meet the 30 per cent Broadband penetration target. This optimism is corroborated by the latest report of the ITU/UNESCO Broadband Commission For Sustainable Development which credits Nigeria with 20.95 per cent broadband penetration as at August, 2016. And optimistic future beacons on Nigeria.

It is indisputably that virtually other sectors of the Nigerian economy today run effectively on ICT. For instance, the robust banking sector is riding on the success of available quality telecoms network as many Automated Teller Machines, (ATM) are connected to telcos service providers infrastructure as well as increasing in the number of PoS machines. Also, Education, health, Agriculture and a host of others.

Today, MTN delivers Small and Medium Enterprises ( SMEs) solutions that have enhanced efficiency and productivity of small businesses. Some of these SMEs have also moved from small business big businesses with increased capacity.

Apart from connecting banks to customers, MTN with over 40per cent subscribers of the total 140million telecoms services users in Nigeria, also offer specific products on insurance and other value proposition services to add value to life as well as unlocking the ICT potentials for social economic development.

Future and ICT

Nigeria has been projected to occupy the 13th position as one of the leading G20 economies in the World by 2050, according to a forecast by PricewaterhouseCoopers. The report, which was released yesterday by the accounting firm, disclosed that Nigeria and Vietnam would move into the top 20 leading economies by 2050 at 13th and 19th place respectively.

“Nigeria could be the fastest growing country in our sample due to its youthful and growing working population, but this does rely on using its oil wealth to develop a broader based economy with better infrastructure and institutions as regards rule of law and political governance and hence support long term productivity growth – the potential is there, but it remains to be realised in practice”.

According to the report, ‘’Nigeria could be the fastest growing country in our sample due to its youthful and growing working population, but this does rely on using its oil wealth to develop a broader based economy with better infrastructure and institutions as regards rule of law and political governance and hence support long term productivity growth – the potentials is there, but it remains to be realised in practice’’. But global oil price has impacted on the economy.

ICT’s Contribution to GDP

As at September, Nigeria Gross Domestic Product (GDP) expanded 8.99% over the previous quarter. GDP growth rate in Nigeria averaged 0.77 per cent from 2013 until 2016, reaching an all time high of 9.19 per cent in the third quarter of 2015 and a record low of -13.70 per cent in the first quarter of 2016.

Furthermore, recent statistics, the GDP in Nigeria shrank 2.24 per cent year-on-year in the third quarter of 2016, following a 2.06 per cent decline in the previous period and compared to market expectations of a 2.58 per cent decline. Lower oil prices continued to hurt the oil sector which slumped for the fourth straight quarter while the non-oil sector was flat after shrinking in the previous two periods.

Economic Recovery and Growth Plan

Nigerian Economic Recovery and Growth Plan (ERGP) will be driven by Science, Technology and Innovation, with the youths being targeted to deliver the Plan success.

The Minister of Budget and National Planning Minister, Senator Udoma Udo Udoma said Government is working strategically to address the economic challenges of the country with appropriate attention focused on young people, who are the source of the country’s economic strength.

He said the ERGP, the country’s medium term plan, is tailored in such a way that it will be driven largely by ideas and innovation, areas where the young people have comparative advantage, particularly in high-tech perspectives that will urgently transform the economy.

The Plan envisages that by 2020, Nigeria would have made significant progress towards achieving structural economic change with a more diversified and inclusive economy.

This, he added, will heavily depend on young people who apart from their bubbling energy and fresh ideas, are also more technology savvy.

Experts Views on ICT as Path to Nigeria’s Economic Recovery

Nigeria Young population are ready market are more than enough incentives to attract investors Africa’s biggest ICT hub.

The Chairman, Zinox Group, Leo Stan Ekeh told CNN Tech that with right investment, government support , and enabling environment, Nigeria can effort produce global billionaires from ICT sector.

In another occasion, he said knowledge democracy and advancements in Information and Communication Technology (ICT) has put access to wealth and many possibilities in the hands of every youth.

According to him, a multitude of opportunities is aid exist for the current generation to create and sustain new wealth in the 21st Century as knowledge is free for everyone.

Ekeh is optimistic that the youth are more strategically positioned to out-strip the achievements of the older generation by creating new wealth. There are many opportunities for many of you in this generation to create new wealth.

Minister of Communications Technology, Mr Adebayo Shittu, also identified ICT as the fastest growing sector of the Nigerian economy.

He said the sector has the potential of generating more employment and wealth creation which various stakeholders in the sector can tap into.

He also pointed out that the ICT sector can be re-engineered to expand the frontiers of its contribution towards facilitating Nigeria’s early exit from recessions economies.

In his opinion, the former President of the Association of Telecommunications Companies of Nigeria ( ATCON) , Engr. Lanre Ajayi said while there is no doubt that the telecoms sector is also facing serious setbacks in the current economic downturn, ICT remains the best alternative to growing the Nigerian economy.

He noted that recent statistics shown that the telecoms sector is not performing the way it should but, the industry drivers need to be more proactive in sustaining the growth of ICT in Nigeria.

This he said is important because of the multiple effects on other sectors of the economy.

Also, the current ATCON President, Olusola Teniola called for shareholders engagement in addressing the industry problems.

According to him, ICT is an enabler of social development and this is why, ATCON continues to frowning against introduction of further taxes in the sector.

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