The industry recorded its lowest real-term growth in five years in the third quarter (Q3) of 2023, growing by 6.69 percent year on year.

Despite being the main driver of the country's economic progress for more than five years, Nigeria's Information and Communication Technology (ICT) Sector is beginning to decline.

According to Cardinal Stone Research experts, the slowdown is due to decreasing capital expenditure or capital expense intensity among key telecommunications operators.

The industry recorded its lowest real-term growth in five years in the third quarter (Q3) of 2023, growing by 6.69 percent year on year.

Mustapha Umaru, Equity Research Analyst (Telecoms), CSL Stockbrokers Limited, attributed the ICT sector's loss to a significant decrease in month-on-month telecom industry data, mostly owing to subscriber purchasing power limits and economic concerns.

"A vital component of Nigeria's ICT landscape, the telecommunications sub-sector has faced challenges in meeting the growing demands of an increasingly connected population. The sector's ability to provide reliable and high-speed internet connectivity has been hampered by issues such as network congestion, frequent service disruptions, and a lack of adequate broadband infrastructure," he said.

In addition to the fall in subscribers caused by a decrease in consumer purchasing power, he stated that the removal of fuel subsidies, increasing inflation, and naira devaluation all had an influence on Nigerians' ability to subsist.

Furthermore, rising inflation, which is currently at an 18-year high, has restricted consumer spending capacity and may have hampered commerce sector progress.

Nigeria's inflation rate increased to 27.33 percent month on month in October 2023, up from 26.72 percent in September 2023, leading food costs to rise and less money spent on data.

According to the latest National Bureau of Statistics GDP report, despite contributing 15.97 percent to GDP in Q3, up from 15.35 percent in the same period in 2022, the data shows that the ICT industry will struggle to maintain its prior development speed.

According to Adeolu Ogunbanjo, President of the National Association of Telecoms Subscribers, it is a clear indication that Nigerians are suffering economically, particularly with regard to how the elimination of subsidies and the unification of the Naira is eroding their disposable income and rising inflation.

"As part of the government's endeavour to solve the difficulties confronting the ICT sector. Plans for a full assessment of existing policies, incentives for private sector engagement, and growth in the ICT industry will be implemented in the coming years," he said.