President Bola Ahmed Tinubu.

Proactive investment in the telecoms has yielded an estimated $22 billion (33trn) contribution to Nigeria's GDP.

In recent years, Nigeria has witnessed massive growth in digitalisation and the impact of mobile connectivity on the West African country’s society and economy cannot be overstated, with the mobile industry accounting for 13.5% of its total GDP last year.

It is against this background of visible economic success that the Government through the Strategic Blueprint of the Federal Ministry of Communications, Innovation, and Digital Economy has identified digitalisation as a key enabler to stabilise and strengthen the macroeconomic environment.

According to GSMA, the surge in digitalisation, driven by robust mobile network infrastructure and innovative policies, has ushered in a new era of possibilities that unlock economic diversification away from the reliance on the oil and extractives sector.

Angela Wamola, head of Sub-Saharan Africa at the GSMA, said: “High-speed connectivity is the bedrock of any digital nation, and the Nigerian government recognises the mobile industry’s role in laying key foundations on which digital transformation is built. 

"Future policies should be geared towards reducing the cost and complexity of infrastructure rollout to encourage investment and boost the adoption of mobile broadband. The impact of such actions would go far beyond mobile, driving productivity gains across the economy and creating millions of new jobs in Nigeria.”

She underlined that the shift towards diversification underscores the digital sector’s significant role in steering Nigeria towards a more resilient and dynamic economic future. The West African country is pursuing structural reforms, creating an environment conducive to private and public sector growth and job creation.

This shift towards diversification underscores the digital sector’s significant role in steering Nigeria towards a more resilient and dynamic economic future.

The largest contribution of the digital sector to Nigeria’s overall GDP is through the impact digitalisation has on the productivity of other sectors. 

Some of the quick wins include the impact digitalization has had on cash transfers to citizens. It can now be done more quickly and efficiently using mobile money payment platforms.

The Head of Sub-Saharan Africa at the GSMA said Digital technologies also boost productivity in the agricultural sector through increased use of agricultural inputs, better storage facilities and more coordinated support across agencies with the use of digital technologies to communicate and support small-scale farmers.

 Considering the direct and indirect contribution of the mobile ecosystem, as well as the productivity impact throughout the economy, the telecom sector’s contribution to Nigeria’s overall economic activity is much greater, with 2.4 trillion NGN in tax revenue contributions to the fiscus. 

Digitalisation, however, still faces some challenges despite its early impact and economic success. The GSMA has published its latest report ‘The role of mobile technology in driving the digital economy in Nigeria’ which addresses the challenges hindering the growth and development of the telecommunications industry and the crucial role of the mobile sector in Nigeria’s economic development.

It highlights that connectivity to mobile services, including Mobile Money is the foundation on which digitalisation is built. Mobile Network Operators (MNOs) such as MTN are committed to investing to support the realisation of the digitalisation ambitions that will unlock economic growth and development in Nigeria.

To unlock these economic opportunities, connectivity and mobile financial services are crucial foundations. The GSMA’s report emphasises that while 29% of Nigerians are regularly using mobile internet, there remains untapped potential, as 71% are not accessing these services on a regular basis.

“An improved policy environment has the potential to help the industry boost coverage and adoption, resulting in 15 million additional internet users by 2028,” says the GSMA report.

The sector has the uphill task of finding innovative ways of navigating challenges such as infrastructure deployment, the complex and costly process of securing Rights of Way and the complex tax environment in Nigeria, among others.

An enabling policy and regulatory framework will be key to realising the full potential of Nigeria’s digital transformation, as recognised in Nigeria’s Strategic Plan 2023 – 2027 as well as the Federal Ministry’s National Broadband Alliance for Nigeria (NBAN).

“It is clear that the mobile industry is a key partner for the government in achieving its objectives and can contribute to some of the key elements of the government’s plan. The value of this contribution can significantly increase with the necessary support from government required to overcome the mentioned obstacles outlined abo that hinder transforming Nigeria to a digital economy,” the GSMA report further advises.

To this end, the GSMA report recommends initiatives to support policymakers in creating an economic and regulatory environment that supports growth, investment, and competition.

“These include implementing a legal framework for Critical National Infrastructure to address challenges in building network infrastructure; simplifying and improving the process for issuing RoW and standardising it across the country; reducing the industry’s tax burden to help cut operating costs; and creating a regulatory environment that supports sustainable investment,” says the Report.