The Chief Executive Officer of Open Access Data Centre, Dr. Ayotunde Coker, has revealed that Information and Communication Technology (ICT) powers nearly 90% of Nigeria’s Gross Domestic Product (GDP), despite the sector officially contributing around 20% to the country’s GDP in Q2 2023.
Speaking at the Nairametrics Industry Spotlight webinar themed “Beyond Connectivity: Telcos and the Future of Financial Inclusion in Nigeria,” Dr. Coker emphasized the widespread impact of ICT across multiple industries.
He noted that although the ICT sector’s direct contribution was recorded at 19.78% in the second quarter of this year, its influence permeates virtually all sectors of the economy, making it a critical driver of productivity and growth.
ICT’s impact beyond telecoms
Dr. Coker stressed that the role of ICT extends far beyond just telecoms, impacting industries in ways that are often not fully captured by traditional GDP measurements.
“We must look at the impact beyond just telecoms and focus on the broad digital infrastructure because you can’t have telecoms without data centers; you can’t have the endpoint mobile communications or voice and data without the supporting infrastructure of towers and so on.
“There are a lot of back-end things that make the endpoint work,” he said.
He explained that various sectors, including oil and gas, finance, and others, rely heavily on ICT infrastructure to function efficiently.
“The oil industry, for instance, relies on connectivity for its exploratory capabilities, a key aspect of its operations. Without ICT, much of what happens in these industries would not be possible,” he stated.
- He went on to describe how financial services have increasingly become technology-driven, with banks essentially operating as tech companies that handle finance.
- The rise of fintech has further highlighted the importance of ICT, as it has layered digital solutions onto traditional financial services.
- “A bank today is essentially a technology company that happens to deal with finance,” Dr. Coker added, underlining how technological infrastructure forms the backbone of many industries.
“Based on these realities, I can draw that into anecdotal evidence that technology affects at least 90% of what we do in our GDP, even though it’s just 20% of GDP,” he said.
Broadband penetration and GDP growth
Dr. Coker also touched on the importance of broadband penetration in driving economic growth. He noted that Nigeria’s general broadband penetration currently hovers around 45-47%, but efforts by the government and industry stakeholders could push this figure beyond 50% soon.
However, he emphasized the need to focus on “meaningful broadband,” a term that refers to the quality and adoption of broadband services, rather than just access.
“Broadband alone is not enough. What really matters is broadband adoption at the endpoint. For it to drive economic growth, people need to use it meaningfully.
“We know that a 10% increase in broadband penetration leads to about 2.5% growth in GDP, so expanding access and adoption is crucial for economic transformation,” he said.
What you should know
Data recently released by the National Bureau of Statistics indicated that activities in the ICT sector contributed 19.78% to Nigeria’s real GDP in Q2 2024.
- This showed a marginal increase in contribution when compared to the 19.54% recorded in the same period last year.
- Quarter on quarter, the sector also recorded an increase in contribution when compared with the preceding quarter. The NBS data showed that ICT contributed 17.89% to the real GDP in Q1 2024.
- According to NBS, the ICT sector comprises the four activities of Telecommunications and Information Services; Publishing; Motion Picture, Sound Recording, and Music Production; and Broadcasting.
- The ICT sector in the quarter recorded a growth rate of 4.44% year-on-year. This was driven largely by activities in the telecommunications sub-sector, which contributed 16.36% to the GDP in the real term.
