Background

The ICT is currently the 4th largest sector of the Nigerian economy, and its fastest growing sector. It is contributing 10.26% of the GDP, and growing at a 24% rate. By the second quarter of 2014, the Nigerian ICT industry alone provided both direct and indirect employment to over 3million people in the country. Indigenous ICT companies have to contend with non-specialized and fragmented value chains, national infrastructural deficits among others. Consequently, software imports is high, with estimation at US$1bn annually.

Past Reform and Achievements

Government began reforming the ICT industry in 1999, informed by the high inefficiency of the telecommunications sector that the Nigerian Telecommunications Ltd’s (NITEL) monopoly created. A telecom policy document that clearly articulated the intentions of government for the sector and the roles of the various stakeholders, the National Telecom Policy (NTP), was released in 2000; and a new board appointed and inaugurated for the Nigerian Communications Commission (NCC) to coincide with a new GSM licensing process in 2001.

By 2009, 20 firms were licensed to provide a range of telephone and Internet services using Global System for Mobile Communications (GSM), Code Division Multiple Access (CDMA), and fixed wired/wireless technologies. Total teledensity recorded in Nigeria has improved significantly —moving from 0.04 per 100 inhabitants in 1999, to 1.89 in 2002 after full liberalisation of the telecoms sector, to 42.13 in 2008, 87.06 in 2013, and 93.41 lines per 100 inhabitants in 2014. Access to the internet is also rising, with 41.5% of Nigerians having access at the end of 2013, compared to 34% end of 2012.

Government revenue accruing from the sector has increased; with annual taxes paid by telecom operators estimated to be about N160billion, where about N 55billion are paid in regulatory levies. Foreign direct investment in the sector is also growing, with $32 Billion already attracted by August 2014.

Challenges and Next Steps

The rollout of the terrestrial fiber-optic network, which had only 11,000 km laid in 2010, should be fastened. Software development should be enhanced with loans to indigenous ICT companies and government investments in computer science and engineering departments in the tertiary institutions. The theft and vandalisation of telecommunication infrastructure should be checked. Regulation of telecoms operators by NCC should be improved, to ensure quality telecoms and internet services for Nigerians.