5G and Nigeria Digital Economy

In this piece, BUKOLA OLANREWAJU reviews steps taken by FG for the deployment of the Fifth Generation (5G) network for Nigeria’s digital economy growth.

As the digital economy is globally expanding at a very fast pace and has transitioned from being a luxury to an absolute necessity, 5G has been positioned as a key catalyst to fuel its growth and increase the nation’s capacity to compete with developed economies of the world.

While evolving into a new driver powering economic growth, the digital economy has helped many countries deepen international cooperation in more fields. Taking a center stage, it has opened up new possibilities for international cooperation as it is becoming ubiquitous in modern life.

Information and Communications Technology (ICT) experts believe that 5G, being a major driver of the global wireless technology market will generate new growth avenues in the Internet of Things (IoT), Artificial Intelligence (AI), and other business models.

5G is the newest generation of technology, which will bring about transformation in the country in the area of smart city, smart transportation, efficiency in medicine, a lot of automation, and 5G will control a lot of appliances and devices with respect to the Internet of Things (IoT).

The World Economic Forum noted that across the digital economy, 5G networks will be as important for enterprises as 4G was indispensable for smartphone users. By 2030, two-thirds of the global workforce will use the 5G platform.

“We estimate that industry digitalization will generate an estimated $US700 billion addressable market opportunity for service providers by 2030. And that is only 47% of the total 5G-enabled value.

“With countries all over the world already deploying 5G services, this is an important window for alignment.”

Also, PricewaterhouseCoopers (PWC) report highlighted that the positive impact of the Fourth Industrial Revolution and its related emerging technologies will be fully realized through the wide-scale deployment of 5G communication networks in combination with other connectivity solutions.

The key functional drivers of 5G will unlock a broad range of opportunities, including the optimization of service delivery, decision-making, and end-user experience. This will result in $13.2 trillion in global economic value by 2035, generating 22.3 million jobs in the 5G global value chain alone.

“Telecom companies around the world are poised to invest tens of billions of dollars in 5G. A report by research house IDC projects that mobile service providers will collectively spend nearly US$57 billion on the rollout of 5G through 2022”, the report stated.

Reacting to this, World Bank noted that Africa has the opportunity to harness the digital economy as a driver of growth and innovation, but if it fails to bridge the digital divide its economies risk isolation and stagnation.

In addition, Deloitte stated that the backbone of the digital economy is hyperconnectivity which means the growing interconnectedness of people, organisations, and machines that results from the Internet, mobile technology and the internet of things (IoT).

As the country moves towards 5G deployment and aims to deliver on its digital goals and ambitions, mobile broadband must remain at the heart of the country’s policy vision. To achieve the potential of the 5G era, three critical elements are required: substantial investment in digital infrastructure; a digital environment that inspires trust; and a modernised policy and regulatory framework.

Also driving the digital economy is Internet usage and market readiness in the region remains a key determinant for the transition to 5G technology.

While the scale of China’s digital economy hit 39.2 trillion yuan in 2020, accounting for 38.6 per cent of the country’s GDP, Nigeria is considered to be one of the fastest-growing African markets in mobile subscriptions and it has continued to be a pioneer in the FinTech space, especially around mobile-based financial solutions.

#The Nigeria Digital Economy Journey

Currently undergoing an unprecedented digital transformation and in its move, Nigeria has unveiled several policies and initiatives to make 5G deployment in the country viable in the long term.

The Ministry of Communications and Digital Economy under the leadership of Dr. Isa Ali Ibrahim Pantami has implemented numerous policy initiatives under the National Digital Economy Policy and Strategy (NDEPS) 2020-2030, the Nigerian National Broadband Plan (NNBP), 2020-2025 and several other policy initiatives developed by the Ministry to ensure effective digitisation of the Nigerian economy, both from public and private sector perspectives.

The NDEPS, which was anchored on eight pillars, will accelerate the development of a digital economy in Nigeria.

Speaking at the unveiling of the policy in 2019, Pantami said NDEPS will enable Nigeria to take advantage of them to become a leading player in the global digital economy and provide a catalyst to facilitate the diversification of the economy and the attainment of the key national objectives of improving security, reducing corruption and expanding the economy.

The pillars of the NDEPS were carefully selected to include all the key aspects that Nigeria needs to focus on to actively participate in the global digital economy. Special consideration has also been given to the nation’s areas of strength and comparative advantage as a country.

The Nigerian Communications Commission (NCC) has also unveiled a new Strategic Vision (Implementation) Plan (SVP 2021-2025) which underscores the centrality of broadband in the nation’s journey to a modern digital economy.

It was widely acknowledged that the diligent execution of the first SVP initiative, under the leadership of the Commission’s Executive Vice Chairman, Prof. Umar Danbatta has helped to consistently lift broadband penetration, increase telephone access, and boost the sector’s contribution to the Gross Domestic Product (GDP).

It should also be noted that the Federal Executive Council (FEC) had weeks back formally gave approval for the national policy on the 5G network which provides the framework for rollout of 5G services in line with the National Digital Economy Policy and Strategy (NDEPS) 2020-2030.

Furthermore, the Minister of Communications and Digital Economy, has announced plans to roll out 5G networks in Nigeria by January 2022.

According to a statement by the commission, the National Frequency Management Council (NFMC), chaired by the Minister of Communications and Digital Economy, will soon release the 5G Spectrum to the NCC for auction to MNOs that will need the spectrum for 5G deployment.

#5G and Spectrum Rollout

NCC said that in line with the objectives of the National Digital Economy Policy and Strategy (NDEPS) 2020-2030 for a Digital Nigeria, and the positioning of Nigeria as an early adopter of digital technology in the growing global digital economy, the successful and timely deployment of 5G is crucial. 5G is expected to facilitate several emerging technologies, generate innovative use cases, spur significant socio-economic growth and create jobs.

Danbatta, has restated that the deployment of the 5G technology will initiate several new changes in mobile connectivity with enormous capacity to boost productivity and grow the Nigerian economy.

The NCC boss said this while delivering the keynote address, tagged: “5G Deployment: Catalyst For Digital Transformation in Nigeria” at the International Conference on Multidisciplinary Engineering and Applied Sciences (ICMEAS) 2021, held at the Nile University of Nigeria, Abuja.

“The goal of the commission is that Nigeria becomes one of the leading nations with 5G technology deployed in a manner that is beneficial to all the stakeholders and contributes maximally to the digital economy policy of the federal government.”

“The FG will provide an enabling environment for the 5G deployment, but the MNOs will determine their own deployment strategies subject to alignment to the approved policies and other regulatory instruments in force,” he said.

Also speaking, the Chairman, Board of Commissioners of Nigerian Communications Commission (NCC), Prof. Adeolu Akande. said 5G would build on the successes of the previous generations of 2G, 3G and 4G, adding that spectrum plays a great role in the deployment of 5G.

He said: “Spectrum plays a critical role in realising the full extent of these new capabilities. Thus, 5G’s full socio-economic impact is dependent on access to a variety of spectrum resources.

“This Spectrum will play a key role in meeting the demand for many enhanced mobile data services as well as new wireless broadband cases such as remote object manipulation, industrial automation, virtual and augmented reality and next-generation connectivity for a vehicle.

“The 5G will build on this momentum, bringing substantial network improvements, including higher connection speeds, mobility and capacity, as well as low-latency capabilities. In doing so, it enables new cases and applications that will positively impact different sectors and improve efforts towards achieving digital economies.” Akande stated.

To this, World Economic Forum said governments and regulators must align spectrum pricing with policy goals and license as much spectrum as possible as quickly as possible. This means factoring in the long-term value of a strong network instead of upfront license fees.

#Things to Consider

The Managing Director of Vertiv, Middle East and Africa, Pierre Havenga, expressed that the success of 5G network implementation on the African continent in support of digital economic growth will naturally be reliant on the support of national governments and regulators.

He, however, highlighted that Africa continues to see high demand for mobile, online, and digital services, and this is being boosted as fibre rollouts continue to connect major urban centres.

“This evolution has fueled massive demand for local data centre infrastructure to support the increasing needs from African businesses undergoing digital transformation and pursuing colocation and cloud computing services as an integral part of that change”, he said.

First and foremost, government buy-in from a value proposition standpoint is critical. It is important for national governments to understand the significance of 5G technology in promoting digital inclusion, the impact of 5G on the industry in terms of making manufacturing more efficient, and the sustainability of 5G.

Secondly, licensing for the spectrum is perhaps one of the most important actions that should be undertaken to support 5G deployment.

To encourage long-term heavy investments in 5G networks, governments should adopt national spectrum policy measures and frameworks.

In collaboration with the private sector, governments can facilitate the evolution and security of 5G networks and incentivize network operators to build nationwide networks faster.

However, the strides that have been made in the last couple of years alone, paint a very optimistic picture of the future as 5G has arrived, Havenga noted.