Telcos Contribution to Nigeria’s GDP to Increase over Covid-19 Outbreak

Despite the negative effect, the outbreak of Covid-19 posits on the global economy, investigations have revealed that the outbreak of the deadly virus may have some positive impact on Nigeria’s telecommunications sector.

Covid-19, a deadly virus declared by the World Health Organisation (WHO) as a pandemic has in the last few weeks resulted to close down of business operations across the globe.

According to the Nigeria Bureau of Statistics (NBS), Nigeria’s Gross Domestic Product (GDP) grew by 2.55% in real terms in the fourth quarter (Q4) of 2019, up from 2.38% growth recorded in the fourth quarter of 2018.

However, NBS attributed that the 0.17% point increase in the growth of the Nigerian economy (year-on-year) to the outstanding contribution of the Information and Communication Technology (ICT) sector.

NBS said, “The increase during the fourth quarter of 2019, was driven mainly by Information and Communication (Telecommunications), Agriculture (Crop Production), Financial and Insurance Services (Financial Institutions), and Manufacturing.”

Telcos regulatory body, Nigerian Communications Commission (NCC) statistics revealed that Nigeria’s telcos contributed 10.60 to the country’S GDP in the Q4 of 2019.

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With a positive impact recorded in the country’s GDP, findings show that the sector may further record an increase in its contribution to the GDP following the outbreak of coronavirus.

Business Remarks gathered that, Covid-19 outbreak has resulted in information sourcing by the people as government prioritized digital services to sensitize the people in curbing the menace.

Further findings show that businesses have adopted “work remote” strategy to minimize physical contacts and spread of the virus. Video Conferencing, email conversations and different social media tools are being utilized to promote business operations.

In Nigeria, mobile services promote digital inclusion and enable 83 million Nigerians to benefit from the exchange of information for business and social purposes increased productivity and improved access to information.

Mobile technology is regarded as an enabler for growth across all sectors of the economy, from financial services, to agriculture, distributions and to telecommunications.

The President, Association of Telecommunications Companies of Nigeria (ATCON), Mr Olusola Teniola told Business Remarks that, the increase in digital usage will create a sustainable impact in Nigeria’s economy.

He added that the penetration will further deepen ICT contribution to the country’s GDP which is currently at a double digital.

He said there will be a sharp increase in the usage of collaborative tools and online presence via e-health, e-commerce and e-learning.

In his words, “With the development of increase data usage, there will be a sustainable positive return for the mobile network operators. With Airtel data reduction which others will soon follow, we expect that more subscribers will come into the digital space.

“As a result of this, working from home will increase to spearhead the digital economy transformation.

I believe that telcos contribution to the GDP will increase by 2-3 per cent and will add to the current double-digit the sector is contributing to the economy.’’

While assuring Nigeria’s network infrastructure is capable of sustaining the increase in internet connectivity in Nigeria, Teniola added that the reduction of data prices as a result of Covid-19 outbreak will encourage an increase in data subscription which will further boost the sector’s contribution to Nigeria’s GDP in Q1 2020.

He however noted that, if the coronavirus should persist beyond Q2, it may have a negative impact in the telcos industry as a result of reduction in shipment of technological devices from China which is the country’s major supplier of technology devices.