Telecom to Contribute N190bn to Nigeria’s GDP
- By Abimbola Tooki
- Published August 1st, 2011
- News
- Unrated
The telecommunications sector is expected to contribute over N190 billion to the nation’s Gross Domestic Product (GDP) by 2015. However, the country can only enjoy this benefit if adequate measures are put in place to open up the broadband sub-sector of the telecom industry.
Fola Adeola, chairman of MainOne Limited, a submarine cable operator in Nigeria, said at last week’s broadband summit organized by BusinessWorld Newspaper and the Association of Telecom Operators of Nigeria (Atcon) that government urgently needs to take a critical lead in establishing an appropriate broadband policy that will lead to a favourable operating environment for investors and encourage service uptake to drive further investments in this direction.
Other critical issues that need to be addressed by the federal government in order to renew investor confidence and drive growth outside the oil and gas sector, according to Adeola, include policy reforms which will improve several areas of dependencies such as power, security, ICT infrastructure, roads and other transportation infrastructure, education, and preparedness of the workforce for skilled jobs, improved financial and capital market structures. “Investors will remain wary until they see political certainty, which hopefully, should improve, following the performance and outcome of the last election,” he said.
Going by a landmark study published by the World Bank in 2009, for every 10 per cent increase in internet penetration, there is a resultant 1.3 per cent growth in GDP. In addition, the European Commission estimates two million jobs and GDP growth of EUR 636 billion in Europe by 2015 through increased broadband penetration, while Brazil in 2010 reported that broadband added 1.4 per cent to employment growth rate. China claimed 10 per cent increase in broadband penetration. In fact, 10 per cent higher broadband penetration in a specific year has been found to correlate with 1.5 per cent greater labour productivity growth.
For developing countries in the low and middle-income brackets such as Nigeria, Adeola noted that broadband is a key driver of commerce and economic development, thus a veritable Foreign Direct Investment (FDI) tool.
“Broadband therefore represents a new frontier for investment in the Nigerian economy in the next decade,” he said. “Investment in broadband services and technology itself is expected to grow in Nigeria in the next decade, if the current level of service penetration posted at about one per cent to 2.8 per cent by the year end 2010 is anything to go by, and given the over 150 million people population that the country is blessed with.”
Adeola said the existing investment profiles in the industry have shown that efficient management will guarantee return on investment, so much as the tremendous increase in Nigerian mobile phone subscribers (90 million according to the NCC) has equally demonstrated for all how the right policies, and the right partnerships between the public and private sectors can result in exponential growth, job creation and a contribution to GDP. “This can happen with broadband as well,” he said.
He said the digital age is here and the global dependence on ICT should not be lost on Nigerian investors as it would take shape in Nigeria sooner than it could be imagined and will underpin investment opportunities within the next decade. “In this new dispensation, enterprises in Nigeria will need to deploy ICT technologies and solutions dependent on broadband services quite rapidly to remain globally relevant,” he said. “Diverse investment opportunities will continue to exist in broadband infrastructure, services and products, medium (i.e. outsourcing) and content, etc. among others.”
Adeola disclosed that the Nigerian market will remain a suitable target for future global investment as the concept of one global ICT village continues to be redefined and global footprint becomes more paramount for international investors in the next decade.
Fola Adeola, chairman of MainOne Limited, a submarine cable operator in Nigeria, said at last week’s broadband summit organized by BusinessWorld Newspaper and the Association of Telecom Operators of Nigeria (Atcon) that government urgently needs to take a critical lead in establishing an appropriate broadband policy that will lead to a favourable operating environment for investors and encourage service uptake to drive further investments in this direction.
Other critical issues that need to be addressed by the federal government in order to renew investor confidence and drive growth outside the oil and gas sector, according to Adeola, include policy reforms which will improve several areas of dependencies such as power, security, ICT infrastructure, roads and other transportation infrastructure, education, and preparedness of the workforce for skilled jobs, improved financial and capital market structures. “Investors will remain wary until they see political certainty, which hopefully, should improve, following the performance and outcome of the last election,” he said.
Going by a landmark study published by the World Bank in 2009, for every 10 per cent increase in internet penetration, there is a resultant 1.3 per cent growth in GDP. In addition, the European Commission estimates two million jobs and GDP growth of EUR 636 billion in Europe by 2015 through increased broadband penetration, while Brazil in 2010 reported that broadband added 1.4 per cent to employment growth rate. China claimed 10 per cent increase in broadband penetration. In fact, 10 per cent higher broadband penetration in a specific year has been found to correlate with 1.5 per cent greater labour productivity growth.
For developing countries in the low and middle-income brackets such as Nigeria, Adeola noted that broadband is a key driver of commerce and economic development, thus a veritable Foreign Direct Investment (FDI) tool.
“Broadband therefore represents a new frontier for investment in the Nigerian economy in the next decade,” he said. “Investment in broadband services and technology itself is expected to grow in Nigeria in the next decade, if the current level of service penetration posted at about one per cent to 2.8 per cent by the year end 2010 is anything to go by, and given the over 150 million people population that the country is blessed with.”
Adeola said the existing investment profiles in the industry have shown that efficient management will guarantee return on investment, so much as the tremendous increase in Nigerian mobile phone subscribers (90 million according to the NCC) has equally demonstrated for all how the right policies, and the right partnerships between the public and private sectors can result in exponential growth, job creation and a contribution to GDP. “This can happen with broadband as well,” he said.
He said the digital age is here and the global dependence on ICT should not be lost on Nigerian investors as it would take shape in Nigeria sooner than it could be imagined and will underpin investment opportunities within the next decade. “In this new dispensation, enterprises in Nigeria will need to deploy ICT technologies and solutions dependent on broadband services quite rapidly to remain globally relevant,” he said. “Diverse investment opportunities will continue to exist in broadband infrastructure, services and products, medium (i.e. outsourcing) and content, etc. among others.”
Adeola disclosed that the Nigerian market will remain a suitable target for future global investment as the concept of one global ICT village continues to be redefined and global footprint becomes more paramount for international investors in the next decade.
