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News ICT powers nearly 90% of Nigeria’s GDP – Expert

Dr. Ayotunde Coker, the Chief Executive Officer of Open Access Data Centre, has revealed that Information and Communication Technology accounts for nearly 90% of Nigeria's GDP, despite the sector's official contribution of around 20% in Q2 2023.

Dr. Coker revealed this during the Nairametrics Industry Spotlight webinar titled "Beyond Connectivity: Telcos and the Future of Financial Inclusion in Nigeria."

He emphasized the widespread impact of ICT across industries.

He noted that, while the ICT sector's direct contribution was 19.78% in the second quarter of this year, its influence extends to nearly all sectors of the economy, establishing it as a critical driver of productivity and growth.

Dr. Coker emphasized that the role of ICT extends beyond telecommunications, influencing various industries in ways that are frequently not fully reflected in traditional GDP measurements.

"We must consider the impact beyond telecoms and focus on the broader digital infrastructure because telecoms cannot exist without data centers; endpoint mobile communications, voice and data cannot exist without the supporting infrastructure of towers, and so on.

"There are a lot of back-end things that make the endpoint work," said the engineer.

He stated that several industries, including oil and gas, finance, and others, rely heavily on ICT infrastructure to function effectively.

The oil industry, for example, relies on connectivity to support its exploratory capabilities, which are critical to its operations. Much of what happens in these industries would be impossible without information and communication technology," he stated.

He described how financial services have become increasingly technology-driven, with banks essentially operating as tech companies that manage money.

The rise of fintech has emphasized the importance of ICT by adding digital solutions to traditional financial services.

"A bank today is essentially a technology company that happens to deal with finance," Dr. Coker explained, emphasizing the importance of technological infrastructure in many industries.
Based on these realities, I can conclude from anecdotal evidence that technology affects at least 90% of what we do in terms of GDP, despite accounting for only 20%," he said.

Dr. Coker also emphasized the role of broadband penetration in driving economic growth.

He stated that Nigeria's overall broadband penetration currently ranges between 45% and 47%, but efforts by the government and industry stakeholders could push this figure above 50% soon. However, he emphasized the importance of focusing on "meaningful broadband," which refers to broadband service quality and adoption rather than coverage.

"Broadband alone is not sufficient. What matters most is broadband adoption at the endpoint. It must be used meaningfully in order to drive economic growth.

"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 explained.

According to data recently released by the National Bureau of Statistics, ICT-related activities contributed 19.78% of Nigeria's real GDP in Q2 2024.

This represented a marginal increase in contribution compared to the 19.54% recorded during the same period last year.

The sector's contribution increased from the previous quarter to the current quarter.

According to NBS data, ICT contributed 17.89% of real GDP in the first quarter of 2024.

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