When COVID-19 brought the global economy to its knees at the beginning of 2020, communications was one of the few sectors that remained resilient. In Nigeria, the sector did not only show resilience, it recorded growth and major strides.
The COVID-19 pandemic had forced a lockdown upon Nigeria that restricted movements, shut down businesses and left the economy almost grounded. However, Nigeria’s communications sector, like other countries in the developed world, came out resilient, driven by increased demand for mobile internet data and growth in the number of mobile subscribers.
According to the Gross Domestic Product (GDP) report by the National Bureau of Statistics, the telecommunication sector recorded an 18 per cent growth in the second quarter of 2020 compared to 11 per cent recorded in the corresponding quarter of 2019.
The increased double-digit growth confirmed the sector as the fastest, most resilient and biggest contributor to Nigeria’s economic growth. Indeed, Nigeria’s telecommunication sector has proven to be one of the biggest gainers amid the COVID-19 pandemic.
Due to the COVID-19 pandemic, individuals and organizations have been adjusting to the digital workspace, creating an increased need for digital communications and connectivity. This new normal has created more demand for data services, and further spurred growth in the sector.
Schools, churches, local and international seminars and conferences and even ceremonies had to move to online platforms using teleconferencing tools like Zoom, Microsoft Teams and Skype. What this means is an increase in the volume of voice and data traffic.
One of Nigeria’s telecom service providers, MTN released its unaudited financial result for the first quarter of 2020, showing increased data revenue by 22.9 per cent, voice revenue by 12.7 per cent and service revenue by 13.4 per cent. This implies an average growth in revenue of 20.3 per cent.
In October, Stripe, an American fintech company, announced the acquisition of Nigeria based Paystack, a mobile payment technology that makes it easy for small businesses to collect payments from around the world.
The deal, worth 200 million dollars, has been described as the biggest startup acquisition to date to come out of Nigeria, as well as Stripe’s biggest acquisition to date anywhere.
The success story of Paystack highlights the role of communications technology in creating opportunities in other sectors ranging from entertainment and broadcasting to banking and finance here in Nigeria. It also highlights the interest of foreign investors in Nigeria because of the country’s growing communications sector.
In September, Netflix, a US-based global content streaming service, announced it had commissioned four new original stories in Nigeria. The announcement came amidst efforts to deepen its presence in Nigeria with the launch of cheap mobile subscription plans for smartphone users.
Still, in September, social media giant Facebook announced its plans to open new offices in Lagos in 2021. The offices will support tech-based Small and Medium Enterprises (SMEs) and make Nigeria a major hub for Facebook’s operation in the West African region.
But despite the success stories and significant progress made in Nigeria’s communications industry, there is still plenty of room for growth. Broadband penetration remains weak at just under forty per cent as of 2019 compared to other countries like Egypt and South Africa. This gap suggests opportunities for more investments with a potential multiplier effect on growth across sectors.
Suzan O
