Nigeria is among the countries with the cheapest data rates in the World, recent studies have revealed.
As of August 2023, the country’s average cost for 1GB of mobile data was $0.39 [₦604], placing the country 31st out of 237 in global rankings for affordable mobile data.
…in Africa
And with telecommunications tariffs remaining the same in close to 12 years, Nigeria is listed among countries with lowest mobile data costs.
When compared to other countries, For instance, the average cost of 1GB of data in Nigeria is $0.39 [₦604], second to Malawi which ranks 29th globally with an average price of $0.38 [₦588.05] per 1GB, the same as in China.
Comparatively, it is $0.40 [₦618.4] in Ghana; $0.59 [₦913] in Kenya; Egypt: is $0.65 [₦1,004.55]; $0.68 [₦1052.29] in Ethiopia; $1.77 [₦2739.06] in South Africa; $6 [₦9284.94] in the USA, and $7.36 [₦11,389.53] in Canada.
Still on the cheapest data rates, Zimbabwe has the highest global cost of data, with 1GB priced at $43.75 [₦67,702.69].
Connectivity to mobile services, including Mobile Money is the foundation on which digital economy is built.
The Mobile Network Operators (MNOs) are committed to investing to support the realization of the digitalization ambitions that will unlock economic growth and development in the country.
However, stakeholders have recently bemoaned the challenges hindering the growth and development of the telecommunications industry in Nigeria.
Contributions of Telecommunications to Nigeria’s economy
The affordability of mobile data in Nigeria has contributed to increased data consumption.
Available statistics from the Nigerian Communications Commission (NCC) indicates Nigerians used a total of 721,522 terabytes of data in January 2024, marking the highest monthly data consumption ever recorded in the country.
Additionally, reports from major telecom operators indicate that the average Nigerian consumes approximately 9GB of data monthly.
These statistics highlight Nigeria’s position as among the countries with the cheapest mobile data rates, fostering increased internet usage and digital engagement among its population.
Economic Impacts:
In the third quarter of 2024, Information and Communications Technology (ICT) contributed 16.35% to Nigeria’s real Gross Domestic Product (GDP). Although, this was a decrease from the 19.78% contribution in the previous quarter, it points to the growing challenges faced by operators.
Compare it to 2023 when the mobile sector [alone] accounted for 13.5% of total GDP in Nigeria, including the direct value-added by wider ICT industries and the sector’s impact in enhancing the productivity of other sectors.
Overall, the mobile sector’s total contribution to GDP is estimated at ₦33 trillion in 2023, with ₦2.4 trillion in tax revenue contributions.
A thriving digital economy would have a material impact on the economy of Nigeria over the next 3-5 years.
It is estimated that increased digitalization in agriculture, manufacturing, transport, trade and government will increase GDP by around two percentage points by 2028.
This would also create nearly 2 million jobs and raise an additional ₦1.6 trillion in tax revenue.
These have been well documented in a recent report by the Global System for Mobile Communications Association (GSMA), released last year.
Challenges
The telecoms sector in Nigeria faces a series of significant challenges. These range from operational factors that make it difficult to build and operate network infrastructure; unfavourable economic conditions; poor economic infrastructure and funding constraints.
These factors all impact the financial sustainability of continued investment in the sector.
The challenges faced by operators were summed by Engineer Gbenga Adebayo, the chairman, Association of Licensed Telecommunication Operators of Nigeria (ALTON).
He described the telecom sector as “under siege,” citing soaring operational costs driven by inflation, volatile exchange rates, and rising energy prices hence they are asking for 100% upward review of tariffs in the sector.
From expanding 4G and 5G networks to meeting growing demand in urban and rural areas, the operators have painstakingly absorbed the rising costs of these obligations to avoid compromising the customer experience and ensuring Nigerians, regardless of their location, have access to mobile communication and remain connected to the digital economy.
Telecommunications operators have worked tirelessly to sustain services despite keeping tariffs unchanged for the last 11years plus.
Government’s response
Speaking after a stakeholders’ meeting in Abuja, this week, Dr. Bosun Tijani, the minister of Communications, Innovation and Digital Economy highlighted the importance of proper regulations to ensure the telecommunications sector’s sustainable growth.
He emphasised the need for a balanced approach to support the industry amidst global inflationary pressures.
“The verdict is that tariffs will increase, but not by 100 per cent. We are still reviewing the commissioned study, and the Nigerian Communications Commission will issue directives to strike a balance.
“This is about protecting Nigerians while ensuring telecom companies can continue to invest significantly,” Tijani said.
He outlined key initiatives under consideration, including enforcing the executive order to safeguard telecommunications infrastructure and increasing local content in the industry.
These measures aim to sustain the sector’s contributions to Nigeria’s economic development.
Industry stakeholders are patiently waiting on the government, particularly the industry regulator – NCC – to translate these processes and policies to tangible answers to the questions on the minds of the operators, consumers and investors alike.
