The Nigerian telecommunications sector has increased its contribution to the Gross Domestic Product (GDP) of the country in the second quarter of 2016, amid the current recession.
[quote font=”georgia” font_size=”22″ font_style=”italic” align=”left” arrow=”yes”]According to NBS, “this is the largest contribution to GDP made from this sector in the rebased period, which emphasizes that growth in telecommunications has remained robust when compared to total GDP.”[/quote]According to the latest telecommunications data released by the Nigerian Bureau of Statistics (NBS), in real terms, the telecommunications sector contributed N 1.580 billion to GDP in the second quarter of 2016, or 9.8%, which represents an increase of 1.0% points relative to the previous quarter.
According to NBS, “this is the largest contribution to GDP made from this sector in the rebased period, which emphasizes that growth in telecommunications has remained robust when compared to total GDP.”
The NBS however says that the contribution from telecommunications sector is usually the largest in the second quarter due to “differing seasonal patterns.”
In terms of year on year growth in the telecommunication sector, the story is different as the sector recorded the poorest growth since Q3 2011, according to the NBS figures.
Growth in the telecommunications sector remained positive though, but in contrast with the economy as a whole, year-on-year growth nevertheless dropped in real terms from 5.0% in the previous quarter to 1.5%, which represents the lowest rate since Q3 2011.
The share of telecommunications in total real GDP had declined throughout 2010 to 2014, but for the last five quarters growth in telecommunications has been higher, meaning the trend has reversed, the NBS report indicates.
NBS says that the total number of telecom subscribers has increased rapidly over the past decade showing that at the end of 2005 there were 19,519,154 subscribers, but by the end of 2015 there were 151,017,244, which is equivalent to an increase of 13,149,809 every year.
However, growth has been declining more recently, possibly as a result of high market penetration leaving less room for large expansion, the NBS believes.
In June 2016, the end of the second quarter, there were 149,803,714 subscribers compared with 148,775,410 in June 2015, which represents an increase of 0.69%.
The yearly increase in total subscriber numbers has been decreasing steadily for the past year with the year on year increase standing at 12.05% in June 2015.
The report however reveals that, after falling between January and April 2016, the number of subscribers began to increase again, and in June the number was 0.71% higher than at the end of the first quarter in March, which indicates a good sign of improvement.
The telecommunications data used in this report were obtained from the National Bureau of Statistics (NBS) and the Nigerian Communication Commission (NCC).
Variables obtained from NBS include Gross Domestic Product contribution and growth, while NCC indicators include those on subscribers to mobile and Internet services by provider, porting activities and information on tariffs.
All data are subject to amendments by NCC and should be treated as preliminary, according to the NBS.