Nigeria’s ICT ministry moves to boost sector’s local content

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African’s largest economy and most populous nation Nigeria, expects broadband penetration to hit 50 per cent by 2020 from current rate 6 per cent connecting more Nigerians to the Internet at better speeds and at a better price, Information Technology and Communications Minister, Omobola Johnson said.

“If we continue at this pace in terms of infrastructure we should see over 100 per cent mobile penetration and the broadband penetration will hit 50 per cent by 2020,” she said in an interview at the recently concluded FBN Capital Investor Conference 2014 in Lagos.

“More Nigerians will have access to better download speeds of over 1.5Mbps (Megabits per second),” said Johnson

E-commerce, indigenous device market and e-government will boost growth in the ICT sector providing Nigerians with more local contents, the minister went on to say.

Over the years, the country has been reeling out policies to ensure that the current broadband penetration rate which currently stands at 6 per cent improves, according to data from the Nigeria Communication Commission (NCC).

Africa is ranked second-to-last among world regions in terms of its Broadband development.

Recent data by Ovum’s Broadband Development index, which tracks the take up of high speed fixed and mobile broadband services in 191 countries scored Africa 226 out of 1,000 in 2014.

Within the Sub-Saharan region, taking into consideration only countries with over 3 million people, Nigeria was ranked joint fourth with Uganda based on the best performer index with a score of 227 out of 1,000 behind South Africa, Kenya and Zimbabwe.

Access to the web via fixed (wired) broadband subscriptions amounted to a mere 15, 045 in 2013 according to the international Telecommunication Union (ITU), a penetration rate of 0.009 per cent.

Nigeria’s bandwidth has increased 26-fold in the past 4 years to more than 9, 000 GB/s according to the ICT ministry.

Studies by the World Bank suggest that for developing countries, a 10 per cent increase in broadband penetration translates into the GDP growth of about 1.4 per cent.

Analysts at the event said there were a lot of upside potential in the ICT Industry as it was one of the major drivers behind the rebased GDP series, contributing around 10 per cent to the country’s GDP of N80.22 trillion.

The Internet continues be a key driver for the Nigerian economy, where the number of mobile Internet subscribers is forecast to surge from 7.7 million in 2013 to 50.4 million in 2018, according to recent report by PwC.

According FBN Capital research, “Growth in active lines has slowed dramatically and margins have narrowed whereas the sale of internet subscriptions by Telecoms operators increased by 33 per cent y/y in July to 67.2 million.”

Nigeria is currently home to about 40 per cent of Africa’s total Internet users.

The minister projects that for the Nigeria’s data revolution to take off; $25 billion in investments would be required over the next 5 – 10 years.

Nigeria’s ICT sector opens up a lot of opportunities across sectors of the economy – the value added to other sectors is at 2.6 per cent, according to Johnson.

Nigeria remains a target for international phone companies eager to tap into demand from the country’s 170 million people. The total number of connected mobile-phones increased to 177 million as of the end of April, compared with 170 million at the start of the year, according to the Nigerian Communication Commission.

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