Understanding what is Happening in ICT in Nigeria: A Supply- and Demand-side Analysis of the ICT Sector

The Nigerian telecommunications market is fully liberalised, highly competitive, and evolving with time. Since 1992, a wide range of regulatory initiatives has been undertaken to open up the market to private operators to provide products and services across the entire spectrum of ICT market segments. These initiatives, particularly in relation to market entry, have resulted in an impressive 53% compound annual growth rate (CAGR) in overall fixed and mobile subscriptions since 2001. Quarterly telecommunications sectoral growth is up to 35%, and the sector’s annual contribution to GDP was estimated at 6.73% in 2012. However, in spite of the widely publicised successes, Nigeria, as highlighted in this RIA Sector Performance Review (SPR), lags behind many other African countries with respect to a number of market indicators. Nigeria ranks 5th with respect to mobile penetration and 5th in terms of industry perception of the effectiveness of domestic telecommunications regulation. In terms of RIA’s broader Pricing Transparency Index: Prepaid Mobile for 2012, Nigeria ranks 17th out of 46 countries in terms of the affordability of the cheapest prepaid mobile product from a dominant operator, and 13th out of 46 for affordability of the cheapest mobile prepaid product from any operator. Although the future and prospects for the Nigerian ICT sector appear rich, achieving the necessary scale and pace of growth is predicated on finding the correct mix of regulatory initiatives and interventions needed to encourage greater competition among market players and deeper penetration and usage of the entire range of ICT services.