ICT leads sectoral contribution to GDP with over N4trn in Q1, 2021

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By Prince Osuagwu, Hi-Tech Editor, Emmanuel Elebeke & Juliet Umeh

Information and communications technology, ICT sector alone contributed over N4 trillion to the N40 trillion the country generated as Gross Domestic Product, GDP in Q1, 2021.

This is even as the sector fell 10 percent behind its contribution in the same quarter last year.

Statistics recently released by the National Bureau of Statistics NBS, revealed that the sector contributed about 9.91 percent to the total GDP in Q1 2021, lower than the 10.31 percent recorded in the same quarter of 2020 and 10.58 percent it contributed in the preceding quarter.

However, the sector still recorded higher contribution when compared to the oil sector which contributed just 9.25 percent.

According to the NBS, “Nigeria’s Gross Domestic Product, GDP grew by 0.51 percent year-on-year, in real terms in the first quarter of 2021, marking two consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.
“In terms of contribution to aggregate GDP, the oil sector accounted for 9.25 percent of aggregate real GDP in Q1 2021, while the non-oil sector accounted for 90.75 percent of aggregate GDP in the first quarter of 2021.

“Growth in the non-oil sector was driven mainly by the Information and Communication Technology sector while other drivers include Agriculture (Crop Production); Manufacturing (Food, Beverage & Tobacco); Real Estate; Construction and Human Health & Social Services”.

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Reacting to the development, Minister of Communications and Digital Economy, Dr Ibrahim Pantami, says the consistent positive performance of the ICT sector to the growth of Nigerian economy is as a result of the development and implementation of relevant policies which have provided enabling environment for the ICT sector to thrive. Pantami said that ICT sector grew by 6.47 percent in Q1 2021, making it the fastest growing sector of the Nigerian economy.

He said: “The Federal Government has provided an enabling environment for the ICT sector to thrive, through the development and implementation of relevant policies, including the National Digital Economy Policy for a Digital Nigeria, Nigerian National Broadband Plan and the Revised National Digital Identity Policy for SIM Card Registration, among others.

“The GDP Report has shown that the ICT sector continues to serve as a catalyst for the growth and diversification of our economy” he added.

Throughout the pandemic, the ICT sector has remained a major contributor to the country’s economy, following spikes in the rate of online activities and data usage.

Despite the negative impact the pandemic brought to world economies, new methods of delivering goods and services sprouted and new online-based businesses were born.

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These new developments gave a new financial impetus to the sector, resulting in the strong GDP contributions it posts quarter after quarter.

Meanwhile, a few of the telecom services providers who spoke on condition of anonymity said while it is commendable that the sector leads contribution to GDP, the federal government should take notice of the 10 percent drop between the quarter under review and same time the previous year, adding that some of the policies it introduced contributed to the downward trend.
One of them said: “Ordinarily the sector shouldn’t be celebrating its contribution to the GDP this year because it fell short of expectations.

It becomes more worrisome when you realise that the downward movement is self inflicted. The most probable cause of the reduction in growth is the drop in telecom subscribers across operators due to the SIM registration ban.

The number of people that would have bought new SIMs and the accompanying airtime and data resources would have resulted to more revenues for the sector, more tax payment to the government, and eventually more contribution to the GDP” he added.

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