Nigerians have protested the federal government’s decision to approve a 50% increase in telecom tariffsDespite the reactions, GSMA believes that the tariff hike is a blessing that will significantly impact the Nigerian economy’s growthGSMA also urged Nigerians to expect increased investment in the sector and infrastructure development
Henzodaily.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Global System for Mobile Communications Association (GSMA) has projected that the telecommunications sector’s contribution to Nigeria’s Gross Domestic Product (GDP) will rise by 2% by 2028, following the government’s approval of a 50% tariff increase in telecom services.
Telecommunication companies to invest in infrastructure after telecom tariff hike.
Photo credit:nurphoto
Source: Getty Images
This was disclosed during the presentation of the GSMA Digital Economy Report 2024 to the media over the weekend..
At the media briefing, GSMA executives, Angela Wamola, Head of Sub-Saharan Africa, and Caroline Mbugua, Senior Director of Public Policy & Communications for Sub-Saharan Africa, also addressed the potential impact of the 50% tariff hike on the sector, consumers, and the broader economy.
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According to GSMA, the tariff hike by the government will attract investment and infrastructure development that will translate to digital transformation for industries such as agriculture, manufacturing, trade, and government services.
GDP growth by 2%
Speaking Wamola who gave this insight noted that the Nigerian telecommunications sector accounted for 13.5% of the country’s GDP in 2023, translating to approximately N33 trillion.
She said:
“The success of a digital economy will have a significant impact on everyone in Nigeria over the next 3 to 5 years.
“If we do succeed, it is estimated that there will be growth in digitalization in agriculture, manufacturing, transport, and government.
“This growth could increase GDP contribution by 2 percentage points by 2028, creating an additional 2 million jobs in our sector alone within 3 years and raising overall contributions for everybody.”
Reiterating Wamola’s projections, Mbugua stressed that as the telecom industry grows the Nigerian economy will benefit.
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Her words:
“To see the sector increase its contribution to about 20 to 22% by 2030. That requires investment. And the more the sector grows because of how big it is in the economy of Nigeria, the more beneficial it is because of the different, solutions that can be delivered to consumers reliably and in a sustainable manner. We are in the era everybody is talking about sustainability and the evolution into new technologies.
“For you to deliver such high-quality service, significant investment is required. What we’re emphasiSing is that, ultimately, this will benefit consumers, the overall economy of Nigeria, and, of course, the sector and government by growing both the sector and the economy.
” A lot of what we’ve seen in these digitalization reports from countries like Kenya, Ethiopia, South Africa, Zambia, DRC, and Benin shows that no other market we’ve encountered has seen such a significant contribution from the sector to GDP.”
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GSMA: NCC’s decision to hike telecom tariffs by 50% to drive investment in Nigeria’s digital future
15 million new telecom subscribers
GSMA also projected that the migration to 5G coverage will add 15 million people to the number of internet users in Nigeria by 2028, ThisDay reports.
Mbugua said the growth and development of the sector and the broader economy would be stimulated by 2028 if the necessary 4G and 5G coverage with the right level of quality of service was provided.
MTN reacts to FG’s approval of 50% hike
Henzodaily.ng reported that MTN has reacted to the federal government’s decision to increase call, data, and SMS tariffs
The telecommunications giant assured subscribers that the tariff adjustment would improve services.
Karl Toriola, CEO of MTN Nigeria, said the adjustment would address rising operational costs and ensure critical investments in infrastructure in the telcom industry.
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Source: Henzodaily.ng