Mobile sub-sector adds $170 billion to Nigeria, others

The mobile sub-sector in Nigeria and other parts of sub-Saharan Africa added $170 billion to the region’s economy in 2022. This is even as the sub-sector made a substantial contribution to the funding of the public sector, with around $20 billion raised through taxes on the sector. A large contribution was driven by services, VAT, sales taxes and excise duties, generating $10 billion, followed by corporate taxes on profits at $5 billion.

The Global System for Mobile telecommunications Association (GSMA), which revealed this in its ‘2023 Mobile Economy Report for Sub Saharan Africa,’ said in 2022, mobile technologies and services generated 8.1 per cent of Gross Domestic Product (GDP) across SSA, a contribution that amounted to around $170 billion of economic value added. It disclosed that the greatest benefits came from productivity effects reaching $110 billion, followed by mobile operators, which generated $40 billion.

GSMA, which is a global umbrella body for telecoms companies, projected that by 2030, mobile’s contribution will reach approximately $210 billion in SSA, driven mostly by improvements in productivity and efficiency brought about by the increased take-up of mobile services.

Besides, the telecoms body said mobile operators and the wider ecosystem provided direct employment to around 1.4 million people across the region. In addition, it said the economic activity in the ecosystem generated more than two million jobs in other sectors, meaning that around 3.5 million jobs were directly or indirectly supported.

Recall that in 2022, the Foreign Direct Investment (FDI) into Nigeria’s telecoms sector, though dropped by 47 per cent, was $399.9 million. The sector’s contribution to the GDP in Nigeria increased from 12.61 per cent in the fourth quarter of 2021 to 13.55 per cent in the fourth quarter of 2022.

Meanwhile, GSMA said as of 2022, around 15 per cent of the population in the region is not covered by mobile broadband networks. It said despite much progress, the coverage gap remained significant, especially in rural and remote areas.

According to it, the lack of mobile broadband coverage in rural areas is primarily an economic challenge, which include: costs can be prohibitive, revenues are lower and logistics are more complex. It said this has led operators to explore new infrastructure models through collaborations, such as MTN Uganda’s turnkey solution with iSAT Africa under the GSMA Innovation Fund for Rural Connectivity. As part of the partnership, iSAT deployed five mobile network sites in rural areas of Uganda using concrete-less towers, solar power and an open radio access network (RAN) to provide 2G and 3G connectivity.

GSMA said such initiatives offer operators an opportunity to expand into uncovered areas while sharing the cost of infrastructure development, and the related responsibilities, and to utilise available resources.

The body revealed that operators and infrastructure companies have also announced renewed commitments to improving connectivity in SSA.

“For example, Vodacom plans to invest $3.3 billion to upgrade network resilience, maintain connectivity and boost rural coverage in South Africa over the next five years (an increase of 20 per cent on what it committed to in its last five-year plan in 2018). Meanwhile, Africa Mobile Networks revealed it has secured a $20 million loan package to build new base stations in rural areas,” it stated.

GSMA said mobile operators have been innovating business models and improving coverage; however, the usage gap remains sizable. It stressed that more than half of the population in the region do not utilise mobile Internet despite living in an area with mobile Internet coverage.

According to it, the mobile industry has been taking steps to tackle the key issues restricting usage – specifically, lack of device affordability, digital skills and relevance, and safety concerns.

“This highlights the need for robust initiatives to improve coverage and for mobile adoption to close the digital divide,” GSMA stated.