The usual line about Nigeria being a mono-product economy is probably so frequently used in conversations and speeches that many Nigerians do not even understand what it means. While it is true that a lot of what the country gets out of its exports comes from the sale of its petroleum products abroad, agriculture has always contributed the greatest share of all the sectors of Nigeria’s economy to the nation’s Gross Domestic Product (GDP). Other sectors have grown in prominence too. But oil is important. Much of Nigeria’s foreign exchange comes from oil exports, and the Federal Government gets over 70 percent of its revenue from that sector. As we have seen in recent times, when the oil sector sneezes, the nation’s economy catches a cold.
Latest trends, however, show that there is another player on the block, one that threatens to displace oil as the third largest contributor to Nigeria’s GDP. That sector is ICT.
Nigeria’s Information and Communication Technology sector comprises of four activities of telecommunications and information services: publishing, motion pictures, sound recordings and music production, and broadcasting. The contribution of this sector to the country’s GDP has risen sharply from a meagre 0.5 percent in 2001 to nearly 11 percent in 2015. Telecommunications has led the way in this growth spurt, with network providers expanding their reach and customer base at an astounding rate. The rebasing of the GDP in 2014 made it possible to capture the increasing role being played by ICT in Nigeria’s economy.
Data released by the National Bureau of Statistics reveals something that may be an indicator of what the nation’s economy may look like in coming decades. The big surprise in the quarterly GDP report released by the NBS is not easily noticed. But when we compare the contribution of the oil and gas sector to Nigeria’s GDP (10.29 percent) to the input from ICT (11.98) for the first sector of 2016, we get the impression that a toppling of great significance has taken place. Oil is losing ground to ICT, and it is doing so fast.
Nevertheless, these figures probably say more about the troubles which have beset Nigeria’s oil industry in the past few years, than they do of ICT taking over oil as the lubricant of the country’s economy. Nigeria’s oil production output has declined, and oil prices have fallen as well. If prices rebound and output increases, oil may retake its position.
Even if things become rosy for the oil industry again, projections for the next decade suggest that ICT will contribute a greater share to GDP. In 2015, Mr Peter Jack who was at that time the Director-General of the National Information Technology Development Agency said that ICT could contribute as much as 20 percent of the country’s GDP by 2020. This would almost certainly take the sector past oil and position it as one of the top three sectors of the economy.
There is still some way to go before the ICT sector reaches its true potential. But if Nigeria truly wants to diversify its revenue base, it will do well to properly harness and exploit the potentials of ICT.
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