Nigeria's ICT push to facilitate digitalisation across the board

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Nigeria is one of Africa’s largest ICT markets in terms of its share of telecoms subscribers and internet users, according to the US International Trade Administration. The ICT sector is a critical driver of non-oil growth and a significant contributor to the country’s GDP. Furthermore, it is an enabler for digitalisation and the development of other key sectors such as health care, education, agriculture and manufacturing. The government has prioritised the expansion of ICT through dedicated policies, infrastructure development and investment promotion, which have helped boost the sector’s contribution to GDP from less than 1% in 2001 to 15.1% by 2020.

Given its role facilitating business continuity amid the Covid-19 pandemic, ICT will remain a priority in the years ahead. The country’s longer-term goal to develop a digital economy is supported by its large, youthful population and the rapid adoption of mobile internet, yet it will be necessary to deepen broadband penetration, particularly in rural communities. Towards that end, in 2020 the government launched strategies aimed at boosting access to high-speed internet, removing barriers to infrastructure development and strengthening cybersecurity.


In 2000 the federal government liberalised the sector and launched the National Telecommunications Policy, which was brought into legal force in 2003 through the Nigerian Communications Act. Under the legislation the Nigerian Communications Commission (NCC) became the telecoms sector’s independent regulatory authority, and is charged with responsibilities such as facilitating the entry of private providers into the market, creating an enabling regulatory environment, promoting fair competition and market efficiency, and setting up the Universal Service Provision Fund to support the expansion of telecoms services in rural communities.

In 2001 the National Information Technology Policy was rolled out as a blueprint for ICT development, and in 2007 the National Information Technology Development Agency (NITDA) was established to oversee policy implementation. A decade later the Ministry of Communication Technology was formed to monitor government entities active in the sector, including the NCC, the NITDA and the Nigeria Postal Service. In 2019 the ministry was renamed the Ministry of Communications and Digital Economy, reflecting the importance of digital technologies and telecoms for Nigeria’s economic development.


In November 2019 the government launched the National Digital Economy Policy and Strategy 2020-30, which aims to leverage digital technologies to diversify the economy away from its traditional dependence on oil and gas. The strategy is based on the Ministry of Communications and Digital Economy’s eight pillars for the acceleration of the Nigerian economy: developmental regulation, digital literacy and skills, solid infrastructure, service infrastructure, digital service development and promotion, soft infrastructure, digital society and emerging technologies, and indigenous content development and adoption. Among its objectives is to reach a broadband penetration rate of 70% within the strategy’s first four years.

To help achieve this target, in March 2020 the NCC rolled out the National Broadband Plan (NBP) 2020-25. It seeks to deliver data at a minimum download speed of 25 Mbps in urban areas and 10 Mbps in rural areas, and provide effective and affordable coverage to at least 90% of the population by 2025. As of January 2021 the average download speed of mobile internet connections was 18.4 Mbps, up 20.1% year-on-year. As part of the NBP 2020-25, the government is seeking private sector partners to expand last-mile access. Furthermore, the NCC granted licences to telecoms service providers MainOne Cable Company, IHS, Zinox Technology, BCN and Brinks Integrated Solutions to provide infrastructure to bolster broadband penetration, especially in the more remote parts of Nigeria.

Nigeria’s push to increase engagement in the digital landscape has resulted in the need for enhanced cybersecurity. In February 2021 the federal government launched the National Cybersecurity Policy and Strategy 2021. The framework seeks to mitigate cyberthreats to government systems and wider digital networks, boost Nigeria’s readiness for global cybersecurity partnerships and enhance technology development, among other goals.

Market Structure

The telecoms market is dominated by four mobile operators, namely MTN Nigeria, which is a subsidiary of South Africa’s MTN; Airtel Nigeria, a subsidiary of Indian telecoms conglomerate Bharti Airtel; and Nigeria’s Globacom and 9mobile. As of the third quarter of 2020 MTN Nigeria accounted for 40.3% of the active voice subscription market. Airtel Nigeria’s quarter-on-quarter growth of 5.3% saw its market share reach 27% to eclipse the 26.5% captured by Globacom. 9mobile, meanwhile, held fourth position by a significant margin, with a market share of 6.2%. The order of operators remained the same for active internet subscriptions: MTN Nigeria in first place with market share of 42.6%, followed by Airtel Nigeria with 26.6%, Globacom with 25.9% and 9mobile with 4.9%. As of February 2021 MTN Nigeria captured a 39.5% share of the overall telephony market, followed by Globacom with 27.7%, Airtel Nigeria with 26.3% and 9mobile with 6.5%.


ICT drove much of non-oil growth in 2020. Its contribution to GDP in real terms expanded from 14% in 2019 to 15.1%, second only to agriculture at 26.2%, according to the National Bureau of Statistics (NBS). Similarly, the sector’s growth of 12.9% in 2020 outpaced that of 2018 and 2019, when it expanded by 9.7% and 11.1%, respectively. Among the four ICT subsectors identified by the NBS, telecoms and information services is the largest, contributing N8.5trn ($22.7bn) to GDP in 2020, up from N7.4trn ($19.8bn) in 2019. The subsector grew by 15.9% in 2020, up from 11.3% in 2018 and 11.4% in 2019.

According to the report “Telecoms Data: Active Voice and Internet per State, Porting and Tariff Information” by the NBS covering the second and third quarters of 2020, there were 196.2m and 205.3m active voice subscribers, respectively, compared to 189.3m in the first quarter of that year, out of a population of 208.8m. Meanwhile, the number of active internet subscribers grew from 136.2m in the first quarter of 2020 to 143.6m in the second quarter and 151.5m in the third quarter.

Full-year data from the NCC showed that the number of telephony subscriptions increased from 184.7m in 2019 to 204.5m in 2020, with teledensity improving from 96.8% to 107.1%. However, the number of telephony subscriptions fell from 204.5m in December 2020 to 200.2m in January 2021 to represent a teledensity of 104.9%. The active internet subscriber base also dropped by 2%, from 154.9m to 151.3m. Similarly, broadband penetration fell from 45% to 42.9% – equal to 81.9m broadband subscriptions – and the number of mobile internet users fell from 153m to 150m over the same period. Some observers attributed the drop in subscriptions to the impact of the Covid-19 pandemic, which disrupted economic activity across sectors and led to the widespread loss of income.

Sim Registration

The decline in mobile internet subscriptions could also be partly attributed to a new SIM card registration policy introduced at the end of 2020. In December of that year the NCC ordered mobile operators to deactivate unregistered SIM cards not linked to a unique national identification number (NIN) within a two-week period in a bid to crack down on criminal activity organised via unregistered devices. The deadline for compliance was extended from December 30, 2020 to February 2021, and then to April 2021 due to complaints from consumers about difficulties in obtaining their NIN. In late March of that year a federal court extended the deadline to May. The NCC mandated that telecoms providers pause new SIM card sales until existing numbers are registered, but in April the ban was lifted. According to the regulator, as of February 2021 some 56m NINs had been collected by mobile operators, leaving roughly 150m SIM cards still to be registered. This is a significant challenge, one made more difficult by the fact that not every Nigerian has a NIN. According to the National Identity Management Commission, as of 2020 only 38% of Nigerians held any form of identification.

Network Readiness

While the long-term trend is that more Nigerians are slowly adopting broadband internet, many still use earlier generations of technology when it comes to mobile internet connectivity. As of mid-June 2020 around 112m Nigerians were using 2G services, compared to the 76m subscribed to either 3G and 4G. Mobile internet speeds are set to rise dramatically with the deployment of the 5G network, which will improve the way Nigerians learn and work, and facilitate economic development. In late February 2021 Isah Ali Ibrahim Pantami, the minister of communications and digital economy, announced that Nigeria was ready to deploy 5G, pending the resolution of issues such as network vulnerabilities.

Another hurdle is the lack of adequate infrastructure, in large part due to high right-of-way (RoW) charges implemented by several state governments. To help remove this barrier to development, in August 2020 the federal government waived charges for laying fibre-optic cables on national highways until the end of 2022, which is expected to encourage internet providers to invest in infrastructure and thereby expand access. Prior to that, in mid-May 2020 Ekiti became the first state to lower its RoW charge, from N4500 ($12.02) per metre to N145 ($0.39). Kwara State followed, slashing its RoW fee from N5500 ($14.69) per metre to N1 ($0.01), while Anambra and Kaduna removed RoW charges entirely. As of June 2020, however, only seven out of 36 states had complied with the federal government’s 2017 policy to harmonise RoW charges.

An agreement proposed by two providers in 2021 could also help address the lack of infrastructure. In February of that year international media reported that MTN Nigeria and 9mobile plan to seek permission to enter into a network-sharing agreement, following the success of a pilot scheme in Ondo State. If approved, the agreement would help save resources that would otherwise be spent on additional infrastructure, including fibre-optic cables.

Start-up Economy

Nigeria dominates the start-up scene in West Africa, supported by the evolving internet ecosystem and large, youthful population. According to the “West African Start-up Decade Report 2010-19” by technology company Techpoint Africa, Nigeria accounted for 86.3% of the $1.8bn raised by 51 start-ups in the region between 2010 and 2019. More than half of the country’s start-ups operate in financial technology, given the significant potential to cater for an underserved population (see analysis).

In 2020 the country accounted for more than 17% of approximately $1bn in funds raised by start-ups across Africa, according to Startuplist Africa. The $170m raised was second only to Kenya, where startups raised $194m. Moreover, Nigeria remains Africa’s top investment destination in terms of the number of deals, registering 46 in 2020. Much of the finance flows come from abroad, while local participation is muted. In 2020 roughly 70% of funding into Nigerian start-ups came from foreign investors.

The government has supported the start-up ecosystem by partnering with the private sector to establish incubators, youth programmes and science technology parks. For example, the authorities have partnered with local start-up accelerator iDEA and the Co-Creation Hub in Lagos, which attracted foreign investors such as Silicon Valley’s Y Combinator and New York-headquartered Andela. The latter created an incubation centre in Lagos aimed at training Nigerians how to code. In 2018 social media giant Facebook launched NG_Hub in Lagos to foster collaboration and innovation among Nigerian startups. “The entrepreneurship ecosystem is changing,” Hauwa Yabani, managing director of Abuja Technology Village, told OBG. “Platforms such as incubators, accelerators and angel networks are contributing to reforms that are repositioning local start-ups to scale up, with access to training, mentorships and capital.”


The ICT sector is set to grow in 2021, even as other areas of the economy remain constrained by the pandemic. Its performance is expected to be supported by the waived fees for laying fibre-optic cables. Indeed, the government has made progress on removing several barriers faced by telecoms providers and created opportunities for the private sector as it works to boost broadband penetration across the country. In addition to improving the ecosystem for entrepreneurs, infrastructure development and the future deployment of 5G will be crucial to Nigeria reaching its goal of fostering a digital economy.

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The Report: Nigeria 2022

ICT chapter from The Report: Nigeria 2022

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