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Digital economy and financial inclusion call for Nigeria’s policy reform

12 July 2022

Digital and financial inclusion for more underserved people in Nigeria may be subject to regulation and policy reform, as a new report from GSMA outlines the need of modernizing legislative framework of the country’s mobile market. Analysts expect that such a change will accelerate penetration of smartphones, Internet access for more people and hence the development of advanced digital services, such as handset loans, fintech services and micro/nano loans.  According to the report “Spotlight on Nigeria: Delivering a Digital Future” “the challenge for both government and the mobile sector is to ensure that as many as possible continue to benefit from mobile connectivity, enabling digital lifestyles and facilitating economic development”.

Mobile ecosystem is already a significant contributor to country’s economy, as it represents 5.5{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} of the country’s total GDP, reaching 21 billion dollars during 2017. Furthermore, it has resulted in the creation of nearly 500,000 direct and indirect jobs.

“Mobile connectivity has opened the door to new digital possibilities and powered the country’s economic development” commented Akinwale Goodluck, Head of Sub-Saharan Africa, GSMA, during a recent event held by the association in conjunction with the Nigerian Communications Commission.

Some other key findings of the report are:

  • 97,5 million unique mobile subscribers (September 2018)
  • 151 million total connections
  • 49{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} mobile penetration
  • 53 million smartphone connections

A direct and positive impact on the daily lives of Nigerians

According to Μr Goodluck, “mobile connectivity has already improved the welfare of millions of Nigerians”. This is the result of the growing adoption of digital services by government, businesses and consumers.

What’s more important is that mobile connects more Nigerians to the Internet than any other technology. For the majority of Nigerians, mobile broadband is the first and only technology for accessing the internet, enabling better access to health, education and commercial opportunities, amongst other public services. Smartphone adoption has already risen to over 53 million connections, and 49{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} of the population are currently connected by mobile technology, compared to less than 1{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} who have a fixed-line connection. On the other hand, 44{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} of mobile subscribers are using 3G technology and only 4{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} are using 4G, which shows us that the country lags regional peers in 4G adoption. For example, in Angola 4G penetration is 16{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}, while in South Africa is 18{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}.

According to GSMA, Nigeria’s greater potential will come through increased spectrum harmonization and licensing reform. Analysts estimate that if these reforms are applied we will see a massive adoption of mobile broadband and smartphones. They expect an annual growth rate of 36{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}, raising smartphone connections to 144 million by 2025. As a result, more advanced services will be enabled and bigger societal impacts will be created.

“The next generation of mobile technology offers huge potential ushering in an era of lightning-fast mobile connectivity and new digital possibilities. It is important, therefore, that Nigeria takes full advantage, fostering inclusive growth and enhancing the productivity and efficiency of the economy” concludes GSMA’s report, calling for government’s and mobile sector’s cooperation. “If policies don’t keep pace with the needs of society and technological innovation, there is a risk that citizens will be left behind and productivity and competitiveness will suffer” said Mr Akinwale Goodluck.