Telecomms Sector Contributes N1.58trn To GDP In Q2

The Nigerian telecommunications sector contributed N1.580 trillion in real terms to the country’s gross domestic product (GDP) in the second quarter of 2016, or 9.8 per cent, which represents an increase of 1.0 per cent points relative to the previous quarter, according to the report released yesterday by the National Bureau of Statistics (NBS).


This is the largest contribution to the GDP made from this sector in the rebased period, which emphasises that growth in telecommunications has remained robust when compared to the total GDP. Due to differing seasonal patterns, the contribution from telecommunications is usually the largest in the second quarter.

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According to the data, the total number of subscribers has increased rapidly over the past decade. At the end of 2005, there were 19,519,154 subscribers, but by the end of 2015, there were 151,017,244, which is equivalent to an increase of 13,149,809 every year. However, growth has been declining more recently, possibly as a result of high market penetration, leaving less room for large expansion.

In June 2016 – the end of the second quarter – there were 149,803,714 subscribers compared with 148,775,410 in June 2015, which represents an increase of 0.69 per cent. The yearly increase in total subscriber numbers has been decreasing steadily for the past year; in June 2015, the year-on-year increase was 12.05 per cent.

However, after falling between January and April 2016, the number of subscribers began to increase again, and in June, the number was 0.71 per cent higher than at the end of the first quarter in March. This increase is despite a sharp drop in Core Division Multiple Access (CDMA) subscribers. Between June 2015 and June 2015, the number fell from 2,105,981 to 454,092, a decrease of 78.44 per cent.

Although CDMA remains the second most popular technology type, this decrease has meant that the GSM technology type has entrenched its position as the dominant provider of mobile subscriptions. Subscriber data is broken into four sections according to the technology type used.

The first two are for mobile technology; Global System for Mobile Communications (GSM) and CDMA, whilst the latter two are fixed lines, either wireless or wired. Mobile subscribers using GSM dominate, and accounted for 99.58 per cent of the total in June 2016, followed by CDMA with 0.30 per cent of the total. Fixed wired and wireless make up 0.08 per cent and 0.03 per cent, respectively.

In June 2016, the total number of GSM subscribers was 149,179,083, an increase of 2,692,267, or 1.84 per cent relative to June 2015. In both percentage and absolute terms, the year-on-year increase in GSM subscriber numbers have been falling steadily over the past 12 months. In March 2016, the year-on-year growth rate was 4.06 per cent, and in June 2015, the rate was 12.22 per cent.

MTN subscribers rose from 57,045,721 to 58,409,767 between March and June 2016, while Etisalat subscribers rose from 21,877,542 to 22,469,896 over the same period. Airtel ended the quarter with 31,978,848 subscribers while Globacom had 36,320,572 subscribers.

Also, the NBS has said that Nigeria’s total value of merchandised trade for Q2, 2016, stood at N3,942.0 billion. This is 49.0 per cent more than the value of N2,645.5 billion recorded in the preceding quarter.

According to its Foreign Trade Statistic Report for the Q2 of 2016, released yesterday, the development is due to a rise of N725.6 billion, or 63.3 per cent, in the value of exports (largely due to exchange rate gains), combined with a rise of N570.8 billion, or 38.1 per cent, in the value of imports against the levels recorded in the preceding quarter.

This development they said “brought the country’s negative trade balance to -N196.5 billion during the period under review,” and shows a N154.8 billion reduction in the country’s trade deficit over the previous quarter.

Decline in the value of the naira led to an increase in importation, standing at N2,069.2 billion at the end of Q2, 2016, an increase of  38.1 per cent  from  the  value  of N1,498.4  billion  recorded  in  the  preceding  quarter.

“Import trade by section was dominated by the imports of “boilers, machinery and appliances – parts thereof” which accounted for 34.9 per cent of the total value of import trade in Q2, 2016.

“Other commodities which contributed noticeably to the value of import trade during the review period were “mineral products”  (15.8 per cent), “vehicles, aircraft and parts thereof; vessels etc”(14.7 per cent), “Products of the chemical and allied industries” (7.6per cent) and “Base metals and articles of base metals” (5.1per cent),” it added.

On export, the report showed that there was an improvement to the value of N1,872.7 billion in Q2, 2016; an increase of N725.6 billion or 63.3 per cent, over the value recorded in the preceding quarter.

This improvement was however triggered largely due to the depreciation in the value of the naira.

“The structure of the export trade is still dominated by crude oil exports, which contributed N1,493.2 billion, or 79.7 per cent, to the value of total domestic export trade in 2016.”

Exports by sections revealed that Nigeria exported mainly mineral products which accounted for N1,735.2 billion, or 92.7 per cent of the total export value. Other products exported by Nigeria include “animal and vegetable fats and oils and other cleavage prod.” at N55.7 billion, or 3.0 per cent, “base metals and articles of base metals” at N28.4 billion, or 1.5 per cent, and “prepared foodstuff; beverages, spirits and vinegar; tobacco” at N16.2 billion or 0.9 per cent.

Nigeria’s import trade by direction showed that the country imported goods mostly from China (N493.5 billion), Netherlands (N285.7 billion), United States (N199.0 billion), India (N124.9) and the United Kingdom (N119.3 billion) during the quarter. It exported goods mainly to India (N402.7 billion), United States (N235.0 billion), Spain (N215.2 billion), Netherlands (N133.3 billion) and South Africa (N119.9 billion).



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