Verifying Nigeria ICT head’s claims about sector’s contribution to Nigeria’s economy before and during president Buhari’s term

The outsized influence of fossil fuels in Nigeria’s economy continues to be debated. Is the ICT sector changing this? 

According to the reporting in the Daily Post, Abdullahi said that ICT now contributes more to Nigeria’s gross domestic product than oil and gas.

A country’s gross domestic product or GDP is the measure of the size of its economy. It is the market value of all goods and services produced in a country in a given period, usually a year. Any economic activity will increase GDP - as long as the activity is recorded. 

Nominal GDP includes inflation, the increase in prices of goods and services over time, while real GDP presents economic growth with inflation removed. According to the  International Monetary Fund, real GDP figures “allow us to see whether the value of output has gone up because more is being produced or simply because prices have increased”.

What does the data show?

Nigeria’s bureau of statistics publishes quarterly GDP figures. Its definition of the ICT sector includes telecommunications and information services, publishing, motion picture, sound recording and music production and broadcasting.

The agency’s most recent GDP data covers the fourth quarter of 2021. In that period, ICT contributed 15.2% to real GDP. In the previous quarter, the share was 14.2%.

Oil and gas in turn contributed 5.19% and 7.49% to gross domestic product respectively.

Why oil and gas still contribute more to revenue 

Though the oil and gas sector contributes less to gross domestic product than ICT, the petroleum sector has contributed significantly more to government revenue over the years than any other sector.  

This is because the government’s focus has been on oil sales, with other sectors such as ICT poorly captured, Abubakar Abdullahi, an economics professor at Usmanu Danfodiyo University in Sokoto, north-west Nigeria told Africa Check.

“The higher contribution to GDP in the ICT sector simply means there are more economic activities in the sector. It does not directly translate to government revenue. Transactions in the ICT sector are usually small and informal. They are difficult to document and tax. So the Nigerian government is not earning from ICT as much as it ought to.” 

“For the oil and gas sector, it is easy to document sales of crude oil. It’s our major export. It is also easy to tax the firms in the sector,” Abdullahi said.

The most recent GDP figures from the statistics office cover October to December 2021. They show that the ICT sector’s contribution to real GDP was 15.21%. 

It seems Abdullahi had referred to the sector’s contribution in the second quarter, April to June 2021, which was 17.92%. 

The increase in ICT’s contribution to Nigeria’s economy is due to the global rise in digital technology, Sheriffdeen Tella, a professor of economics at the Olabisi Onabanjo University, Ago-Iwoye, south-west Nigeria told Africa Check.

“Nigeria’s ICT sector has been growing significantly in the past two decades. The use of mobile phones to access the internet and perform many tasks is on the increase globally, not just in Nigeria. But that is the main driver of the growth in the country’s ICT sector,” he said. 

Pandemic accelerated sector’s growth

Both Njiforti and Tella said that expansion in Nigeria’s ICT sector is part of the impact of the Covid-19 pandemic.

“The Covid-19 pandemic has accelerated the growth in the ICT sector. Due to restrictions on movement and gathering, people resorted to virtual communication and transactions,” Tella said. 

“In fact, I believe the contribution of ICT to Nigeria’s GDP is underestimated. Apart from the direct contribution of the sector, there are indirect contributions such as trade facilitation. Virtually every other sector uses ICT."

The Daily Post reported Abdullahi as saying that before president Buhari’s administration, “ICT was contributing less than 5% GDP, today ICT is contributing 17.93% GDP.” 

However, an assistant corporate affairs director at the agency, Abdul Qadir Apaokagi, told Africa Check that his boss was misquoted. 

“What the director general said was that ICT contributed less than 0.5% to the GDP before the creation of Nitda. 

Apaokagi said statistics to this effect were in the public domain, including online and from the National Bureau of Statistics.   

Newspaper ‘corrected the misquote’

He added that the newspaper had conceded making an error after Nitda contacted it. “They have immediately corrected the misquote in the same story using the same link. We, indeed, have you to thank for calling our attention to such misquotes which are capable of [causing] misinformation,” Apaokagi said.

Africa Check confirmed the quote was edited and replaced with Nitda’s version. The original version can be read here.    

Experts advised we work with real GDP to evaluate this claim. Buhari took office in May 2015. ICT’s contribution to GDP ranged from 10.89% in the first quarter of 2014 to 11.47% in the first three months of 2015.

(Note: Nigeria rebased its GDP in 2013 to become the largest economy in Africa). 

The newspaper’s original claim is therefore inaccurate.

What of the agency’s updated claim? Nitda was created in April 2001.

Going by the article’s correction, Abdullahi claimed ICT’s contribution to Nigeria’s GDP was less than 0.5% before 2001.   

Economic data on the statistics bureau’s website does not include GDP figures older than 2011. Dr Baba Madu, who heads the national accounts division at the agency, provided us with this data from the agency’s archive.  

The data shows that ICT contributed nearly 2% to Nigeria’s GDP in 1999 and 2000. In 2001, when the GSM - Global System for Communication - standard for mobile communications was introduced in Nigeria, the sector contributed over 3%.

The ICT sector has been expanding since the late 1990s. After the telecommunication sector was liberalised in the early 2000s, it grew in leaps and bounds due to the resulting competition. This is according to Peter Njiforti, professor of economics at the Ahmadu Bello University, Zaria in north-west Nigeria. 

“The ICT sector is still growing. Nigeria’s huge population makes it a country with great potential in ICT. For instance, there could be over 100 million people using mobile phones in Nigeria. That gives you an idea of how big the sector is,” Njiforti told Africa Check.