Nigeria’s digital services have continued to thrive despite economic challenges, including reduced purchasing power, double-digit inflation, and high petrol prices.
The information and communication sector saw a 101.80% increase in VAT revenue from H1 2022 to H1 2024.
VAT, currently at 7.5 percent, is a consumption tax on services such as calls, SMS, and data. From H1 2022 to H1 2024, VAT revenue in the sector has increased from N127.03 billion to N256.34 billion, representing a 102 percent growth.
The information and communication sector, comprising telecommunications, information services, publishing, music and film production, and broadcasting, contributed N3.62 trillion to the Q2 2024 GDP, with telecommunications alone accounting for approximately 82.74 percent (N2.99 trillion) of this total.
Since 2019, the growing demand for internet services has been a key driver of telecoms growth. Adeolu Ogunbanjo, national president of the National Association of Telecoms Subscribers, highlighted this trend, noting that “more people are online.”
The World Bank, in 2023, credited the sector’s GDP growth to increased data usage.
“The information and communications technology sector, which did not contract even during the 2020 recession, expanded by 10.3 percent y-o-y due to increased consumption of data services by households and businesses and higher subscriber numbers,” it stated.
Karl Toriola, chief executive officer of MTN Nigeria, echoed this, noting that “A lot of people are shifting their consumption from traditional voice and circuit switch services to data services…”
Monthly internet usage has surged by 501.99 percent since 2019, largely driven by increased demand for streaming and other online services, mainly accessible through smartphones.
According to a report by GSMA, which protects the interests of mobile network operators worldwide, 85 percent of Nigerians who use mobile internet make or receive video calls, 75 percent watch free online videos, and 54 percent listen to free music online.
Data from the Nigerian Communication Commission (NCC) reveal that monthly internet usage jumped from 125,149.86 terabytes (TB) in December 2019 to 753,388.77 TB by March 2024.
BusinessDay’s analysis shows that the monthly amount spent on internet access has risen to N216.59 billion in 2024, from N35.98 billion in the previous year, with the average price of 1GB at N287.5.
This increase in usage has also translated to benefits for GDP and government revenue. In Q2, 2024, the total VAT collected was N1.56 trillion, and the information and communication contributed a little above nine percent to it.
The National Bureau of Statistics (NBS) said, “The top three largest shares in Q2 2024 were manufacturing with 11.78 percent; information and communication with 9.02 percent; and Mining and quarrying with 8.79 percent.”
