In Nigeria and other sub-Saharan African countries, the mobile subsector contributed $170 billion to the GDP of the region in 2022.
This is true even though the subsector raised around $20 billion in taxes, which went toward helping to finance the public sector. Services, VAT, sales taxes, and excise duties made up a significant portion of the contribution, totaling $10 billion. Corporate profits taxes came in second, with $5 billion.
In its “2023 Mobile Economy Report for Sub-Saharan Africa,” the Global System for Mobile Telecommunications Association (GSMA) disclosed that in 2022, mobile technologies and services contributed approximately $170 billion in economic value added, or 8.1% of the GDP in Sub-Saharan Africa (SSA).
It revealed that productivity effects of $110 billion yielded the largest benefits, with mobile carriers coming in second with $40 billion. The Global Trade Association for Telecommunications Businesses, GSMA, predicted that by 2030, mobile will contribute roughly $210 billion to SSA, largely because of greater productivity and efficiency from the use of mobile services.
Additionally, the telecoms authority stated that approximately 1.4 million individuals in the region were directly employed by mobile providers and the larger ecosystem. Furthermore, it stated that over two million jobs were created by the ecosystem’s economic activity in other industries, supporting an additional 3.5 million jobs either directly or indirectly.
Remember that in 2022, foreign direct investment (FDI) totaled $399.9 million in Nigeria’s telecom industry, despite a 47% decline. From 12.61 percent in the fourth quarter of 2021 to 13.55 percent in the fourth quarter of 2022, the sector’s share of Nigeria’s GDP rose.
As of 2022, approximately 15% of the population in the region lacks access to mobile broadband networks, according to GSMA. It stated that even with great advancements, there was still a sizable coverage gap, particularly in rural and distant places.
It states that the main economic reason for rural areas’ lack of mobile internet service is their lower revenue, more complicated logistics, and potentially prohibitive prices.
According to the report, this has prompted operators to investigate novel infrastructure models through partnerships. One example is MTN Uganda’s turnkey solution, which it developed with iSAT Africa under the GSMA Innovation Fund for Rural Connectivity.
In order to provide 2G and 3G connection, iSAT installed five mobile network sites as part of the cooperation in rural Uganda using concrete-less towers, solar power, and an open radio access network (RAN).
According to GSMA, these kinds of initiatives give operators a chance to grow into untapped markets while splitting the expenses and associated duties of developing new infrastructure and making use of existing resources. The organization disclosed that infrastructure providers and operators have also made fresh promises to enhance connectivity in Sub-Saharan Africa.
For instance, Vodacom intends to spend $3.3 billion over the next five years to improve network resilience, sustain connection, and expand rural coverage in South Africa (a 20 percent increase over its last five-year strategy, which was announced in 2018). A $20 million loan package has been obtained by Africa Mobile Networks to construct additional base stations in rural areas, the statement said.
The GSMA stated that although mobile operators have been enhancing coverage and developing new business models, there is still a significant usage disparity. It emphasized that even if they reside in an area with mobile Internet service, over half of the people in the region do not use mobile technology.
It claims that the mobile sector has been making efforts to address the main problems limiting usage, which include safety concerns, a shortage of affordable devices, and a lack of digital skills and relevance.
“To close the digital divide, this highlights the need for robust initiatives to improve coverage and for mobile adoption,” the GSMA said.
