Nigeria’s digital odyssey: 64 years of transformation amid persistent turbulence

Joy Agwunobi

As Nigeria marks its 64th anniversary of independence, the country’s journey through digital transformation has been a key part of its development. Over the years, Nigeria has gone from limited access to communication technologies to widespread mobile connectivity, fintech, and digital innovation, resulting in a rapid modernisation and growth in the country.

In a clear demonstration of Nigeria’s growing dominance in the digital sphere, the nation’s digital economy contributed 19.78 percent to the country’s gross domestic product (GDP) in the second quarter of 2024, according to the National Bureau of Statistics (NBS), reflecting Nigeria’s emergence as a driving force in Africa’s technology revolution.

In the early years of independence, the telecommunications sector in Nigeria was a vastly different landscape, with just 18,724 telephone lines catering to a population of 40 million. Dominated by Nigerian Telecommunications Limited(NITEL) and a handful of Code Division Multiple Access (CDMA) operators, telephony was a privilege reserved for the rich and influential. Fast forward to 2001, and the situation had slightly improved, but the sector still lagged far behind, with just 400,000 phone lines serving a nation in desperate need of modern communication channels.

The landscape changed dramatically with the establishment of the Nigerian Communications Commission (NCC), which deregulated the telecom industry and opened the market to private players. Moreso, the advent of Global System for Mobile Communication (GSM) technology democratised access to telecommunications services, allowing millions of Nigerians to own mobile phones for the first time.

As reported by the NCC, the introduction of GSM technology “democratised access to telecommunication services,” breaking down the barriers of exclusivity.

The period between 2001 and 2006 was transformative for the Nigerian telecom sector, as the number of telephone lines skyrocketed from a mere 400,000 to over 10 million in just five years. This growth marked a tipping point in the country’s telecommunications landscape, as mobile phones began to reach the masses, no longer a luxury reserved for the wealthy.

This revolution in connectivity unleashed a wave of economic growth and opened new business opportunities, while also enabling Nigerians to communicate freely, regardless of location.

The widespread adoption of mobile devices in Nigeria paved the way for a profound transformation, spanning various industries and sectors. The catalytic effect of mobile communication on financial services, healthcare, agriculture, and education is evident in the emergence of mobile payment platforms, such as Flutterwave, Opay,  Palmpay and many others which revolutionised financial services and expanded financial inclusion.

Thus, mobile devices and fintech platforms, which have become ubiquitous in the country, acted as gateways to digital transformation and socioeconomic progress, bringing connectivity, information, and opportunities to countless Nigerians, providing them with access to the digital world, where otherwise they might have been excluded.

The NCC has been a key player in the nation’s telecommunications revolution, providing a regulatory environment that supports private investment and innovation. Among the NCC’s many achievements, one of the most significant has been the expansion of network coverage to previously underserved areas, helping to reduce the digital divide between urban and rural communities.

The NCC’s licensing and spectrum management initiatives have also been instrumental in the rollout of 4G and 5G networks, bringing the country closer to the cutting-edge of global telecommunications.

Furthermore, the Commission, in June 2024, disclosed that it had successfully localised the production of all SIM cards used in Nigeria. This achievement is credited to the commission’s relentless efforts and the work of the Nigeria Office for Developing the Indigenous Telecom Sector (NORDIT), which aims to promote local content and indigenous participation in the telecommunications industry.

It is expected that the development will have a positive impact on Nigeria’s economy and technological capabilities, leading to further growth and development in the industry.

Babagana Digima, head of new media and information security at the NCC,who made the disclosure during a training session for media executives,noted that until recently, almost all SIM cards in Nigeria were imported, with 99 to 100 percent of them being brought in from outside the country. However, Digima noted that NORDIT’s intervention has successfully reversed this trend, with all SIM cards now being manufactured locally.

Despite the remarkable progress that the telecom sector has made in recent years, the sector’s journey has not been without its fair share of challenges. The rapid growth and liberalization have been hindered by a variety of challenges, including regulatory obstacles, subpar service quality, high operating costs, excessive taxation, and Right of Way issues.

The industry is also grappling with issues such as insufficient power supply, vandalism, and rising insecurity, further compounded by the increasing reliance on digital services, which has opened the sector up to an onslaught of cyberattacks, fraud, and data breaches.

Amidst the myriad of challenges that the telecom industry is currently facing, one of the most pressing concerns is the skyrocketing operational costs. The volatile exchange rates, attacks on telecom infrastructure, and the sharp increase in fuel prices are all contributing factors that place significant strain on the sector’s ability to sustainably offer affordable services.

Karl Toriola, CEO of MTN Nigeria, highlighted the severity of the current telecom situation recently, pointing out that the government’s refusal to approve a tariff increase is placing telecom companies under immense pressure amid rising inflation.

Toriola, in a presentation at the telecom investment forum organised by Financial Derivatives Company (FDC) in August 2024,  described the industry’s condition as being in an “intensive care unit,” stressing that a price adjustment is not just desirable but crucial for its survival.

“In this inflationary environment and with forex devaluation, it’s impossible for any industry to maintain the same pricing for 11 years,” Toriola said.

Adding to the industry’s struggles is the increasing frequency of fibre optic cuts, which are causing widespread internet disruptions for businesses and consumers alike. This issue is not only a technical challenge but also a significant financial burden.

According to a NCC report, telecom companies spent around N14 billion to repair nearly 59,000 fibre cuts between 2022 and 2023, with an estimated 40 incidents of fibre cuts reported daily in 2022 alone.

Carl Cruz, CEO of Airtel Nigeria, further emphasised the gravity of the situation, revealing that Airtel experiences over 1,000 fibre cuts monthly.

“These disruptions not only impair services but drive up operational costs, ultimately impacting the quality of service for millions of Nigerians,” he stated at the FDC telecom investment forum.

The Airtel Nigeria CEO stressed that without greater investment in telecom infrastructure, the industry’s future and, by extension, the entire country, could be at risk.

Cruz warned that unless infrastructure investments are ramped up, the country as a whole could face serious consequences.

“If we don’t invest in growing capacity, it won’t just be the companies that suffer—Nigeria’s economy and its people will also bear the brunt,” he stated.

Amid the financial pressures caused by exorbitant diesel prices, telecom operators have been left with little choice but to explore renewable energy sources as an alternative to reduce costs.

However, the reality of the situation remains dire, with diesel prices reaching N1,426.09 per litre, according to the National Bureau of Statistics.

The magnitude of the industry’s fuel consumption is nothing short of immense, with telecom operators estimated to consume a 50 million litres of diesel each month to keep their infrastructure running.

On the 64th anniversary of Nigeria’s independence, the country’s telecommunications sector has proven its resiliency despite numerous obstacles. The remarkable strides made in mobile connectivity, broadband expansion, and indigenous technological development have established Nigeria as a leading digital powerhouse in Africa.

In pursuit of continuous progress, the NCC has been proactive in its engagement with international organisations and industry forums, ensuring that the Nigerian telecommunications sector remains a beacon of investment potential.

The drive to promote transparency and competitiveness in the market is considered a key aspect of the NCC’s strategic vision, which has manifested in the recent public inquiry held in May to revise and update existing regulatory guidelines.

According to Aminu Maida, the executive vice chairman of the NCC, the review aimed to provide a clear and transparent mechanism for resolving conflicts within the telecom sector, promoting timely resolution, and ensuring fair treatment for all stakeholders. He emphasised that the instruments considered during the inquiry were vital to ensuring the communications sector meets the demands of the digital age.

With a clear understanding of the pivotal role of broadband in driving economic growth and innovation, the NCC prioritised expanding broadband infrastructure as part of its strategic vision.

The National Broadband Plan (NBP) 2020-2025 serves as a blueprint for the commission’s efforts in achieving a significant increase in broadband penetration and coverage across the country. Various initiatives, such as infrastructure-sharing programmes, have been launched as part of this plan, with the ultimate aim of achieving 70 percent broadband penetration and 90 percent population coverage by 2025.

According to the commission, these targets are designed to attract investments necessary for supporting extensive infrastructure developments, including the deployment of fibre optic cables and the construction of new base stations.