This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/13/2019

Overview

Unit:   USD thousands

 

2016

2017

2018

 

 

 

 

2019 (estimated)

Total Market Size

100,175

100,255.14

108,725

 

 

 

 

0

Total Local Production

3,568

3,570.85

3,865

 

 

 

 

0

Total Exports

0

0

0

 

 

 

 

0

Total Imports

96,806

96,883.44

104,860

 

 

 

 

105,516

Imports from the U.S.

61,190

61,238.95

69,503

 

 

 

 

63,977

Exchange Rate:   1 USD

199

314

359

 

 

 

 

361


Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Total Local Production:   Nigeria Computer Society (NCS) and Lagos Computer Village
Total Imports:  National Bureau of Statistics website
Imports from U.S.: U.S. Census Bureau; Trading Economics

Data Sources:  
National Bureau of Statistics
United States Census Bureau
The World Factbook
Nigerian Communications Commission
BMI Research
Business News
This Daily Live
The Guardian
Technology times

Nigeria exited a protracted economic recession in 2017, though the country remains Africa’s largest ICT market with 82% of the continent’s telecoms subscribers, 29% of internet usage, and about 11.8% contribution to national GDP in 2018. The Nigerian Communications Commission estimates that the country has over 64 million subscriptions on broadband (penetration of 34%) and 173 million lines in the voice segment as of March 2019, representing 91% teledensity. The Federal Government of Nigeria recognizes ICT as the enabler for developing other critical sectors including agriculture and manufacturing.  Thus, in its drive to diversify the economy from oil and gas, the GOVERNMENT OF NIGERIA is encouraging partnerships between local ICT companies and multinational/foreign investors. To promote these partnerships and grow an entrepreneurial eco-system in the technology sector, the federal government has supported creating government or private sector led incubator hubs, youth innovation programs, and science technology parks.  Abuja Technology Village Science and Technology Park, which serves as an example, received the Abuja government support to become a destination for research, incubation, development, and commercialization of Information and Communications Technology.  Construction has now begun at the site, and the Government of Nigeria has granted Special Economic Zone status to Abuja Technology Village and other hubs to enable duty-free shipments and elimination of labor issues as a fiscal incentive to investors and entrepreneurs.  Prominent among the partnerships with the private sector are collaborations with local accelerators like iDEA (startup) and the Co-Creation Hub (CC-Hub) in Yaba, Lagos.  These initiatives have attracted foreign investors like the Silicon Valley-based Y Combinator who recently participated in pitches by Nigerian startups, and New York-based Andela which established an incubation center in Lagos to recruit and train talented Nigerians to code and subsequently hire them to foreign firms.  In mid-2016, Facebook invested $24 million in Andela through its Chan Zuckerberg Initiative, and was followed by the visit of Mark Zuckerberg, who also toured the CC-Hub in August during his African business tour.  In March 2017, a group of leading Silicon Valley venture capital seed fund accelerators, 500 Startups visited Nigeria – on the Geeks on a Plane program – to explore investment opportunities and engage with local ecosystem stakeholders in Nigeria’s ICT space. In July 2018, Nigeria’s Vice President, Prof. Yemi Osibanjo led a delegation of Nigerian entrepreneurs on a road show to the Silicon Valley. The VP addressed global industry leaders in San Francisco and Hollywood regarding Nigeria’s recently inaugurated Advisory Group on Technology and Creativity – an integral part of the National Industrial Policy & Competitiveness Advisory Council poised to project the investment opportunities and business potentials of the country.

To provide a level playing field for both local and foreign ICT companies, the federal government has established ongoing dialogue between the Office of Nigerian Content (ONC) and U.S. original equipment manufacturers/other suppliers on how to redefine and implement the “Guidelines for National Content” that is meant to stimulate local sector growth.  In addition, on May 16, 2017, the Senate President led the Nigeria ICT Policy Working Group to host the U.S. Chamber of Commerce Africa Business Center in a discussion of issues relative to streamlining policies for private sector, improving efficiency in governance through IP protection and enforcement, and reducing Nigeria’s ICT infrastructure deficit.  Moreover, the National Assembly is currently reviewing the draft Telecoms National Infrastructure Bill.  The focus of the bill is two-fold: to re-categorize telecoms equipment – including mobile base stations, fibre-optic cables and other industry assets – as critical infrastructure, similar to power stations and other high-value networks, as well as criminalize vandalization of telecoms infrastructure, which currently affects the quality of service.

In January 2016, the Federal Government announced the ICT Sector Roadmap (2016-2019), with the goal of addressing the key challenges plaguing the ICT sector and promoting President Buhari’s SMART Digital Nigeria Initiative.  According to the Minster of Communication, Adebayo Shittu, the focus of this policy document includes improving infrastructure and quality of service, promoting national broadband penetration and security, and supporting e-commerce.  The policy will also encourage continuity of private sector-led continuous innovation and capacity building.  In addition, the roadmap is intended to emphasize SMART Government that is “Social” (interactive with citizens), “Mobile” (adaptive to changing times), “Analytic” (knowledge-driven), “Radically Open” (accountable, transparent, encourages participatory governance), and “Trusting” (effective use of ICT to secure cities, critical national infrastructure, Telco infrastructure and other investments, and protect privacy).  As part of this effort to develop the ICT sector, the Government hosted a ‘Smart Cities Nigeria 2017 Summit’ with the aim to elicit interest and commitment of state governments and foreign investors to fast-track the digital transformation agenda in the country. 

In June 2016, the Nigerian Communications Commission (NCC) auctioned 2.6 GHz spectrum to MTN (with a 10-year radio spectrum license), which is expected to expand mobile broadband service from 67% to 90% 3G network population coverage and facilitate deployment of high-speed internet services in Nigeria.  The NCC is planning on eventual auctioning of 700MHz to 800 MHz lower band spectrum to improve 4G services outside of densely populated areas.  Further, the Nigeria Broadcasting Corporation (NBC) switched from analogue television to digital television broadcasting in 2017, which freed up additional spectrum for expansion of broadband infrastructure.

In June 2016, IHS acquired Helios Towers Limited’s (HTN) 1,212 diversified towers across Nigeria, and this increased IHS’ towers to 22,600 in 5 West African countries including Nigeria.  American Tower Corporation also closed a deal to purchase Airtel’s 4,800 cell towers to manage ICT infrastructure. According to the Nigerian Communications Commission (NCC) statistics, the four GSM network operators (MTN, GLO, Airtel, and Etisalat) had 30,176 base stations in 2014.  To facilitate broadband penetration and to improve the Quality of Service, Nigeria requires an additional 75,000 more base stations and last mile distribution within and around major cities.  In the meantime, the overall cell phone capacity in Nigeria is relatively high due to the number of high-capacity submarine cables landing on Nigeria’s coastline and backbone fiber optic cables connecting Lagos, Abuja and Port Harcourt, which the major telecom companies leverage to achieve a threshold of 101.45 tele-density.  However, due to limited base stations, the data market has a deficit of 98%, as broadband delivery to the “Last Mile” (last end user) is impeded with multiple fees and taxes charged by state and local governments, even though the country has 10 terabytes of internet bandwidth capacity provided by undersea cables from Glo 1, MainOne, and South Atlantic 3 (SAT 3).  In May 2019, the Nigerian Civil Aviation Authority announced plans to begin demolishing telecommunication masts across the country constructed without the required Aviation Height Clearance (AHC) approval.  There are currently over 8000 of such masts affected with most belonging to one of the major mobile operators.
As part of broadband expansion plan, the GOVERNMENT OF NIGERIA is exploring investment opportunities in the launch of a third backup satellite for NIGCOMSAT.  The federal government is also seeking private sector “infrastructure” partners in expanding last-mile access. To deepen broadband penetration across the country, the Nigerian Communications Commission (NCC) recently granted licenses to telecommunications infrastructure companies (infracos) to provide telecommunication broadband infrastructure across the various geo-political regions of the country and especially connect the rural populace with equitable access to telecom service.
The infracos include: MainOne Cable Company (Lagos zone); IHS Holding Limited (North Central and Abuja zone); Zinox Technology Ltd (southeast zone); BCN (Northwest zone) and Brinks Integrated Solutions Ltd (northeast zone).

Further, the GOVERNMENT OF NIGERIA has submitted the Nigeria Postal Commission Bill which would enable NIPOST to optimize its capacity by leveraging ICT to diversify service and bridge the digital divide in local communities.  A critical dimension of the three-year ICT Sector Roadmap is the implementation of national policies to promote national security and support e-commerce, reduce waste and improve efficiency in governance, block leakages (piracy and vandalism of infrastructure), protect intellectual property, and enforce mechanisms to promote creativity. The Nigerian Government had signed the cybercrime bill into law to prohibit and prosecute computer fraud and protect computer systems, networks and critical national information infrastructure. 

The Nigerian software market is far larger than the hardware industry and is estimated to be $10 billion annually due to broadband expansion.  The explosion of e-services and cloud computing has fueled the demand for data services and created the need for more reliable and high-quality broadband from service providers.  The enterprise application software (EAS) market is currently dominated by products from Asia and Europe, with some imports from the United States, but the market segment for high quality products remains largely unsaturated.  

In Nigeria, smart devices such as tablets, iPads, iPhones, notebooks and applications that support them, are in great demand.  Aside from serving as important business tools, they are cherished as important status symbols particularly by business executives, political, religious leaders and Nigerian youth, especially young graduates.
 

Leading Sub Sectors

Smart devices such as smartphones, tablets, laptops, point of sale and point of payment systems have a large and fast-growing market in Nigeria.  Demand will be generated as the Central Bank of Nigeria implements its cashless policy and electronic banking. 
The influence of social media and expansion of the cellular telecommunications infrastructure and services across the country have fueled the marketplace.
 

Web Resources

http://www.ncc.gov.ng
http://nitda.gov.ng/
http://www.commtech.gov.ng/
https://fmic.gov.ng/
http://www.nfvcb.gov.ng/
http://www.pmanonline.net/
https://www.pwc.com/ng/en/assets/pdf/the-business-of-entertainment-final.pdf
https://fmic.gov.ng/
http://www.nigerianstat.gov.ng/

For further sector information, e-mail: Ambrose Thomas, Commercial Specialist, U.S. Commercial Service, Lagos, Nigeria at: Ambrose.Thomas@trade.gov.
Ambrose plans to promote and/or lead delegations to:


Local Industry Events

  • Digital Africa 2019 Conference and Exhibition (June 25-27, 2019)

Shehu Musa Yar Adua Centre, F.C.T. Abuja, Nigeria,
https://www.digitalafrica.com.ng/
 

  • NigeriaCom Conference, Lagos Oriental Hotel, (September 11-12, 2019)

(https://tmt.knect365.com/nigeria-com/)
 

  • eNigeria Conference & Exhibitions, International Conference Center, Abuja, (November 5-7, 2019)

(https://nitda.gov.ng/nit/enigeria-2018/)
 

  • USA FAIR 2020: ACCESS NIGERIA (April 28-30, 2020 - TBC)

Eko Convention Center, Victoria Island, Lagos.
Organized by the US Commercial Service exclusively for American exhibitors to meet thousands of prospective Nigerian businesses.
(Please contact Ambrose.Thomas@trade.gov for more information) 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.


More Information

Nigeria Information and Communication Technology Trade Development and Promotion