Nigeria’s federal government has prioritized the development of a digital-led strategy to boost the country’s economy’s competitiveness.
In 2019, Nigeria published its ten-year National Digital Economy Policy and Strategy (NDEPS) 2020-2030, as well as its National Broadband Plan (NBP) 2020-2025. The NBP establishes targets for 2025, including 70% penetration for people over the age of 15, 90% 4G/5G population coverage, and 60% digital literacy.
While Nigeria has the potential to accelerate its digital transformation by leveraging its expanding e-commerce markets and digital financial services, Dataphyte investigates some statistics that would define the success of an all-inclusive digital economy.
Approximately 61 percent of Nigerians Living in Rural Areas are Unconnected
Despite the fact that more people are using mobile internet in rural areas, there is still a significant rural-urban divide. According to a Global System for Mobile Communications (GSMA) survey, the rural-urban divide in mobile internet use in Nigeria has narrowed steadily, from 53% in 2018 to 39% in 2020. Nonetheless, approximately 61% of Nigerians in rural areas are unconnected, compared to 40% in urban areas.
Dataphyte’s analysis of the survey further shows that Nigeria has one of the highest rural-urban divides in mobile internet use among the low and middle-income countries (LMICs) surveyed. In comparison to Nigeria, countries such as Kenya and India have a lower rural-urban divide.
There is also a north-south divide within the country, with southern regions (including major cities such as Lagos) far ahead of northern counterparts in terms of access to mobile phones within a household.
Furthermore, service quality is an issue throughout the country, particularly in the north, where mobile phone coverage is uneven and impacted by conflict zones. Unequal access to mobile services, as well as lower literacy levels and information campaigns that do not reach last-mile communities, all contribute to the persistence of geographic disparities.
76 thousand Broadband Subscription and 39.98% Broadband Penetration
According to the most recent National Communication Commission data on broadband subscriptions, there are 76 thousand broadband subscriptions to broadband technologies with a download speed of 256 kbit/s or higher. This equates to a 39.98 percent access rate to high-speed internet per 100 Nigerians.
Although a broadband access rate of 39.98 percent indicates that the primary goal of the first National Broadband Plan was met by increasing broadband penetration from 6 percent in 2012 by a factor of 5, fixed connection penetration remains very low.
Mobile broadband connections, which provide high-speed internet access via a mobile phone network, account for approximately 99.8 percent of the broadband base, while fixed connections, which use base stations to deliver broadband, account for the remaining 0.2 percent. A world bank report noted that Nigeria’s household penetration rate for fixed broadband was 0.04 percent at the end of 2018, well below the African regional average of 0.6 percent and far behind the global average of 13.6 percent. This demonstrates that, despite recent growth in fiber installations, Nigeria’s national fixed-line infrastructure remains underdeveloped.
Not only is broadband penetration low in Nigeria, but existing connectivity is also slow. In the Digital Quality of Life Index for 2021, Nigeria’s internet is among the slowest in the world, with broadband connections at 13.45 Mbps and mobile internet at 17.91 Mbps, which is part of the reason why downloading a 5GB movie takes approximately 1 hour and 18 minutes.
A recent report attributes Nigeria’s underdeveloped fixed broadband infrastructure to high Federal and State taxes, as well as an insufficient wholesale regulatory regime, which has a ripple effect throughout the economy, contributing to low levels of financial inclusion and persistent geographic and gender gaps in access to and use of digital technologies. The ongoing conflict in the Northern region, according to the report, exacerbates these challenges due to increased security risks.
68% active subscribers for data (internet) services
According to the National Communication Commission (NCC), 68% of Nigerians are active data (internet) subscribers. According to the commission, 67 percent of subscribers accessed the internet via mobile technology, while only 1 percent subscribed via fixed wire and voice over internet protocol technology.
Given that Nigeria has the largest mobile market in Sub-Saharan Africa, supported by strong mobile broadband infrastructure and improved international connectivity, this figure is quite low.
According to the GSMA’s State of Internet Connectivity survey, key barriers to mobile internet use in Nigeria include perceived relevance of the internet to Nigerians, the cost of purchasing a handset, the cost of data, a lack of knowledge on how to access the internet on mobile phones, and reading and writing difficulties.
The survey, which included responses from a nationally representative sample of approximately 1,000 male and female adults aged 18 and older noted that, more than 91 percent of Nigerians who had heard of mobile internet but had not used it did so because they could not afford to buy the phone or data. In addition, 48% of those in this category live in rural areas, while 43% live in urban areas.
The high cost of data in Nigeria is confirmed by a report on the 2020 digital quality of life index. According to the report, Nigeria’s internet affordability is 90% lower than the global average, with the world’s worst internet being the most expensive. People in countries like Nigeria, Côte D’Ivoire and Mali require approximately a week’s worth of work to afford the internet, according to the study. Due to this, people in Nigeria have to work for more than 35 hours to afford the cheapest broadband internet.
Moreso, the GSMA survey revealed that 20% of Nigerians who have heard of mobile internet but have not used it have not done so because they do not see its relevance.
Surprisingly, 52 percent of Nigerians who have heard of mobile internet but have not used it have done so due to a lack of literacy and skill to access the internet on a mobile device, use a mobile device, or read and write. And, while 28 percent of those in this category live in cities, 33 percent live in rural areas.
A World Bank report noted that the digital skills ecosystem in Nigeria is characterized by illiteracy and skill gaps. And while online training initiatives are growing in popularity, low enrollment in and poor quality of basic education, combined with a lack of digital skills in curricula, is keeping the most vulnerable communities out of the digital economy.
The state of Nigeria’s digital connectivity, which is characterized by slow internet speeds and inaccessible connectivity, causes Nigerians and businesses to lose money while also discouraging small businesses to leverage the growing digital space to reach larger markets.
The COVID-19 pandemic has highlighted the importance of fixed broadband access in supporting a robust, inclusive digital economy ecosystem, not only for increasing productivity and efficiency, but also for allowing businesses to operate normally during crises.
Nigeria’s approach to maximising the digital economy has been a focus on Digital IDs. A great deal of effort has gone into making Nigeria’s digital ID mandatory, which, according to Nigeria’s Minister of Communication and Digital Economy, Ali Isa Pantami, is similar to the social security number in the United States, the national insurance number in the United Kingdom, the Aadhaar number in India, or the SANED number in Saudi Arabia, and is critical to national security, access to certain public services, and economic development.
However, according to a World Bank assessment, Nigeria is only realizing a small portion of its digital economic potential with the implementation of digital IDs and will need to make strategic investments to develop a dynamic, transformative digital economy by closing the digital skills knowledge gap and improving digital infrastructure.
Nigeria can accelerate progress toward an inclusive digital economy by taking the recommendations of the World Bank and investing in its digital infrastructure and strong foundational ID systems to promote inclusive digital connectivity, thereby promoting economic development, security, governance, and efficient service delivery.