In the past five years Nigeria has grown into one of Africa’s largest and most vibrant markets for ICT products and services, with an ecosystem that ranges from software start-ups to infrastructure firms. According to the Federal Ministry of Communication Technology (FMCT), the federal oversight body, the nation accounts for 29% of all internet usage on the continent, and this figure is expected to rise. The sector also is playing an increasingly central role in a traditionally oil-dependent economy: it accounted for nearly 8% of Nigeria’s GDP in 2013, up from 6% in 2011, making it the fastest-growing component of the economy. “Nigeria has had average GDP growth of roughly 6-7% between 2009 and 2012,” said Omobola Johnson, the minister of communication technology, in March 2014. “In that same period the ICT sector has grown by an average of 30% – double that of the next-fastest growing sector… the sector is now the fourth-largest contributor to GDP.”

Oversight & Regulation

Prior to the creation of the FMCT – which is now responsible for coordinating, regulating and developing the country’s overarching ICT strategy – in 2011, an assortment of federal agencies were involved in Nigeria’s ICT industry. These entities have since continued to operate under the aegis of the new ministry. Chief among them are the Nigerian Communication Commission (NCC), the telecoms regulatory agency, which has a mandate to enable fair competition among operators with the goal of ensuring high-quality, low-cost telecoms services, and the National Information Technology Development Agency, which is charged with managing the government’s ICT capabilities and implementing long-term technology development plans. The agency works closely with other state entities, including the Federal Ministry of Science and Technology, the Federal Ministry of Education and higher education institutions, among others.

In 2011 various other entities were put under the management of the FMCT, including the previously independent Nigerian Broadcasting Commission, which regulates the country’s radio and television broadcasters, and the Nigerian Postal Service (NIPOST). The FMCT also oversees the operation of two state-owned infrastructure management firms, namely Galaxy Backbone, which owns and operates the government’s terrestrial fibre-optic network; and Nigerian Communications Satellite (NigComSat), which manages the country’s geostationary communications satellite, providing digital services to private firms and government entities.

By the Numbers

Nigeria is both the largest mobile telecoms market and the largest internet market in Africa by volume. It also ranked eighth out of the UN’s 212 member countries in terms of total internet users in 2014. Yet much of this is a result of the country’s large population. Comparatively, Nigeria ranked 128th in terms of internet penetration. This relatively low rate and the high rate of internet uptake point to considerable potential for future growth.

According to data from the International Telecommunication Union (ITU), as of January 2014 Nigeria was home to 55.9m internet users, which translated into an internet penetration rate of 32%. This number is up from 48.4m users as of June 2012 and 24m at the end of 2009. According to data from the World Economic Forum, 50% of Nigeria’s urban residents access the internet at least once a month, while 58% have internet-capable phones and 21% have smartphones.

As is the case in many of Africa’s frontier markets, these figures are considerably higher than in the country’s rural areas, where underdeveloped infrastructure and spotty service mean a relatively large percentage of the rural population does not have regular access to the internet. Roughly half of the country’s total population of nearly 170m people – according to World Bank data – live in urban areas. The great majority of Nigeria’s internet users access the network via mobile handsets. As of December 2014, nearly 80m subscribers of the country’s four major mobile network operators – MTN Nigeria, Airtel Nigeria, Globacom and Etisalat Nigeria – had active internet subscriptions on their mobile devices, according to data from the NCC.


The FMCT has rolled out two major sector-wide initiatives in recent years. The National ICT Policy (NICTP), which was approved in principle in August 2012, lays out a comprehensive development strategy for the industry, with the objective of integrating ICT “into the socio-economic development of Nigeria, in order to transform Nigeria into a knowledge-based economy”. The NICTP builds on a handful of ICT development plans put in place over the past decade and a half, including the 2000 National Telecommunications Policy. The NICTP strives to be comprehensive, and comprises 23 focus areas. Set to run through 2017, the plan is organised around a series of annual development targets for each of these areas.

“The government’s local content initiative will hopefully encourage foreign investors to take Nigeria seriously as a centre for technology in Africa. It should also drive more business to local IT firms,” Rex Mafiana, the managing director of Flex IP, told OBG.

In conjunction with the NICTP, the FMCT has established a number of other parallel initiatives in recent years. These include the National Broadband Policy (NBP), under which the government is working to boost broadband penetration to some 30% by 2018, up from the current 6%; and the Nigerian Content Plan, which involves boosting indigenous participation in ICT. The FMCT oversees a number of related ICT innovation and development programmes, including the IT Development Entrepreneurship Accelerator and Techlaunchpad, both of which aim to identify and support promising indigenous ICT content (see analysis). Other initiatives aim to boost female participation in ICT and build up the domestic ICT workforce.


One of the primary drivers of the government’s efforts to increase digital activity is to shift more of its own procedures online. Under the FMCT’s Getting Government Online initiative, the ministry is working to ensure that the federal government “deploys technology as a mechanism to transform the way government operates and enhance the effectiveness of government service delivery for the benefit of its citizens”. At the most basic level this has meant ensuring that every government ministry and website is represented online, and that all state employees have an email account, for example. Since the FMCT was established in 2011 the federal government’s web presence has been standardised, with each ministry operating under the “” domain name. Similarly all federal-level employees were issued a standardised email address, and, where necessary, have been trained how to use it.

In April 2013 the ministry launched, an online portal for government services. Upon its launch the portal offered 10 services, including access to school inspection reports, farmer registration, and trademark and patent registration. New processes will be added regularly, and the FMCT is working on including business services – such as the ability to incorporate a company – and online payment capabilities.

Under the FMCT’s Open Data Initiative, meanwhile, the state aims to publish datasets from a wide variety of ministries and other state-owned entities online, in an effort to encourage businesses and individuals alike to build data-focused businesses. This initiative, which has received funding from the World Bank and the UK’s Department for International Development, makes Nigeria one of more than 50 countries worldwide that have established open data programmes in recent years.

Finally, in conjunction with the Open Data Initiative the state is setting up a central government data centre in Abuja, which will eventually host much of the nation’s top-level data. The project is expected to be up and running by the end of 2015.

International Connectivity

Five submarine fibre-optic cables come ashore in Nigeria, making it one of Africa’s best-connected countries in terms of international bandwidth, with a total capacity in excess of 10 TB per second (TB ps). Most of this capacity has come on-line in the past five years. Prior to 2009 Nigeria was connected to the global internet backbone via one cable, the South Atlantic 3-West Africa Submarine Cable (SAT-3/WASC) system, which runs south from Portugal through Spain, the Canary Islands, Senegal, Côte d’Ivoire, Ghana, Benin, Nigeria, Cameroon, Gabon, Angola and South Africa, where it links up with the South Africa Far East (SAFE) cable, which, in turn, continues on to Malaysia via Réunion, Mauritius and India.

Completed in 2001 at a cost of $600m, the SAT-3/WASC system was financed by telecoms companies in 36 countries along the route, including South Africa’s Telkom Group, AT&T, France Telecom and, in Nigeria, the state-owned Nigerian Telecommunications (NiTel), which was the country’s monopoly operator during the funding period. The system’s initial capacity was 240 GBps, but a 2009 upgrade brought this to 340 GB ps. However, with a single gateway, the country’s end-user speeds were unsurprisingly slow, making it difficult for users to undertake large bandwidth activity.

In July 2010 Main One Cable Company (MOCC) launched the 7000-km Main One Cable, which, like SAT-3/WASC, runs south from Portugal, with landing points in Nigeria and Ghana. At time of launch the Main One system was the first privately owned cable in West Africa, backed by Nigeria’s Main Street Technologies with stakes held by the Africa Finance Corporation, a multinational development firm; the Pan-African Infrastructure Development Fund; FBN Capital; and Skye Bank. The cable has an overall capacity of 4.96 TB ps. MOCC has plans to eventually take the cable ashore at other landing points along the West African coast, including Morocco, the Canary Islands, Senegal and Côte d’Ivoire.

In early 2011 the total fibre-optic capacity coming ashore increased again when Globacom, the country’s third-largest mobile operator, launched services on its 2.5-TB ps Glo-1 cable. The 9800-km link runs north from Nigeria to the UK, with landing points in Ghana, Senegal, Mauritania, Morocco, Portugal and Spain.

In May 2012 the West Africa Cable System (WACS) was turned on. The 15,000-km system follows much the same route as the other cables in the region, linking the UK to more than 10 countries on Africa’s west coast, terminating in South Africa. Like SAT-3/WASC, the $650m WACS system was financed by a consortium of 12 telecoms operators in countries along the cable route, including Congo Telecom, Togo Telecom, Telecom Namibia and South Africa’s Telkom SA, although South Africa’s MTN Group was the largest backer. While it was planned with a capacity of 3.84 TB ps, during construction the project was upgraded to 5.12 TB ps. As a subsidiary of the system’s largest investor, MTN Nigeria is expected to benefit considerably from WACS capacity in the coming years.

Finally, in late 2013 the African Coast to Europe (ACE) cable network came ashore in Nigeria, a year after going live in a handful of other African countries. The ACE cable stretches from France to South Africa, and will eventually connect 23 countries in total, including, via over-land spurs, Niger and Mali, marking these countries’ first international submarine cable link. The $700m ACE system was financed by a consortium of 16 operators led by French telecoms firm Orange. Dolphin Telecoms, a UAE-based company, has invested heavily in the system, and holds the cable landing rights in Nigeria, Ghana and Senegal, in addition to partial rights in Mauritania and Guinea. The 17,000-km ACE cable has a capacity of 5.12 TB ps. A handful of additional new cable systems are expected to come aground in Nigeria in the coming years, including the South Atlantic Cable System and WASACE, among others.

Domestic Capacity

Despite the large amount of international fibre-optic connectivity in Nigeria, broadband services remain modest by international standards. Most estimates put Nigeria’s total submarine cable capacity utilisation rate at 10-20%, which means that 80-90% of capacity goes unused – a result of underdeveloped domestic infrastructure. Most of the country’s international fibre-optic capacity comes ashore near Lagos – where the bulk of Nigeria’s broadband subscribers live – and goes no further, due to a lack of terrestrial fibre-optic networks. Broadband internet penetration in Nigeria was estimated at 4-6% in the NBP, which was published in 2013, while an estimate released by MOCC in the same year put it at 10%.

“The domestic infrastructure is not there. Broadband penetration is still less than 10%. A number of incentives, including subsidies, licensing and negotiation of right of way issues will be required for continued expansion, particularly in rural areas,” Sean Hsu, the managing director of Netcom, told OBG.

The limited availability of broadband services has contributed to slow uptake, compounded by relatively high costs. According to an April 2014 study by the Alliance for Affordable Internet, the average cost of a fixed-line broadband subscription in Nigeria was equal to 39% of average income, compared to 13% for mobile broadband via the mobile network operators (MNOs). Compounding the issue is the fact that a significant percentage of the population – some 46% in 2010, according to the World Bank – lives below the poverty line. In a 2013 ITU index of 169 countries, Nigeria was ranked 142nd for affordability of fixed broadband.


Among the key reasons the cost of broadband has remained high over the past half decade despite the steady expansion of submarine capacity is that installation costs are extremely high and the cable companies do not share terrestrial infrastructure. A handful of companies – some of which are aligned with one of the submarine cable companies – have rolled out domestic fibre-optic networks, most of which are centred around Lagos, with some lines running to Abuja. Both Globacom and MTN operate terrestrial networks, for example, which link up to their respective submarine capacity. Domestic fibre networks are also owned by broadband wholesalers, including Phase3 Telecoms, Suburban Telecoms and 21st Century Technologies.

While investment into fixed-line fibre networks has risen in recent years, according to the FMCT substantial additional capacity is still needed. “The rollout of the terrestrial fibre-optic network is not keeping pace with the increasing international bandwidth landing on Nigeria’s shores,” said Johnson in October 2013. “Around 30,000 km of fibre had been laid as of 2010 and we estimate that an additional 11,000 km has been laid since then, of which 4000 was over power line.” Perhaps more importantly, according to Johnson, much of this new fibre capacity has been rolled out in areas already covered by existing networks. “Additional fibre is mainly duplications along a few commercial routes.”

The NBP aims to address these issues, with the goal of boosting broadband penetration to 30% by 2018. Under the plan the FMCT is working to encourage infrastructure sharing, whereby network operators link their networks to each other to provide redundancy, and sign agreements to lease bandwidth from one another. A similar initiative aimed at MNOs sharing base stations in rural areas has had a positive impact in recent years. Other issues that the NBP aims to address include “the high costs of leasing transmission infrastructure; long delays in the processing of permits; multiple taxation at federal state and local government levels and having to deal with multiple regulatory bodies; damage to existing fibre infrastructure as a result of cable theft, road works and other operations; and the lack of reliable, clean grid electricity supply”.

Sola Teniola, the CEO of IS Internet Solutions, told OBG, “ICT tends to be one of the larger revenue streams for governments, but how the sector is taxed will have a profound effect on how quickly and efficiently Nigeria improves its connectivity.”

State-Owned Assets

The government is also working to expand its own terrestrial fibre-optic network. Galaxy Backbone was established in 2006 with a mandate to take charge of Nigeria’s state-owned ICT infrastructure. In 2008 the company launched the project, with the objective of consolidating all federal ministries, agencies and other public entities onto a single, high-speed communications network. By early 2014 Galaxy Backbone oversaw a fibre-optic and satellite network that linked nearly 400 government facilities in thousands of locations across the country. In June 2013 Galaxy Backbone was awarded a UN Public Service Award for the initiative.

The government has also taken an increasingly active role in administering Nigeria’s wireless spectrum assets. The country is in the midst of switching from analogue to digital television broadcasting, which, when completed, is expected to free up a considerable amount of new wireless spectrum, much of which will be put up for auction. The nation’s mobile operators, in particular, are expected to use this spectrum to roll out 4G long-term evolution (LTE) high-speed mobile data services. Additionally, the telecoms industry is working on expanding 3G data services across a wider area, and particular in rural regions (see Telecoms overview).


End-user hardware sales are largely composed of exports, though local manufacturing is increasing, but as purchasing power rises, competition should intensify. The great majority of PCs sold in Nigeria are manufactured by foreign firms like Dell and HP. According to the FMCT, foreign brands account for around 70% of domestic PC sales, with the remaining 30% supplied by domestic manufacturers. Local firms like Brian Integrated Systems, Inlaks Computers and Zinox Computers build hardware in Nigeria from inexpensive parts sourced from Asian manufacturers. Most of these companies sell PCs and related products to public sector entities and the lower end of the commercial market.

“Currently, we primarily supply schools and universities,” Olaide Balogun, the executive director of Brian Integrated Systems, told OBG. “However, we are planning to move into the private sector by offering new types of products, like tablets, and by building brand awareness in the coming years.”

After-sales service is a key component of the PC industry in Nigeria, as many people hold onto their hardware for as long as possible. Consequently, many major manufacturers, both foreign and domestic, offer long warranties and, in some cases, networks of certified repair centres. In late 2013, Asus, a Taiwanese manufacturer, announced that it would offer extended two-year warranties on all of its desktop and laptop PCs in Nigeria, in what was widely regarded as a bid to gain share in the burgeoning market.

In general, desktop PC sales have declined in recent years, in favour of laptops, tablets and mobile phones, the latter of which have dominated local hardware market since the mid-2000s. In recent years Nigeria has ranked as one of the fastest-growing smartphone markets in the world according to research published by consulting firm GfK. As in the PC segment, major international players like Apple and Samsung currently dominate the smartphone market, though a handful of domestic brands are also active (see Telecoms overview).


Almost all of the ICT hardware in Nigeria runs imported software, and primarily Microsoft’s Windows operating system. A substantial percentage of this software is pirated, with a 2014 study by the Business Software Alliance, an industry association, stating that Nigeria’s economy loses around N82bn ($500m) annually to software piracy. The government has partnered with Microsoft and other firms to crack down on illegal software sales, raiding a number of counterfeit operations and arresting purveyors of pirated software. Still, according to Chris Uwaje, former president of the Institute of Software Practitioners of Nigeria, the authorities should do more. “Nigeria needs to develop a software strategy, policy and legislation and this must be accorded the highest priority in all sectors, as it will create over 3m jobs and fire the national economy,” he told local media in May 2014. A new intellectual property rights bill is making its way through the government, which could eventually impact the software market.


Despite the rapid pace of growth in recent years, the industry faces a host of challenges, including low penetration in terms of both usage and infrastructure access, high operating costs and a lack of local content. Nevertheless, most Nigerian ICT players are looking forward to continued growth ahead. This is due in part to the significant scope for expansion in terms of potential bandwidth – thanks to a total capacity of nearly 10 Tbps, most of it unused, through the existing submarine cables. With demand for internet-enabled devices on the rise, and taking into account Nigeria’s large population, the ICT sector is preparing for major expansion. “An explosion is coming in the Nigerian ICT industry,” Teniola said. “Areas that are poised to grow rapidly include business-process outsourcing, platformas-a-service, data hosting and cloud computing.”