Nigeria’s IT sector holds considerable potential to support both macroeconomic and non-oil growth, supported by a large population of almost 200m citizens, high levels of mobile penetration, and rapid uptake of mobile internet services. Long-term development strategies have highlighted high-speed broadband internet access as an important economic growth driver, and the government has moved to make considerable investments in a national fibre-optic backbone, setting the near-term target of 30% broadband penetration by the end of 2018. Infrastructure deficits and right-of-way (ROW) costs have dampened the growth outlook, however, while high security costs and a burdensome, complicated tax regime have also impacted IT investment. Despite these challenges, major urban centres, including Lagos, have benefitted significantly from IT investment, while government plans to expand the nation’s fibre-optic cable network should have a significant impact on long-term growth.

Sector Development

Prior to 1999 IT development in Nigeria was limited, with around 200,000 regular internet users recorded that year, out of a population of 120m. At the turn of the century, the government launched a series of IT reforms aimed at nurturing domestic industry and boosting technological uptake, beginning with the National Policy on Information Technology in 2001, which established the Nigeria IT Development Authority (NITDA). The Nigeria Internet Registration Association was established in 2006 to bolster the country’s online presence, and the National Assembly passed NITDA’s enabling act into law in April 2007.

The NITDA Act stipulates that NITDA is responsible for creating a framework for IT planning, research and development (R&D), standardisation, application monitoring, evaluation and regulation, as well as developing guidelines to establish and maintain IT infrastructure in the country. NITDA is also responsible for offering advisory services to the public and private sectors, creating incentives to promote IT use, including a network of planned IT parks, attracting private sector investment, determining critical research areas and assisting the government in establishing IT legislation. Perhaps most importantly, NITDA is also tasked with accelerating internet penetration in the country.

In 2011 the Ministry of Communication and Technology (MoCT) was created to engender economic transformation and diversification through ICT, with a focus on job creation, improving the sector’s economic contribution to the country and improving ICT governance. NITDA, NIRA and the country’s telecoms regulator, the Nigeria Communications Commission (NCC), all operate under the MCT.

Expansion Plans

IT growth and rising high-speed internet penetration levels could have a profound impact on the Nigerian economy, and the economic benefits of improved broadband connectivity are significant. In 2012 the World Bank reported that a 10% increase in fixed broadband penetration could boost a developing country’s annual GDP growth by up to 1.4%.

In 2013 the government unveiled the Nigerian National Broadband Plan (NNBP), a five-year strategy aimed at increasing broadband adoption, with broadband defined as a service providing speeds of at least 1.5 Mbps. The NNBP set several mid-term targets, including a five-fold increase in broadband penetration by the end of 2017 from a baseline of 4% to 6% in 2013, which was successfully met. The strategy also calls on the government to establish new submarine cable landing points to coastal areas outside of Lagos, including the Delta, Rivers, Bayelsa and Ondo states, as well as develop a fibre-optic backbone, to be supported by open-access infrastructure shared among mobile network operators and the widespread rollout of 3G mobile services.

The NNBP is one component of the broader Vision 20:2020 strategy, which has called for IT adoption to support growth in the agriculture, oil and gas, health, education and financial services sectors, in addition to using IT to support governance, employment, productivity, and R&D.

Mobile Driver

Since the NNBP’s launch, mobile internet has risen to become the dominant channel for internet access in Nigeria, with the NCC reporting that mobile internet subscriptions have more than tripled since 2013, rising from 32m in January that year to 100.2m in January 2018, before reaching 104.6m in August 2018, the most recent month for which statistics are available. Based on the IMF’s population estimate of 194m, the mobile internet penetration rate stood at about 54% that month. NCC statistics also recorded 66,144 CDMA subscribers, 12,602 fixed-internet users and 359,501 VoIP subscribers in August 2018.

NNBP Progress

In June 2018 Umar Danbatta, executive vice-chairman and CEO of the NCC, told local media that the country was set to hit the NNBP’s target of 30% broadband penetration before the end of 2018, after the commission decided earlier in the month to license and auction new frequency spectrum to local companies Bitflux Communication and Intercellular Nigeria. In the same month the commission moved to suspend MTN Nigeria’s planned acquisition of Visafone Communications and its spectrum, pending a review into the telecoms company’s possible monopoly on IT infrastructure (see Telecoms overview).

According to Danbatta, Nigeria’s mobile operators had deployed an estimated 52,000 km of fibre-optic cable as of April 2018, while 12 new metropolitan fibre-optic cable network companies and 12 national long-distance operators were granted licences. Five new international submarine cable and landing stations had been established in the country since 2013.

The NCC has also reported steady progress towards meeting the NNBP’s targets, with Adebayo Shittu, minister of communications, announcing in March 2018 that the government intends to establish incubation hubs for start-ups across six geopolitical zones in the country, as well as set up an ICT development bank, which could significantly bolster credit access for private players. New private sector-supported initiatives to expand rural coverage are also expected to play an important role in supporting national broadband targets.

Broadband Benefits

Rapid internet adoption has greatly benefitted Nigeria. At the KPMG Digital Summit 2017 held in Lagos in October, the global audit advisory company reported that foreign direct investment in the Nigerian digital sector almost reached $1bn in 2016, with most of the funds channelled into e-commerce and online payment platform businesses. Boye Ademola, partner and lead for digital transformation at KPMG Nigeria, said during a press briefing for the summit that record-level valuations and investments had been made by digital companies in Nigeria since the start of 2016.

In March 2018 the Economist Intelligence Unit’s Inclusive Internet Index 2018 ranked Nigeria fourth out of 24 African countries in terms of internet inclusiveness and 56th out of 86 countries overall. According to the index, which benchmarks internet inclusion across categories including availability, affordability, relevance and readiness, Nigeria is the most affordable country in Africa for internet access, and 17th globally, as a result of high levels of competition among mobile internet providers and internet service providers (ISPs). However, Nigeria ranked 72nd globally in terms of availability, which highlights the country’s low usage and quality of infrastructure and limited fixed-broadband connections. Nigeria scored 55th globally in the readiness category, which examines internet users’ skill levels, cultural acceptance of the internet and government policy supporting internet adoption.

In April 2018 local media reported that, while internet in Nigeria is was ranked the most affordable across the African region, internet prices comparative to the country’s minimum wage revealed that 1 GB of internet data in Nigeria costs more than “some other African countries”.

ISP Monopoly

According to local media, despite 37 ISPs being active in Nigeria in November 2017, the market is dominated by local Spectranet and Tanzania’s Smile Communications. Although mobile operators, including MTN, Globacom, Airtel and 9mobile, have made major inroads into consumer internet service provision through the deployment of 3G and 4G networks, about 90% of the country’s infrastructure is owned by Spectranet and Smile. According to the NCC, Spectranet provided internet services for 193,892 out of 390,794 corporate and small and medium-sized enterprises in November 2017, while Smile offered internet services for 156,243 customers, equal to market shares of 49.6% and 40%, respectively. The commission reported that 286,046 of ISP customers were considered active as of November 2017, with 927 points of presence established by ISPs across the country.

The NCC reported, however, that over 90% of ISPs had halted operations in Nigeria since 2013, against a backdrop of rising competition from mobile operators, as well as a macroeconomic slowdown that began in mid-2014, when global oil prices began to collapse. According to the commission, though 103 ISPs had received licences since 2013, just 10% of companies applied to have their licence renewed. Despite the number of ISP licence renewals continuing to drop, the NCC issued a raft of new licences, bumping up the number of ISPs active in Nigeria to 105 as of September 2018.

Satish Kumar, COO of local solutions provider Direct on Data, told local press in February 2018 that traditional ISPs are facing notable challenges, including the cost of building new network operating centres, power shortages, bandwidth availability and elevated rental rates at base transceiver stations, which can be as high as N400,000 ($1290) per month. Bulk bandwidth charges are also high, ranging between $8000 and $15,000 per Mbps, depending on the operator. These concerns were echoed by Ajay Awasthi, CEO of Spectranet, who also told local media in February 2018 that poor service delivery from tower operators was a major growth impediment, while infrastructure construction costs were rising by 10% annually, a situation exacerbated by the naira’s depreciation.

During a report of Nigeria’s progress in IT development in June 2018, Danbatta said that the country needs to expedite fibre-optic infrastructure deployment, reporting that the commission is considering adopting an open-access model as the best framework for fibre development. To this end, the NCC has established the Broadband Implementation and Monitoring Committee (BIMC), which is tasked with accelerating broadband deployment. Addressing delayed infrastructure development will likely comprise an important component of the BIMC’s undertakings in the coming years.

Access Gaps

While internet subscribership has increased rapidly in recent years, significant access gaps remain, and in June 2018 local media reported that 154m Nigerians were still lacking high-speed broadband access, with broadband penetration rates standing at just 22%, based on National Population Commission estimates, which put Nigeria’s population at 198m people.

In November 2017 the International Telecommunication Unit ranked Nigeria 143rd globally in its ICT Development Index in terms of ICT development, down from 137th in 2016. Nigeria was placed 15th in Africa, behind countries including Mauritius, South Africa, Kenya, Gabon, Zimbabwe and Cote d’Ivoire.


Although an infrastructure deficit and limited investment in domestic networks will likely prevent Nigeria from meeting its 30% broadband penetration target by the end of 2018, the country has made notable progress in advancing its mid-term IT goals. The government also intends to expedite infrastructure development, although a lack of infrastructure and high ISP operating costs will continue to pose a challenge.

Policy-making has increasingly shifted towards fostering domestic industry (see analysis), which should in turn support the development of robust skills for more than 300,000 estimated computer science and engineering graduates entering the labour force annually. Moving forward, Nigeria’s greatest IT strength will likely be its human capital, with both industry giants Facebook and Google unveiling tech community centres in the first half of 2018, demonstrating the country’s potential to become a major tech start-up hub in the region.