How Nigeria's mobile industry helped make it Africa's largest economy

On Sunday, 6 April 2014, Nigeria became the largest economy in Africa after its government “rebased” their  GDP for the first time since 1990, showing an 89% jump in its economy and catapulting it to 26th on the list of the world's biggest economies. With Nigeria's GDP now revised to $510bn, it surpassed Africa's front runner, South Africa, for the first time in two decades with a total of $320.3bn of its own at the end of 2013. In calculating its current GDP, Nigeria's government attributes the massive increase to having not factored in its movie industry, Nollywood, which makes $600 million a year and employs more than a million, or that of its booming telecommunications industry...

Nigeria's mobile marketThe telecommunications and information sector is the highlight of Nigeria's rebased GDP, having contributed 8.68% or $44.3bn to Nigeria's economy. According to recent forecasts by telecommunications research website, Budde, Nigeria's current mobile subscriptions stand at more than 125 million and a market penetration of around 75% at the beginning of 2014. Considering that in 1990 the state telephone company had just a few hundred thousand fixed line customers, this is a giant leap forward. Nigeria is the largest mobile market in Africa and the 10th largest worldwide. With the likes of MTN, Airtel, Globacom and Etisalat comprising the country's major mobile service providers, the confidence in this sector can be seen in an annual revenue report released by MTN in 2013 totaling N794bn for its Nigerian operations.

Invest to impress

Smartphone penetration in Nigeria is among the highest in Africa, with up to 40% of the total smartphone sales expected in Africa to be sold in Nigeria in 2014, according to Mr. Emmanouil Revmatas, director of Samsung Electronics West Africa. Nigeria's rate of smartphone uptake and the rapid rate at which the market has been growing has promoted network providers and companies to invest billions of dollars every year in purchasing additional base stations, fibre optic transmission and data centers to support the ever increasing appetite for bandwidth. MainOne Cable Co Ltd. is one such company that operates an undersea cable connecting West Africa and Europe, and is planning to open a $25 million data center in Nigeria by June 2014.

The future looks promising

The continued upswing of the mobile market has spurred growth in various other sectors from e-commerce and mobile payments to app development. Jumia, an African Amazon-like online retailer is hoping to cash in on the population moving online, take them off the street markets and directly onto their website, cutting out on the department stores and malls in between. One market research firm suggests that Nigeria, which is Africa’s most populous country, will have almost tripled its online purchases in just three years to more than $1 billion by 2014. Mobile payments more than doubled to 2.4 million in the first half of 2012 from the same period a year earlier, while Internet payments rose 9.3 percent, according to data from the Central Bank of Nigeria. With mobile penetration where it is at the moment, Nigeria has the right ingredients to become the biggest developer of apps on the continent. Valued at over $1bn last year September, the mobile app market has produced service-based apps like 'TrafficButter', 'Mobile Money' that are going a long way to helping change the way Nigerians live.

Nigeria's mobile industry has contributed significantly to its economy and will continue to grow as smartphone adoption becomes more commonplace and adequate infrastructure is put into place. Africa's largest economy is well on the way to connecting itself with the rest of the world and establish itself as a global player.