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Essay: Growth in the telecommunication sector in Nigeria

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  • Subject area(s): Economics essays
  • Reading time: 6 minutes
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  • Published: December 11, 2019*
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  • Words: 1,538 (approx)
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  • Growth in the telecommunication sector in Nigeria
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The final chapter of this research paper, where all the results gotten the previous chapter will be discussed and summarized. Another related research finding are also talked about, before concluding and giving some recommendation if need be.


An empirical study and analysis were carried out to determine the result of two separate hypotheses stated in the first chapter. The first hypotheses were to determine if the growth of mobile telecommunication sector has a significant impact on FDI or not, and the second hypotheses were to determine if FDI in return had a significant impact on telecommunication sector in Nigeria. The paper employed the use of important ICT economic indicators about the telecom sector Such as Gross domestic product (GDP), foreign direct investment in the telecom industry (FDI) and Investment in Telecom industry (TEL). Reasons for the use of this economic indicators being that, Growth Economists predicts that economic growth was driven by the increase in investment on ICT. Several test was carried out using the economic indicators data gotten from reliable sources.

Using multivariate VAR model and approaches such as Granger causality, Impulse responses, Error correction model (ECM), and Johansen Cointegration, the paper explored the short-run and long-run relationship between FDI, TEL and GDP. The times series data variables based on quarterly data from 2002Q1 to 2014Q4. To detect whether the time series variables were stationary or not, I used Eviews software to run a Philip-Perron Unit root test. The finding of this test indicated that the three variables used were not stationary at the level, but became stationary after 1st difference.

The next test done was the Johansen Cointegration test divided into two test of its own, the Trace test and Max-Eigen Test. The findings from the trace test indicated that there was, at least, one cointegrated equation at 0.05 % level, and the Max-Eigen test also indicated that there was at least 1 cointegrated equation at 0.05 % level as well. These made it necessary in running of Error correction model (ECM) test, which was done using Var. The results of the test showed that FDI had a significant impact on TEL, but the TEL did not have any significant effect on FDI, which was the same test result that gotten when Granger causality test was run on the same variables. It is important to note that both Johansen Cointegration test and Granger causality test were used to determine the relationship between all the variables used, on the long run.

The final test conducted was the General impulse response functions on all the variables, and the test result indicated that there FDI had a significant effect on TEL, while the TEL also had some significant effect on FDI as well. FDI also had a significant effect on GDP, as the GDP had a significant effect on FDI in return. The same circumstance applied when comparing the relationship between TEL and GDP.

The distinction between the General Impulse response functions and the two previous test conducted is that, while those tests were used to check the relationship between all the variables on the long run, the General impulse response function was used to check their relationship on the short run, with a period of 10 months specifically.


They purpose or reason for this research was to determine the impact or effect of information and communication technologies (ICT) on economic growth in Nigeria, via the mobile telecommunication sector. After acquiring all necessary data for the variables used in trying to show the significant impact ICT. The final analysis showed some mixed results, although earlier empirical studies also indicated some mixed results with different research methodology and different geographical zones as well, there is an overall agreement that  ICT has had a significant impact on economic growth of Nigeria and the world as a whole.

The telecommunication sector in Nigeria for over 14 years been amongst the major source or the major attraction of foreign direct investment, this foreign direct investment has not only helped in boosting the growth and development of the telecom sector in Nigeria, but it has also had a significant impact on economic growth in the whole of the country. Other sectors of the country benefited from the mobile telecom sector in many ways. Let’s take the banking sector for example: When electronic banking were introduced it marked for the don of a new era. Electronic banking described as the process of carrying out the business transaction of a bank using various electronic devices. Examples of electronic devices used include Computer Systems, Sophisticated Mobile phones, Automated Teller Machine (ATM), Internet enabled facilities, Optical Character Recognition (OCR), and Smart Cards (Olowatolani, Joshua & Philip, 2011). Mobile banking is also originating from the electronic banking, is an ICT application made for phones, and used for running business transactions from any location in the country. Which according to Felix, Omolola and Irwin (2011) the multiple and diversified society in Nigeria influenced the use of this new banking system and creating room for further development. When we also mention the Health sector in Nigeria, you will also find that ICT in many ways has helped in the improvement of the sector. Now people can easily get health tips via message, people can even diagnose their health status, and women could also check their pregnancy status with new mobile applications. All this and many more made the sector to improve. If we go the Educational sector, students and lecturers now have easy assessed to all sort of information via the internet. Unlike the old days where people went to the  Library to access information. ICT, through the mobile telecommunication sector, has built a lot of infrastructures as more and more investor’s troop into the country, it has also created a lot of jobs and employment both for skilled and unskilled workers. In general is has helped to raise the standard of living the country. Despite all the positive impacts that ICT and the telecom sector has had in Nigeria, there has also been some negative side or aspect of things such as Exam malpractices with a mobile device, Immorality due to easy access to pornography videos, and a negative change of social interaction and behaviours due to social apps. All this goes to say that in a country like Nigeria where the population of the poor is highly greater than that of the rich, ICT with all it positive advantages can serve as a means of bridging the huge gap between the poor and the rich.


Judging from how the economy of the Nigeria has grown rapidly, during the few years in which the mobile telecommunication sector of the country has blossomed. After the change of policies and reformation of the ICT sector by the government, there is no shadow of a doubt that the country as a whole would be better off if the government implemented more policies that will enable the growth of the ICT and telecom sector. Increasing economic growth and development.

Currently under the leadership of the New Nigerian President Mohammed Buhari, there have been a lot of policies placed in the country, which in turn has been affecting the countries growth. One of the policies passed by the government that required all mobile network operating companies to register the full data information of all the subscribers who bought their Sim cards, and they should disconnect those that refused to register. This policy issued and gave a deadline to be carried out. The failure of MTN company is not complying strictly with this policy lead to a huge fine of $5.2 billion dollars this year, but due to pleading and various negotiation the fine was brought down to $3.9 billion, the company are said to planning to take the case to court.

Another policy was placed by the government, through the Central Bank of the country on transaction limit via ATM card within or outside the country. All the commercial banks in the country were ordered to place the a daily online transaction maximum limit of $1000 with the use of ATM cards, this, in turn, has affected so many Nigerian citizens living abroad and doing business transactions with banks ATM cards from Nigeria. The commercial banks in the country also complained of loss of foreign investors due to low access to foreign currency as a result of new policies. The country’s currency Naira fell in value when compared to the dollar in exchange black market.

My Advice to the Nigerian Government is that they should reconsider and change some of this newly implemented policies that are trying to cripple the steady growth of the country’s economy. Because these new policies are not only affecting, businesses, naira value and the growth of the economy, but the people of the country especially the poor masses who are trying to survive.

As an economist, I would also encourage my fellow colleagues who might come across this research paper to try and carry out more and more similar studies for the betterment of the future.

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