Information and communications technology will benefit from easier access to foreign exchange, the World Bank has disclosed.
It revealed this in its recent Nigeria Development Update report.
According to the Word Bank, recent reforms by the Federal Government would contribute to the progressive recovery of GDP growth, which is expected to grow annually by 3.5 per cent between 2023 and 2026.
It said, “Services, especially banking and ICT, and non-oil industry will benefit from a more stable and predictable macroeconomic environment, and easier access to FX and imported inputs.”
The Bretton Woods institution stated the services sector grew by 4.3 per cent year-on-year in the first nine months of 2023, driven by growth in financial services and ICT.
Powered by ICT, the service sector continues to be a main driver of growth in the country. Boosted by voice and Internet subscribers, the ICT sector grew by 8.5 per cent y-o-y in the first nine months of 2023.
E-payments drove financial services, which grew output by 25.3 per cent in the first half of 2023.
Commenting on the growth potential of the sector, the global bank, said, “The economic outlook for Nigeria in the short to medium term hinges on the continuation and effectiveness of its macroeconomic stabilization agenda.
“Successful implementation of the initiated reforms will be the first step toward improving Nigeria’s growth prospects. With the implementation of these first macroeconomic stabilisation reforms, the economy is expected to grow at an average annual rate of 3.5 per cent during 2023–2026, or 0.5 of a percentage point higher than in a scenario in which the reforms had not been implemented.
“Services, especially banking and ICT, together with industry will benefit from a more stable and predictable macroeconomic environment and easier access to FX and imported inputs.”
Recently, the Association of Licensed Telecommunications Operators of Nigeria stated that the lack of foreign exchange may impact job creation in the telecoms sector.
Telcos disclosed this during a Nigerian Communications Commission industry interactive session with the new Executive Vice Chairman and Chief Executive Officer of the commission, Dr Aminu Maida.
The Chairman of ALTON, Gbenga Adebayo, said, “We need FX. Some of these requests are on your table. We must be in the first line for access to FX, otherwise, all the job creation we are talking about may not be possible if people cannot pay their FX obligation and buy their applications because of scarcity.
“So, access to FX has become more than important for us.”
FX scarcity in the telecom space has not been helped by falling foreign investments.
In the first half of 2023, investments into the space fell by 77.35 per cent year-on-year to $47.86m from $211.29m in the corresponding period of 2022.