Telecommunications contributed 9.19 per cent of Nigeria’s real Gross Domestic Product in the first quarter of 2026, as growing reliance on digital payments, online commerce
How Telecom Drives Nigeria’s Economy Beyond Calls, Data
Telecommunications contributed 9.19 per cent of Nigeria’s real Gross Domestic Product in the first quarter of 2026, as growing reliance on digital payments, online commerce, remote work and other digital services deepened the sector’s role in the wider economy.
Beyond calls and data consumption, telecom infrastructure now supports businesses and services ranging from software development and online retail to financial transactions, education and remote professional services.
Financial analyst and chartered accountant, Oluwatosin Olaseinde, said capital deployed into telecommunications networks was building productive capacity that extended beyond the industry.
According to him, reliable connectivity increasingly enables businesses to reach customers, process transactions and generate revenue through digital platforms.
The scale of investment required to sustain the infrastructure is substantial.
Financial planner, Kalu Aja, said MTN Nigeria had committed more than ₦1.62tn to infrastructure investment across the country, covering fibre networks, base stations, spectrum and other network infrastructure.
Telecom operators have also participated in infrastructure development through initiatives including the Road Infrastructure Tax Credit Scheme.
Telecom and digital payments
The growing dependence on telecommunications is particularly evident in financial services.
Nigeria’s electronic payment ecosystem processes transactions running into hundreds of trillions of naira, with telecom networks providing connectivity between customers, financial institutions, payment platforms and agents.
Agency banking has also expanded access to financial services in communities where conventional bank branches are limited, with Point-of-Sale terminals, mobile banking applications and USSD services enabling transactions across different locations.
Olaseinde’s Ladda, for instance, has grown to more than 75,000 users accessing savings and investment services through digital channels.
The growing dependence on connectivity also means network disruptions can affect economic activity beyond telecom operators.
Fibre cuts threaten economic activity
The Nigerian Communications Commission recorded more than 5,000 fibre-cut incidents in the first six months of 2026, highlighting the vulnerability of infrastructure carrying an increasing volume of economic activity.
Israel Ihaza, founder and chief executive officer of PropTech company Oikus, said fibre cuts could have consequences beyond telecom operators because businesses and public services increasingly depended on uninterrupted connectivity.
A network disruption can affect payment terminals, digital banking, online commerce, remote workers and organisations that rely on cloud-based or internet-enabled services.
For small businesses, loss of connectivity can prevent Point-of-Sale transactions, interrupt communication with customers and suppliers, and halt online sales.
The protection of fibre routes and other network infrastructure is therefore becoming an increasingly important economic issue.
Rising costs challenge network investment
At the same time, telecom operators face rising costs of maintaining and expanding their networks.
The industry has had to contend with foreign exchange pressures on imported equipment, higher energy costs, multiple taxes and levies, and right-of-way charges, all of which affect the economics of network investment.
MTN Nigeria Chief Executive Officer, Karl Toriola, has warned that the industry’s economics must become more sustainable if operators are to continue investing in network capacity.
Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, has similarly cautioned that excessive fiscal pressure on telecom operators could constrain network expansion and affect service quality.
The concerns come as demand for connectivity continues to rise while the infrastructure required to meet that demand remains capital intensive.
Beyond calls and data
Telecommunications also contributes to public revenue and investment returns.
MTN Nigeria remitted ₦429bn in corporate taxes in 2025 and paid ₦419.9bn in dividends to shareholders, illustrating the industry’s contribution beyond consumer spending on airtime and data.
For investors, listed telecom companies also provide an avenue for domestic participation in the sector through share ownership and dividends.
But the wider economic impact extends to the activities enabled by the infrastructure.
Digital payments, agency banking, online retail, remote professional services and technology businesses increasingly depend on networks requiring continuous investment and maintenance.
The Federal Government’s designation of telecommunications infrastructure as Critical National Information Infrastructure provides a framework for protecting strategic digital assets.
The effectiveness of that framework will depend on implementation, particularly around construction activities, fibre routes and coordination between infrastructure owners and public authorities.
As Nigeria’s digital economy expands, the issue is increasingly not just how many people have access to telecommunications services, but whether the infrastructure can remain reliable, affordable and financially sustainable enough to support the growing volume of economic activity that now runs through it.
