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Expansion of broadband access will drive Nigeria's economic advancement 19 Jul 2024

I first gained access to a persistent internet connection around 1997 during my mandatory Industrial Training (IT) attachment with Shell Petroleum Development Company in Warri. At the time, I was studying computer science at the university and had hoped to be assigned to the IT department of the global oil company. However, I ended up at the administrative office of the medical department, where I had my first-ever experience with the internet.

Back then, internet access was facilitated through Netscape web browser, which was the dominant browser of its time. Netscape played a pivotal role in shaping the early internet landscape but eventually lost the "browser war" to Microsoft’s Internet Explorer, leading to a drastic decline in its market share, from 90% in the mid-90s to less than one percent by 2006.

This experience marked a significant milestone in my exposure to the digital world, where the internet was still emerging as a transformative technology.

Despite my experience, internet access was a luxury in Nigeria at that time. But internet penetration has since grown significantly to approximately 110 million Nigerian users as of recent statistics. The majority of Nigerians primarily access the internet through mobile devices.

While broadband access in Nigeria is reported to be increasing gradually, mobile devices continue to be the main access point for most internet users. This underscores the ongoing challenge of expanding robust broadband infrastructure to effectively serve all segments of the population, especially in rural and underserved areas where connectivity remains limited.

For Nigeria to fully realise its potential, there is an urgent need to significantly enhance broadband connectivity across the country. According to the Nigerian Communications Commission (NCC), mobile broadband currently accounts for over 99% of Nigeria’s broadband connections, primarily due to its affordability and convenience. This has led to a broadband penetration rate of 43.1%, with a concentration in urban areas where infrastructure is more developed.

To effectively leverage the nation’s broadband network, there must be a concerted effort to extend coverage to rural areas. Improved broadband connectivity in these regions not only fosters economic growth but also helps mitigate rural-urban migration by creating opportunities for local economic activities.

The National Broadband Plan (NBP 2020-2025) sets ambitious targets, aiming for 70% broadband penetration and 90% population coverage by 2025. However, achieving these goals will require overcoming significant challenges, including infrastructure limitations and financial barriers.

Operators continue to encounter significant challenges in developing Nigeria's broadband infrastructure. These challenges include security concerns, equipment theft, vandalisation, and particularly issues related to Right of Way licenses.

It's crucial for governments at all levels to recognise that access to reliable and high-speed internet connectivity is not merely essential for business and economic development but also a matter of human rights. Bridging the digital divide is essential to ensure consistent and affordable internet access for all Nigerians. A reliable, efficient, and affordable broadband connection would be transformational for Nigeria's small- and medium-scale businesses. It would enable them to compete globally.

Increased broadband connectivity can significantly contribute to Nigeria's GDP. While exact figures can vary depending on the methodology and data used, there are some general estimates and examples that provide insights into the potential impact. The World Bank has found that a 10% increase in broadband penetration can boost GDP growth by approximately 1.38% in low and middle-income countries. Applying this to Nigeria, based on its relatively large economy, the impact could be substantial.

According to a McKinsey report, expanding internet access in Africa, including Nigeria, could contribute up to $300 billion to the continent's GDP by 2025. Nigeria, being one of the largest economies in Africa, would likely see a significant portion of this benefit. Increased broadband connectivity can spur growth across various sectors such as agriculture, education, healthcare, and finance.

In agriculture, improved internet access can provide farmers with better access to market information, weather forecasts, and agricultural best practices, increasing productivity and incomes. For education, enhanced connectivity enables access to online learning resources and educational tools, improving skills and workforce readiness. Similarly, in healthcare, telemedicine and online health services can improve healthcare delivery, especially in rural areas, contributing to a healthier and more productive population.

The finance sector is not left out of this prospect. Greater broadband access can facilitate financial inclusion by enabling digital banking and mobile payment systems, boosting economic activity. Broadband connectivity can also foster innovation, entrepreneurship, and the creation of new businesses, particularly in the tech sector. This can lead to job creation and increased economic activity, further contributing to GDP growth.

The government can also improve services and efficiency. Improved broadband infrastructure can reduce corruption and improve governance, leading to a more conducive environment for economic growth. Last but by no means the least, broadband internet promotes social inclusion by connecting marginalised communities and giving them a voice. It enables individuals to access information, services, and opportunities that were previously out of reach. For women and young people, in particular, the internet can be a powerful tool for empowerment. It provides platforms for advocacy, education, and entrepreneurship, helping to break down social barriers and promote gender equality. Moreover, social media and online communities offer spaces for Nigerians to engage in discussions, share experiences, and mobilise for social change.

In all of this, rural connectivity must be a priority for Nigeria. Even advanced countries are making considerable efforts to continue improving rural broadband connectivity. In Canada, the government recognises this need and has made substantial investments in rural broadband internet expansion. One such initiative is the Universal Broadband Fund (UBF), launched in 2020, which is a cornerstone of Canada’s rural internet expansion strategy. With a budget of $2.75 billion, the UBF aims to connect 98% of Canadians to high-speed internet by 2026 and 100% by 2030.

The United States has also made some strategic investment and taken some initiatives amongst which are the American Rescue Plan Act (ARPA). Passed in 2021, ARPA allocated $10 billion specifically for broadband infrastructure. This funding is aimed at expanding access in underserved and rural areas, addressing the digital divide exacerbated by the COVID-19 pandemic. States and local governments have been given flexibility to direct these funds to meet their specific connectivity needs.

Additionally, the Rural Digital Opportunity Fund (RDOF), managed by the Federal Communications Commission (FCC), is a $20.4 billion initiative aimed at connecting rural homes and businesses to high-speed internet over the next decade. The fund supports projects that deliver robust and reliable internet services, prioritising areas with the greatest need. Also, the Infrastructure Investment and Jobs Act (IIJA), enacted in 2021, includes a historic $65 billion investment in broadband. This legislation focuses on extending high-speed internet to rural areas, making broadband more affordable, and improving the quality of existing networks. It includes $42.5 billion for the Broadband Equity, Access, and Deployment (BEAD) Program, which targets infrastructure projects in unserved and underserved areas.

These investments and initiatives reflect a comprehensive approach to closing the digital divide and ensuring that all Americans have access to reliable and affordable broadband.

The United Kingdom is not left out in the efforts to enhance broadband connectivity. The Rural Gigabit Connectivity Programme, launched by the UK government, aims to bring gigabit-capable broadband to the hardest-to-reach areas of the country. With an investment of £5 billion, the programme focuses on deploying full-fiber and gigabit-capable broadband infrastructure to rural communities, ensuring fast and reliable internet access.

The UK’s Rural Community Broadband Fund also provides grants to rural communities in England to help them improve broadband connectivity. This fund supports community-led broadband projects, including the deployment of wireless and fixed-line broadband infrastructure in areas where commercial providers may not operate. These initiatives reflect the UK's commitment to closing the digital divide and ensuring that rural communities have access to high-speed internet, thereby promoting economic growth, education, and social inclusion.

If advanced countries with already high broadband penetration rates continue to invest in their broadband connectivity, it is a clear indication that Nigeria needs to do more. With significant urban-rural disparities in internet access, the Nigerian government must embark on ambitious plans to expand broadband infrastructure to rural areas.

While the Nigerian government has its policies and programmes to increase broadband connectivity, such as the National Broadband Plan, there is still a long way to go. The Rural Broadband Initiative (RUBI), managed by the NCC, focuses on providing broadband infrastructure to rural and underserved areas. This includes deploying base transceiver stations (BTS) in rural communities, which are essential for enabling wireless broadband services.

In addition, the collaboration with the Universal Service Provision Fund (USPF) plays a pivotal role in funding and supporting broadband projects in rural areas. The USPF works with telecommunications operators to subsidise the cost of infrastructure deployment, making it financially viable to extend services to less profitable rural regions.

Moreover, recent reductions in fees for Right of Way licenses by state governments are a welcomed development. It will help to lower barriers to infrastructure expansion.

But despite these initiatives, their impact is yet to be significantly realised. More needs to be done to bridge the digital divide and ensure that all Nigerians, regardless of their location, have access to reliable and affordable internet services. This requires sustained investment, effective implementation of existing policies, and continued innovation to address the unique challenges faced by different regions and communities.

Broadband internet is indispensable for Nigeria's socio-economic transformation. Its potential impact spans all the economic growth sectors and education, healthcare, governance, and social inclusion. This underscores the urgent need for strategic investments and policies aimed at enhancing internet accessibility and affordability nationwide.  

As Nigeria embraces the digital revolution, ensuring widespread broadband connectivity becomes crucial in unlocking the full potential of the internet to drive sustainable development and uplift the quality of life for all Nigerians. In the words of Kofi Annan, former Secretary-General of the United Nations, "The Internet is the most powerful tool we have to improve education, healthcare, and overall development."

Let’s get it done!

Olajide Olutuyi, a Financial Nigeria Columnist, holds first degrees in Computer Science from the Federal University of Technology Akure (FUTA) and Management from the University of Lethbridge, Canada; an MBA from the Australian Institute of Business; and a certificate in Social Impact Leadership from University of California, Berkeley, Haas School of Business. He is an Instructor at Bow Valley College's Chui School of Business, Calgary and the Executive Director, Samuel Olutuyi Foundation. Email: Olajide@samuelolutuyifoundation.org.