Companies operating in Nigeria’s information and communications technology (ICT) sector got a total of N3.8 trillion credits from commercial banks in 2020. This represents a 31 per cent increase in facilities to the sector compared with N2.9 trillion recorded in 2019.
According to data released by the National Bureau of Statistics (NBS), this also represents 4.9 per cent of the total bank credits to the private sector in the year, which stood at N77.5 trillion.
Analysis of the quarterly credits to the sector showed that businesses in the sector got N912.5 billion in the first quarter of the year. In the second quarter, N955.7 billion credit was recorded, while the third-quarter figure stood at N961.3 billion.
The fourth quarter saw banks’ credits to the sector jumped to N1.01 trillion.
According to the NBS data, from the total N77.5 trillion credits extended to the private sector by the banks in 2020, oil & gas and manufacturing sectors got the lion share.
The two sectors received credit allocation of N14.9 trillion and N12.3 trillion, respectively to record the highest credit allocation as of the period under review. ICT came eighth on the cadre of sectors with the highest percentage of the total credit facility.
Meanwhile, the NBS data showed that ICT’s share of the banks’ non-performing loans stood at N112 billion as of December 2020. The NBS report showed that the sector’s bad debt rose by 38 per cent from N81.1 billion recorded in 2019. Total non-performing loans of the banks as of the end of 2019 stood at N1.2 trillion. Stakeholders in the ICT sector see technology as the next frontier for Nigeria’s economy after oil and gas.
They premised this on the fact that the sector’s contributions to the country’s Gross Domestic Products (GDP) have been on the increase year-on-year. Speaking at a forum held recently in Lagos, the Managing Director of Galaxy Backbone,
Mr. Yusuf Kazaure, said that funding was critical to the growth of the ICT industry, noting that despite the over $68 billion invested so far in the sector, there is need for more funding to bridge the existing infrastructure gap.
While pointing out that the current funding requirement could not be met by the private sector alone, stakeholders at the forum unanimously agreed that the industry needed multiple sources of funding, which include the capital market, bank loans, FDI, crowdfunding, and government intervention among others.
While calling on government to create an enabling environment to attract foreign investors, they urged the Nigerian Communications Commission (NCC) to deepen the conversation with the Central Bank of Nigeria (CBN) on the need to release a special intervention fund for the ICT industry to bridge the infrastructure gap.
The Minister of Communications and Digital Economy, Dr. Isa Pantami, also echoed this sentiment recently, noting that ICT had huge potential to double the GDP of oil and gas in the next two years with more funding.
The minister made this assertion based on NBS statistics, which showed that ICT’s contribution to the GDP was now near that of oil and gas.