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Nigeria’s ICT Growth: Why 31.6% Isn’t What It Seems

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Nominal vs. Real Growth: Why Nigeria’s ICT Growth Isn’t As Impressive As It Seems

Nigeria’s ICT sector appears to be booming based on recent data, but a closer look reveals a more nuanced reality. The National Bureau of Statistics (NBS) reported a 31.6% nominal GDP growth for the sector in the first quarter of 2025. However, after adjusting for inflation, the real growth rate shrinks to a much more modest 5.43%. This significant difference highlights the importance of understanding the distinction between nominal and real growth, especially in an inflationary environment like Nigeria’s.

Understanding the Numbers

The key difference lies in how each metric is calculated. Nominal GDP reflects the current market prices, meaning that increases in the cost of ICT services and products, such as data tariffs, mobile phones, and subscription fees, directly inflate the nominal GDP figure. Real GDP, on the other hand, adjusts for these price changes, providing a more accurate reflection of the sector’s actual productivity and output. In Nigeria’s case, with inflation rates hovering above 30%, the nominal growth figure largely reflects the impact of rising prices rather than substantial gains in actual output within the ICT sector.

In conclusion, while a 31.6% nominal growth rate sounds impressive, the real growth rate of 5.43% paints a more realistic picture of the ICT sector’s performance. The disparity underscores the need to consider inflationary pressures when evaluating economic growth, particularly in emerging markets like Nigeria, where fluctuating prices can significantly distort nominal figures. The ICT sector is growing, but the numbers suggest that a significant portion of that growth is simply keeping pace with, and not outperforming, inflation.

Keywords

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