Nigeria: ICT Outstrips Oil and Gas in Nigeria's Economy - but Error in Minister's Comparison

Nigeria's information and communication technology (ICT) sector contributed more to gross domestic product than the oil and gas sector, Dr Isa Pantami, minister of communications and digital economy, claimed at a recent university convocation.

Pantami was reported to have said at the 26 October 2019 event that ICT made up 13.9% of Nigeria's GDP - more than the oil and gas sector's 8.8% share.

The minister made a similar comparison in September 2019 at the International Telecommunications Union conference in Hungary. He said the figures indicated that, in two years, ICT's contribution to Nigeria's GDP would be double the 8.8% of oil and gas.

His claim sounds like a win for the long-term plan to diversify Nigeria's economy. But is it backed up by evidence?

What is GDP?

The size of a country's economy is measured by its gross domestic product - or GDP. This is the value of all goods and services produced in a given period, usually a year.

It is given as either nominal or real GDP. Nominal GDP includes inflation, the increase in prices of goods and services over time.

Real GDP, on the other hand, presents economic growth with inflation removed. The International Monetary Fund explains that real GDP figures "allow us to see whether the value of output has gone up because more is being produced or simply because prices have increased".

ICT quoted in nominal GDP, oil in real GDP

The National Bureau of Statistics groups the following activities in Nigeria's ICT sector:

telecommunications and information services

publishing

motion picture, sound recording and music production

broadcasting

Africa Check contacted Pantami to ask if he was quoted accurately but we are yet to get a response.

Next we turned to Nigeria's bureau of statistics, which publishes GDP figures every three months. The most recent release covers the second quarter of 2019.

The data shows that the oil sector contributed 8.8% to Nigeria's real GDP in the second quarter. The ICT sector's contribution to real GDP was 14.6%.

In nominal terms - which include inflation - ICT contributed 13.9% to GDP, while oil and gas contributed 8.6%.

Contributions to Nigerian GDP in the second quarter of 2019

Sector Real Nominal

Information and communication technology 14.6% 13.9%

Oil and gas 8.8% 8.6%

Source: National Bureau of Statistics

Minister's comparison flawed

Pantami was correct to say that ICT contributed more to Nigeria's GDP than oil and gas. But he compared the ICT sector's contribution to nominal GDP with the oil and gas sector's contribution to real GDP.

Contributions to GDP shouldn't be compared that way, Baba Madu, head of the national accounts division at the National Bureau of Statistics, told Africa Check.

"Both the oil and ICT sectors must be expressed in either real or nominal terms for the sake of comparison of the GDP contributions," Madu said.

He added that "real GDP is a better measure of the economy" as it more accurately reflected growth.

'More productive activities in ICT than in oil'

Oil and gas contributed a lot more to government revenue than ICT, but GDP was a different ball game, Prof Chike Agu, who teaches economics at the University of Nigeria Nsukka, told Africa Check.

"GDP has to do with the total national output from all sectors," Agu said.

"The fact that the ICT sector is now contributing more to the GDP than oil shows that there are more productive activities in the ICT sector compared to what is happening in the oil sector."

Conclusion: Minister's numbers close but his comparison flawed

Isa Pantami, Nigeria's communications minister, claimed that the country's information and communication technology sector contributed 13.9% to the country's GDP, while the oil and gas sector contributed just 8.8%.

His figures are from the National Bureau of Statistics, but he compared a real GDP figure with a nominal GDP figure.

Experts recommend comparing only real GDP figures. These show that the ICT sector contributed 14.6%, while oil and gas contributed 8.8%.

We rate the claim as mostly correct, as it is not entirely accurate and requires clarification.

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