Nigeria has undergone a significant transformation in its telecommunications sector over the past two decades, moving away from its heavy reliance on fixed telephones. With the deregulation of the telecoms industry in 2001, the country experienced rapid growth in the number of telephone lines, skyrocketing from 18,724 in 1960 to over 220.72 million connected lines as of August 2023. This growth has been fueled by the proliferation of mobile devices, which have enabled digital transformation and socio-economic progress for many Nigerians.
However, despite the increasing demand for phones, Nigeria still heavily relies on imports to meet its mobile connectivity needs. According to data from the International Trade Centre, the country spent a staggering $2.35 billion on telephone importation between 2019 and 2021. This heavy dependence on imports has hindered the development of a local phone manufacturing industry, as local manufacturers have struggled to compete with the competitively priced devices from Asian Original Equipment Manufacturers (OEMs) that dominate the Nigerian market.
Transsion Holdings, the company behind popular brands like Tecno and Infinix, currently holds a commanding 66% share of the Nigerian smartphone market. Chinese brands, in particular, have a strong presence, with over 300 approved models for sale in the country. While the affordability of Asian phones has contributed to increased phone ownership in Nigeria, it has also hindered the growth of local manufacturing.
The issue is further compounded by taxation and duty fees, which add an additional 10 to 30% to smartphone costs in Africa. This makes locally manufactured phones more appealing, if available. However, the lack of a local manufacturing outfit in Nigeria exacerbates this problem, hampering the country’s ability to reduce its reliance on imports.
To address this challenge, Nigerian stakeholders must prioritize the development of a local phone manufacturing industry. Doing so would not only decrease the country’s dependence on imports but also create employment opportunities and stimulate economic growth. By investing in local manufacturing capabilities and supporting domestic manufacturers, Nigeria can foster a competitive industry and gain greater control over its mobile connectivity needs.
As Nigeria continues to experience a rise in mobile adoption and increased demand for phones, it is crucial for the country to take concrete steps towards establishing its own local phone manufacturing industry. By doing so, Nigeria can strengthen its economy, reduce its reliance on imports, and solidify its position as a key player in the global telecommunications market.
FAQ
What has contributed to Nigeria’s growing demand for phones?
The proliferation of mobile devices has driven the increasing demand for phones in Nigeria. The country has experienced a significant shift from fixed telephones to mobile devices over the past two decades.
Why does Nigeria heavily rely on imports for mobile connectivity?
Nigeria’s heavy reliance on imports for mobile connectivity is due to the lack of a local phone manufacturing industry. The affordability and competitiveness of devices from Asian Original Equipment Manufacturers (OEMs) have made it difficult for local manufacturers to gain a foothold in the market.
Definitions
Fixed Telephones
Fixed telephones refer to traditional landline telephones that are connected to a specific location with a physical line.
Mobile Devices
Mobile devices are portable electronic devices that allow for wireless communication, such as smartphones and tablets.
Local Phone Manufacturing Industry
The local phone manufacturing industry refers to the production of mobile devices within Nigeria, reducing the country’s dependence on imports.
Asia Original Equipment Manufacturers (OEMs)
Asia Original Equipment Manufacturers (OEMs) are companies based in Asia that design and manufacture electronic devices, including smartphones, for sale under various brands.
Sources: International Trade Centre
The source of the article is from the blog tvbzorg.com