The Contribution Of The Communication Sector To Economic Development In Nigeria

Project and Seminar Material for Economics

Project and Seminar Material for Economics


The research examines the contribution of communication sector to economy development in Nigeria. The qualitative and quantitative evidence related to allocative and productive efficiency of NITEL in the wake of its commercialization and deregulation in 1992. The communication industry has expanded in terms of increased availability of telecommunication facilities, improved services, low can completion rate, Global system Mobile (GSM) etc.

The meaning, objectives, concepts and structural phases of communication industry was thoroughly examined. In line with this, other relevant concepts necessary to enhance the strength of communication industry on Nigeria economy were discussed.

The arithmetic data’s collected were analysed and interpreted using the chi-square method.

The study recommends that the greater private sectors participation will strengthen the reform efforts of telecommunication sectors.

The private sector should try and reduce their costs so that the efforts made by the government in order to provide accessibility will not be defeated by high cost.

Chapter One

1.0 Background Of The Study

A more 100 years ago, people and news traveled by sailing ship, so that it took months to communicate across various part of the world. Advances in the first 60 years of the twentieth century speed up both -communication and travel in the past three decades, the pace of change in communication technology has accelerated.

The world has witnessed a, communication revolution that has drastically changed the way business decisions are made and implemented.

Three decades ago, telephone links were laboriously and unreliably connected by operators, satellite were just being. discovered, photocopying and telecopying were completely unknown, mail was the only way to send hard copy, and getting it to overseas destination often took weeks, computer were in their infancy, and jet were just beginning to replace the much slower and less reliable propeller air craft.

Today/direct dialing is available to most parts of the world, at a fraction of what long distance cells cost 30 years ago facsimile, satellite links, fast jet travel, computer networks, cheap courier services, internet, E-mail, mobile cellular and a host of others have made communication reliable and often instantaneously available through’ out ‘the world. This revolution in the communication industry has been a major contribution to the development of what has become known as the global village which Nigeria is still struggling to be part of communication according to the Oxford Advanced Learners dictionary (Special Price Edition) is the act of passing messages across, making things known or expressing ones feeling through a means.

Effective communication, network is the bedrock of any nation. Effective communication network is helps in speeding up various economic activities such as trade, information network, security, banking and other business transaction which has in all aided competition, industrialization and improved technology which also increases the Gross National product (GNP) of nations

communication also aids distributive, channel, as it is a known fact that: production is not complete until goods and services produced reached the final consumer. For- this to be accomplished good and effective communication network is needed.

The Nigeria communication industry is divided into 3 sub-sectors mainly, Nigeria telecommunication Limited (NITEL), Nigeria postal service (NIPOST) Nigeria Mobile Telecommunication (M-tel) with a regulatory body known as Nigeria Communication Commission (NCC all of which are managed and controlled by Nigeria government.

The 1998 decree of October 25 on privatization and commercialization of government establishment gave room for the privatization and commercialization of government of which the Nigeria communication industry is none.

Communication industry in Nigeria had one of its sub-sectors commercialized that is, NITEL while all other sectors such as NIPOST and NITEL were deregulated in 1992.

According to the decree, privatization is the sale of, government owned share to the general Public’ or private sector while commercialization the removal of government subsidy in the public sector so that such organization is left to operate as profit making organization, recently the NITEL, and M-TEL, which are sub-sectors of the communication industry in Nigeria, is now being privatized.

The Nigeria telecommunication Limited (NITEL) is a public telecommunication operator it’s responsibilities include, providing basic network facilities to- all, parts of the’ country, and administering the national network; and carrying on functions of national carrier .

Other services include facsimile and other high speed network.

The Nigeria Mobile Communication Limited (M-TEL) which was caved out of NITEL in 1996 [provided only mobile telephone services.

The Nigeria Postal Services (NIPOST) is a national carrier of all classes of mail items for delivery b6th within and outside Nigeria. i Other services provided include courier service and retailing, Advertisement using bill board, Agency Services, offering of central workshop etc Lastly, Nigeria Communication Commission (Nee). This body regulates the activities of Nigeria communication industry.

Communication network being a facilitator of economic development has slow manifestation on the Nigeria economy. This is due to the problem being faced by the government in the industry and this include foreign exchange constraint poor management of available infrastructures, poor network distribution and poor management of the sector and under capacity. The Nigeria communication industry add to its credit 700,000 installed capacity out of which 450,00 lines are connected, this is below the recommended teledensity of act lease I telephone to a hundred people, This implies that with a population of about 120 million people needs to provide at least 1.2 million telephone lines out of which 0.45 teledensity has been provided. This means that 700,000 more liens at lease is required to meet the required it’s recommendation, it is in this bid that the Nigeria government has adopted for privatization of telecommunication sector of the communication industry.

1.1 Statement Of Problem

Communication network is no doubt a facilitator in economic development, but certainly it has slow manifestation on the Nigeria economy, the need to accelerated to meet the recommended ITU minimum of one telephone per 100 person is now of primary concern for all developing nations like Nigeria, to accelerate pace of development there is need to identify factors that has necessitated the slow pace of development.

1.2 Aim And Objectives Of The Study

The aim of this study is to appraise the contribution of communication sector in the economic development in Nigeria with the following objectives;

  1. To evaluate the problems faced by government in the management of the communication industry.
  2. To examine the prospect of private investors in the industry. “,
  3. To suggest solutions to the problem facing both government and private investors in the industry.
  4. To evaluate the’ role of the communication industry in economic development.

1.3 Significance Of The Study

The research work is meant for the people, government and it’s agencies and international community.

A lot of people are not aware of what privatization itself entails. They are also not aware of what is happening in the communication industry as it affects economic development and the effect of privatization of the communication industry on economic development of the country.

But however, by the completion of this research work, people will be aware of all these and will be adequately informed.

To the government, it will enable them see the problems affecting them and private sector in the communication industry and this will help them in policy for this research will give them an insight as to how’ to be informed.

And finally, to the international institution, this research will give them an insight as to how the Nigerian government intends to privatize the communication industry to move towards globalization.

And ‘also it makes, them in coining to’ invest ill the Nigerian communication industry.

1.4 Hypothesis

Hypothesis I

  • Ho: privatizing the telecommunication industry in Nigeria will not enhance economic development.
  • HA: privatizing the telecommunication industry in Nigeria will enhance economic development.

Hypothesis II

  • Ho: The government has failed in the management of communication industry.
  • HA: The government has succeeded in the management of communication industry.

Hypothesis III

  • Ho: Communication network is a catalyst to economic development in Nigeria?
  • HA: Communication network is not catalyst to economic development in Nigeria?

1.5 Method Of Research

The research method adopted in the course of this study is the secondary source of data. This implies the use of published texts, journals, seminar and other relevant literatures.

Primary data such as the use of questionnaires and personal interview is adopted, data gathered for this research work is analysed using the inferential method i.e. chi-square technique. This technique has been chosen since it is the best method to test relationship descriptive method is also adopted as in the use of percentages. Data gathered for this research work will be classified into response from private investors (intercellular) customers and Nitel staffs.

1.6 Scope Of The Study

The scope of this research work will cover the operations of the Nigerian communication industry in the face of government operation and also private participation.

This research work has been limited to the Telecommunication aspect of communication industry since it is the only sector-being stated for privatization. However, this is not to say that all other aspect of communication is neglected completely.

1.7 Limitation Of The Study

The limitation of this research work is also based on the fact that the communication industry in Nigeria has been a government parastatal and this has probably been the reason why there are not much write up on the subject matter.

The movement of the government establishment from Lagos to Abuja has also hindered the effectiveness of this research work.

1.8 Definition Of The Terms


Is the act of making things known or passing messages across through a means.


To sell an organization industry or service that was previously owned controlled by a government.


The process or business of sending and receiving message by telephone, ratio and television.

Mobile Phone:

A phone that you can carry with you and use in anyplace.


An exact copy of a picture, pieces of writing formal a (FAX).


A machine that has been sent into space and goes around the Earth, Moon etc used for radio, television and others electronic communication.


To make .a photographic copy, especially of something printed, written or drawn.


A system that allows people to, send messages to each other by computer.


Nigeria postal service is a national carriers of all classes of mail items for delivery both within and outside Nigeria.


Nigeria telecommunication Limited IS a public telecommunication operator it’s provide basic network facilities to all part of the country e.g. facsimile and the high speed network.

1.9 Plant Of The Study

This research work will be divided into five chapters.

Chapter one will comprise of the general introduction and also problem of the study, aims and objectives of the study, significant of study, hypothesis, method of research, scope of study, limitation of study, definition of terms and plan of study.

Chapter two will comprise of general literature review on communication and privatization from secondary sources of data.

Chapter three comprise of historical background of Nigeria telecommunication sector, its role, role of privatization in the telecommunication industry. The Nigeria telecommunication as it affects private investors, the role of private investors in the industry, an overview of privatization in Nigeria, operations of intracellular Nigeria limited and comparison between government owned telecommunication and private telecommunication.

Chapter four will comprise data presentation, analysis and evaluation of the performance of intercellular Nigeria limited. Lastly chapter Jive will entail findings, solution, conclusion and recommendations.

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