ICT raises its contribution QoQ but reduces YoY
By Jeph Ajobaju, Chief Copy Editor
Information and Communications Technology (ICT), led by the telecom sector, made 15.97 per cent contribution to real Gross Domestic Product (GDP) growth in the third quarter of the year to September (Q3 2023), according to the National Bureau of Statistics (NBS).
NBS figures show the contribution is higher than the 15.35 per cent in Q2 2023 but less than the 19.54 per cent in Q3 2022.
ICT is segmented into four components – Telecommunications and Information Services, Publishing; Motion Picture, Sound Recording, and Music Production; and Broadcasting.
The NBS said the ICT sector grew 6.69 per cent in Q3 2023 year on year (YoY) in real terms, driven largely by activities in the telecom sub-sector, which contributed 13.5 per cent to real GDP, followed by broadcasting with 1.39 per cent.
There was a decrease of 3.84 percentage points from ICT contribution in Q3 2022.
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ICT contributes nearly 12% to nominal GDP
ICT contributed 11.57 per cent to total Nominal GDP in Q3 2023, higher than the 9.58 per cent in Q3 2022, but lower than the 14.83 per cent in Q2 2023, per The Guardian.
“On a quarter-on-quarter, the sector exhibited a growth of -10.30 per cent in real terms.
“Of total real GDP, the sector contributed 15.97 per cent in the 2023 third quarter, higher than in the same quarter of the previous year in which it represented 15.35 per cent and lower than the preceding quarter in which it represented 19.54 per cent,” the NBS added.
Nigeria’s tax-to-GDP ratio shoots up to 11%
Tax-to-GDP (Gross Domestic Product) ratio rose to 10.86 per cent in 2021, as contained in a letter federal Statistician General Adeyemi Adeniran wrote to the Federal Inland Revenue Service (FIRS) dated 25 May 2023.
Tax-to-GDP ratio is a measure of a country’s tax revenue relative to the size of its economy as measured by the GDP.
Nigeria’s tax-to-GDP ratio hovered between 5 per cent and 6 per cent in the 12 years before 2021.
The new 10.86 per cent ratio followed a joint review of 2010 to 2021 data by the NBS, the FIRS, and the Ministry of Finance, according to a statement issued by Johannes Wojuola, Media Adviser to then-FIRS Chairman Muhammad Nami.
“The revision took into account revenue items hitherto not previously included in the computations; particularly, relevant revenue collected by other agencies of government,” the statement quoted Nami as saying.
Adjusted calculation of tax-to-GDP ratio
Nami explained sources which previously put tax-to-GDP ratio at between 5 per cent and 6 per cent did not consider tax revenue accruing to other government agencies in their computation.
He listed the revenue collection agencies excluded to include the Customs and state Internal Revenue Services.
“In order to correctly state the tax-to-GDP ratio, the FIRS initiated a review and re-computation of the ratio for 2010 to 2021,” he said.
“In re-computing the ratio, key indicators that were previously left out were taken into account. This resulted into a revised tax-to-GDP ratio of 10.86% for 2021 as against 6% hitherto reported.
“It is important to note that the tax-to-GDP ratio for Nigeria should be higher, but for the impact of tax waivers contained in our various tax laws (including exemptions to Micro, Small and Medium Enterprises brought-in by Finance Act, 2019), low tax morale, leakages occasioned by the country’s fragmented tax system and the impact of the rebasing of the GDP in 2014.”
Nami urged the government to consider reviewing policies on tax waivers raise revenue to executive programmes and positively move the needle of tax-to-GDP ratio.
