The Contribution of the Communication Sector to Economic Development in Nigeria
Chapter One
Chapter Three
RESEARCH METHODOLOGY
Introduction
The research utilizes a quantitative approach to investigate the contribution of the communication sector to economic development in Nigeria. Gross Domestic Product is used as a proxy for Economic development in Nigeria. While the independent variables shall be Teledensity, Telecommunication Sector Revenue and Investment in Telecommunication Sector. Secondary data were employed to conduct this empirical analysis. The data were sourced from National Bureau of Statistic (NBS), Central Bank of Nigeria (CBN), Statistical Bulletin, Nigeria Communication Commission (NCC) and corroborated by data from World Trade Organisation (WTO) and World Bank Development Indicator.
Theoretical Framework
As mentioned above, we employ the endogenous growth theoretical framework an augmented Robert Solow growth model, developed in Estache et al. (2005) and cited by Prof. Risikat O.S. Dauda, 2019 inaugural lecture, as the theoretical framework to organize our analysis of the contribution of the communication sector to economic development in Nigeria context. The model builds on that proposed by Solow (1957) and further developed by Mankiw, Romer and Weil (1992), and includes the accumulation of human as well as physical capital to explain the impact of communication on economic in Nigeria. In addition, the model introduces an infrastructure index (Inf Inx hereafter) in the production function. As in the Estache et al. (2005) paper, the Solow growth model used here relies on a Cobb-Douglas production function with labor augmenting technological progress, human capital and the infrastructure index.
The Solow (1957) approach of the growth accounting equation can be used to capture the factors that account for the growth in total output. According to Solow’s growth accounting concept, the growth rate of total output depends on the growth rate of capital and labour weighted by their shares of income plus the level of technological progress. Robert Solow provided the most basic version of the neoclassical theory of growth. The center piece of the model is the production function
CHAPTER FOUR
DATA PRESENTATION, MODEL ESTIMATION AND INTERPRETATION OF RESULTS
Summary of the Ordinary Least Square Regression Result
From the regression result, Economic Growth was the dependent variable proxy by Gross Domestic Product while Teledensity (TELD), Telecommunication Sector Revenue (TSR) and Investment in Telecommunication Sector (INVT) Agricultural sector, unemployment and Electricity Consumption were the independent variables. The regression results obtained were presented in the table below
Policy Implications
From the ongoing presentation and analysis of results, it was revealed that Teledensity had insignificant impact on Gross Domestic Product in Nigeria. This implied that an increase in Teledensity brought about increase in Gross Domestic Product. Hence, increase in economic growth in Nigeria. Furthermore, the result also revealed that Telecommunication Sector Revenue had insignificant impact on Gross Domestic Product in Nigeria. This implied that an increase in Telecommunication Sector Revenue led to increase in Gross Domestic Product. Hence, increase in economic growth in Nigeria. Lastly, the result showed that Investment in Telecommunication Sector had significant impact on Gross Domestic Product in Nigeria (See for instance, Snežana, Zoran, Zorana, 2019; Amavilah, Asongu, Andrés, 2017). This implied that an increase in Investment in Telecommunication Sector also resulted to increase in Gross Domestic Product. Hence, increase in economic growth in Nigeria.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was the contribution of the communication sector to economic development in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of contribution of the communication sector to economic development in Nigeria
Summary
This study was on the contribution of the communication sector to economic development in Nigeria. Three objectives were raised which included: what are the challenges faced by government in the administration of the communication industry, what is the role of the communication sector in economic development and what are the problems facing both private and government investors in the industry. In line with these objectives, research questions and research hypotheses were formulated and null hypotheses were posited.
Conclusion
Economic development in Nigeria is principally a function of variation in some macroeconomic fundamentals. There is need for a macroeconomic environment that will encourage telecommunication industry and foreign direct investment in order to enhance growth in Nigeria. The outcome of the empirical and stochastic investigations shows that Telecommunication Infrastructural Development has a positive relationship with output growth in Nigeria (See Ayse et al., 2016; Mohammed, & Sulong, 2017).). The impact is of a higher magnitude. The introduction of Global System for Mobile telecommunication (GSM) led to 17 percent rise in the output growth. The use of mobile phones in Nigeria has become very useful for individuals and industries in both the urban and rural areas.
Therefore, the output of industries has increase and the life of many Nigerians improved within the era of improvement in telecommunication industry. The demand side of electricity is determined by the amount of energy supplied. This is why we have contrary result to a priori expectation of the parameter for electricity consumption. On the side of the degree of trade openness, Nigeria is still a developing nation that needs a mild check on the nature of openness which her infant industries face. There is need to checkmate the trend of unemployment as it impacts negatively on economic growth in Nigeria. Telecommunications can aid sustainable economic development when used appropriately, with the full participation of all stakeholders in the developing economies. The intrinsic value of telecommunications does not lie in easing communications and information, but in enabling growth and development. In a country like Nigeria, where a vast section of the population is below the poverty line, telecommunications offer a chance to empower the residents and transform them into more productive human capital.
Recommendation
Based on findings and conclusions presented above, the paper recommends that government should expand tele-density and directly make telephone communications cheap and accessible through granting more licenses to GSM operators in order to allow for healthy competition among the GSM operators (See Wamboye, & Sergi, 2019; Wamboye, Adekola, & Sergi, 2016; Song, 2015). In addition, the interests of the consumer of telecommunication services are protected by promoting competitive pricing of such services and combating the abuse of market power. The government should provide non-monetary incentives including the funding of the development of other infrastructure particularly electricity. To encourage rural telephony, the government should consider providing further concessionary fiscal incentives to investors who are willing to commit resources to the marginally profitable areas. The development of rural telephony will greatly assist growth of employment and incomes. The outcome of our study shows that investment in telecommunications infrastructure have direct and indirect linkage to economic growth. This is corroborated by the works of Anyasi and Otubu (2009) and Osotimehin et al. (2010).
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