IMPACT OF TELECOMMUNICATION INFRASTRUCTURE ON ECONOMIC GROWTH IN NIGERIA

Abstract

This study examines the impact of telecommunication infrastructure on economic growth in Nigeria from 2001 to 2022, grounded in the endogenous growth theory. Unlike previous studies that rely on monetary proxies, this research constructs a composite telecommunication infrastructure index with the aid of Principal Component Analysis (PCA), incorporating key variables, which include fixed broadband subscriptions per 100 persons, mobile cellular subscriptions per 100 persons, and secure internet servers per one million persons. This multidimensional index offers a more accurate representation of infrastructure utilization and quality. The study utilizes the Autoregressive Distributed Lag (ARDL) bounds testing technique to explore both short-term and long-term relationships, given the mixed order of integration among variables. The empirical results indicate that, in the long run, telecommunication infrastructure has a marginally positive impact on the Nigeria economic growth, but its effect is statistically insignificant and below its potential , and it exerts a negative and statistically significant impact on economic growth in the short run. These findings suggest that operational inefficiencies occasioned by poor rural network service penetration and network infrastructure vandalism undermine the short-term benefits of telecom investments. However, with sustained long-term investment and policy reforms, the sector holds potential for growth-enhancing effects. Policy implications include; prioritizing telecom infrastructure as a critical national asset, expanding rural internet access, and enhancing regulatory frameworks by harmonizing the right-of-way federal and state charges to promote private sector participation and digital inclusiveness.