Pantami Hails ICT’s 14.07% Contribution to GDP

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Isa Pantami

•Despite pandemic, stock market gained N1.2tn in May

Goddy Egene in Lagos and Oghenevwede Ohwovoriole in Abuja

Minister of Communications and Digital Economy, Dr. Isa Pantami, has expressed satisfaction with the latest statistics released by the Nigerian Bureau of Statistics (NBS), which shows ICT has contributed 14.07 per cent to the country’s Gross Domestic Product in the first quarter of 2020.

The minister, in a statement at the weekend by his Technical Assistant in charge of Information Technology, Dr. Femi Adeniyi, said: “The Minister of Communications and Digital Economy, Dr. Isa Pantami, is delighted to hear of the growth of ICT’s contribution to Nigeria’s GDP in the first quarter of 2020 (Q1 2020). The National Bureau of Statistics (NBS) released Nigeria’s Gross Domestic Product Report for Q1 2020 on May 25, 2020.

“The report observed that the country’s GDP grew by 1.87 per cent (year-on-year) in real terms in Q1 2020. The non-oil sector contributed 90.50 per cent to the nation’s GDP in Q1 2020 as opposed to the 9.50 per cent contributed to the total real GDP by the oil sector.

“It is noteworthy that the ICT sector contributed 14.07 per cent to the total real GDP in Q1 2020, higher than its contribution a year earlier (13.32 per cent) and in the preceding quarter, in which it accounted for 13.12 per cent. This contribution is unprecedented,” the statement said.

The minister noted that the growing contribution of the ICT sector to the GDP is a direct result of the focused and committed effort of the administration of President Muhammadu Buhari.

He added that the strategic policy directions of the federal government include the inclusion of the digital economy in the mandate of the ministry, the unveiling and implementation of the National Digital Economy Policy and Strategy and the National Broadband Plan, amongst others.

According to him, “the COVID-19 pandemic has shown how critical the ICT sector is to the growth of our country’s digital economy and by extension, the general economy.”
The minister called on all sectors to take advantage of the federal government’s new focus on the digital economy to enable and improve their processes through the use of ICTs, saying that it would enhance the output of all the sectors of the economy and boost Nigeria’s GDP.

Despite Pandemic, Stock Market Gained N1.2tn in May

Meanwhile, the Nigerian stock market gained N1.171 trillion in May, despite the impact of the COVID-19 pandemic, representing a growth of 93 per cent compared with the N604 billion recorded in April.

Also, the market, measured by the main index, the Nigerian Stock Exchange (NSE) All-Share Index rose by 9.7 per cent up from 5.3 per cent recorded in April.

The market had dipped by 20.6 per cent in the first quarter of 2020 and a positive performance was not envisaged at the beginning of the second quarter (Q2) given the COVID-19 pandemic that has impacted negatively on the global economy.

But the Nigerian market recovered N604 billion in April contrary to the expectation of further decline due to the economic lockdown as a result of the COVID-19, and a further N1.171 trillion gain posted in May, showing that in the two months of Q2, the market gained N1.775 trillion.

Market statistics obtained by THISDAY showed the market capitalisation of the NSE rose from N11.997 trillion at the beginning of May to N13.168 trillion at the end of the month. This shows a growth of N1.171 trillion.

The NSE -ASI appreciated from 23,021.01 to 25,267.82, showing a growth of 9.7 per cent in May as against 5.3 per cent growth the previous month.

Stock market operators and analysts said while there had been uncertainties brought by COVID-19, the stock market had shown resilience as some investors reacted to some positive developments in the capital market community.

According to them, the stock market has remained open for trading electronically.

There have also been some positive corporate actions while the announcement of a substantive director general and executive commissioners for the Securities and Exchange Commission (SEC) boosted investor hope, hence the significant improvement recorded in May.

The Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Onyenwechukwu Ezeagu, said the pandemic had not taken away the level the market has attained in terms of technology and ability to reach out to customers.

“The operators have been prepared for a situation where customers are connected online real time and we have been engaging in virtual trading. Remember that in some years past we were all subjected to a rigorous set of minimum operating standards, so this period only served to put our potentials into real test and our members were equal to the task, which is evident in the fact that trading was never disrupted by the lockdown,” Ezeagu said.

A stockbroker and Managing Director of Network Capital Limited, Mr. Oluropo Dada, said the business continuation framework activated by the NSE by deploying digital channels to support remote trading was embraced by the traders.

Dada said: “Everything worked seamlessly to the advantage of the market. The Q1 results of those big banks that provide over 65 per cent of the trading activities in the sector were released to the market and those results compared favourably with the historical records, meaning that those banks are still creating values. Also, the dividend declared for 2019 financial years were paid by major banks during the month, thereby providing liquidity to the shareholders and by extension to the market.”

In the opinion of Senior Equity Research Analyst at Cordros Capital, Mr. Mustapha Wahab, the market is now in a stronger condition than at the beginning of this COVID-19 episode.

“In other words, the panic element has eased significantly. There have been a few developments over the recent past weeks, which I believe provide respite for investors.

“For one, Nigeria received the International Monetary Fund (IMF)’s approval for $3.4 billion (N1.2 trillion) loan request. The approval came earlier than expected and is the IMF’s largest COVID-19 emergency financing provided to-date. While the loan will do little to address the significantly stressed balance of payment condition, it sure will provide some notable support to the 2020 budget in a year where government spending is necessary,” Wahab said.

According to him, the positive results posted by some companies in the Q1 of 2020 and dividend announced by some for 2019 financial year also impacted the growth recorded.

“On the corporate side, we have seen some fairly impressive first quarter results thus far. The cumulative banks’ earnings that have been published to-date show earnings growth of eight per cent, with core income lines and asset quality fairly strong. For consumer goods companies, we like the fact that Nigerian Breweries Plc maintained revenue at last year’s level, even though profit was weaker (owing to high operating expenses). “As expected, MTN Nigeria Communications Plc delivered strong numbers, driven by strong growth across revenue lines,” Wahab explained.

Companies such as BUA Cement Plc had declared a dividend of N1.75 per share.

Last week, 11 Plc recommended a dividend of N8.25 per share while Dangote Cement Plc declared a dividend of N1.10 per share.

Berger Paints Nigeria Plc also recommended a dividend of 25 kobo.