In 2024, Africa’s tax revenue was capped at around US$320 billion. The mobile industry (phones and other communication gadgets) contributed a substantial amount to the public sector, having earned over US$30 billion in taxes. The contribution was largely driven by handset VAT, sales taxes, and excise and customs duties, which brought in US$12 billion.

The Global System for Mobile Communications Association, GSMA, revealed that this fiscal contribution of the mobile ecosystem represented 9.8 percent of the total tax revenue in the region. From the analytics given, the mobile industry boomed because it had a more efficient system of ensuring tax collection. From the calls made to the data consumed in browsing the internet, these are ways by which the mobile industry generates its revenue. 

Nigeria’s mobile telecommunications industry is responsible for a large part of this continental revenue. The industry generated a total service revenue of US$7.6 billion, which is over 42 percent of the continental revenue, according to Financial Trust, recognising the country as a leading contributor on the continent. Along with South Africa, Kenya, and Egypt, the nation is one of the countries showing a consistent growth rate for telecom revenue in Africa.

Through digital payments and mobile money, which is particularly relevant in developing countries in Africa, like Nigeria, where large segments of the economy are informal, we have been able to stay consistent in the mobile industry. 

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The telecommunications sector consistently makes a high contribution to Nigeria’s Gross Domestic Product (GDP), which was capped at around 14-14.58 percent in early 2024. Top contributors have been shown in the country to gain. For example, MTN Nigeria’s service revenue alone grew to ₦3.36 trillion in 2024. The mobile money also showed consistent revenue, processing transactions worth ₦71.5 trillion in 2024. 

Although high compliance tax costs are a main barrier, which prevents individuals and small and medium-sized enterprises (SMEs) from paying taxes, the government reduces friction and improves compliance rates by ensuring that Nigerians pay direct tax on digital consumables such as mobile calls and data bundles.

The trade association’s report also observed that in 2024, mobile technologies and services generated 7.7 percent of Gross Domestic Profit (GDP), across Africa, a contribution that amounted to US$220 billion of economic value added.

The growth in tax revenue has also positively impacted other sectors, such as the employment sector. While there is no official data for an increase in employment rate in Nigeria, the report revealed that mobile operators and the wider mobile ecosystem provided direct employment to approximately five million people in Africa in 2024. In addition, economic activity in the ecosystem generated around three million jobs in other sectors, meaning that around eight million jobs were directly or indirectly supported.

These make the sector remain an important part of the national economy and the continental economy, with Nigeria holding a large share of contributions. 

Meiza Nigeria