A Correlational and descriptive study on the economic effect of telecommunication industry in Nigeria.

International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue V, May 2021 | ISSN 2454–6186

A Correlational and descriptive study on the economic effect of telecommunication industry in Nigeria

Justin .C. Alugbuo^1, Emeka Eze^2
1 & ²(Lecturers), Department of Economics, College of Management Sciences (COLMAS), Michael Okpara University of Agriculture, Umudike, Umuahia, Abia State, Nigeria.

Abstract
Given Nigeria’s continued preference for telecommunications services and a rise in teledensity, the Nigerian economy remains plagued by low growth, high unemployment, and high business costs and it is against this context, that this study used a dynamic descriptive analysis with the help of the covariance correlation technique to examine the economic effect of telecommunication industry in Nigeria. Empirical investigations on the effect of telecommunication industries operations in Nigeria were conducted based on the concerns raised in the literature review. Results showed that the percentage contribution of telecommunication to GDP, teledensity, and the Consumer Price Index positively influence the Nigerian economy more than foreign direct investment, while manufacturing value added negatively influences the Nigerian economy. The study concluded that, in order to achieve high and sustainable growth, governments and telecommunication industry stakeholders should closely monitor the trend of telecommunication, teledensity, and economic growth in order to formulate and implement policies that will checkmate the downward trend that causes economic growth distortions, and that policy formulations in the midst of other internal and external macro-economic shocks.

Keywords: Telecommunication. Teledensity, Percentage Contribution of Telecommunication

1.Background to the study and Statement of the problem
Unlike in the past, governments now consider telecommunications networks to be so essential to national interests and economic development that they were placed directly under their control in most countries until recently, when deregulation and competition were introduced (Lee, 2003). Telecommunications has ushered in a new era in the communication industry. The internet, cell phones, and computers have ushered in a radical change in communication habits and human relationships. The communication revolution has resulted in incredible technological, economic, cultural, and psychological changes. It has turned the whole world into a village by compressing time and space (Keil & Johnson, 2005, Offurum, 2009). These recent advancements in telecommunications technology have been critical in allowing information exchange to mature as a valuable commodity for the country’s transition to post-industrial and information-based economic development.

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