Advances in Management and Applied Economics

Impact of Economic Reform on the Nigerian Telecommunications Sector

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• Abstract

  In the early days of nationalization, it seemed axiomatic that price and quality standards could be better managed by State Owned Enterprises (SOE). Subsequent experience, however demonstrates that public ownership and control are different as the challenges of imposing effective public interests over nationalized enterprise had proved intractable. This study tests the causal and reciprocal relationships between investment in telecommunications and GDP during the transitional period between 1985 an 2003 in addition to the impact of the reforms on the performance of the firms in the telecommunications sector. The research reveals strong and positive relationship between economic reform and firms’ revenue and profit. The regression analysis shows that the telecommunications sector is statistically insignificant in explaining the GDP. Also, the impact of investment in telecommunications was found to be an insignificant predictor of GDP and vice versa even when the investment was lagged by one year. This paper recommends the provision of supporting infrastructure including electricity and the building of public data networks (PDNs) in concert with private telecommunications operators. The derailed privatisation of NITEL should also be concluded. Finally, the Nigerian Communications Commission (NCC) should address the issue of poor quality of service of the telecommunications service providers.