Digital economy’s share of Nigeria’s GDP falls to 11.8% in Q3 2025 as landmark bill poised to transform sector

Nigeria’s digital economy contributed 11.8 per cent to the country’s real Gross Domestic Product (GDP) in the third quarter of 2025, reflecting a drop from the 14.4 per cent recorded in the previous quarter, according to fresh figures released by the National Bureau of Statistics (NBS).

The latest data, published on Monday, shows that the sector generated ₦6.7 trillion out of Nigeria’s total real GDP of ₦57 trillion during the period under review, underscoring its continued role as one of the country’s most influential economic engines despite the recent dip.

The digital economy—comprising the Information and Communication (I&C) and Financial Institutions (FI) sectors—has for years been a major pillar of Nigeria’s growth, driven by telecoms operators, a growing digital services landscape, and sustained expansion within the banking industry.

However, the third quarter slowdown comes at a time of broader economic tightening. Nigeria’s real GDP grew by 3.98 per cent in the quarter, slightly below the 4.23 per cent posted in the second quarter but marginally higher than the 3.86 per cent recorded in the same period of 2024.

Telecoms and Financial Services Lead but Slip in Output

A closer look at the I&C sector, which includes telecommunications, publishing, sound and media production, and broadcasting, shows that it contributed 9.1 per cent to real GDP in Q3 2025. This marks a noticeable decline from the 11.8 per cent recorded in the second quarter. In monetary terms, the sector contributed ₦5.2 trillion, down from ₦5.72 trillion in the previous quarter.

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Telecommunications once again dominated the sector, accounting for ₦4.4 trillion, representing 84.5 per cent of the I&C’s output. Broadcasting followed with ₦430.7 billion, while sound and media production contributed ₦379.2 billion. Publishing remained the least contributor with ₦9 billion, amounting to just 0.1 per cent of the sector’s share.

Despite the quarter-on-quarter decline, the I&C sector recorded a year-on-year growth rate of 5.78 per cent, driven largely by increasing digital consumption, expanding mobile services, and growing reliance on online platforms for entertainment, information, and commerce. The sector’s Q3 output was higher than the 8.95 per cent contribution recorded during the same period in 2024, reinforcing its long-term upward trajectory even in the face of short-term fluctuation.

The Financial Institutions sector, which includes banks and insurance companies, contributed 2.7 per cent to real GDP in Q3 2025, translating to ₦1.5 trillion. This is lower than the ₦1.75 trillion contributed in the second quarter, when the sector accounted for 3.23 per cent of GDP. Financial institutions contributed ₦1.3 trillion—86.7 per cent of the FI sector’s output—while insurance companies generated ₦190.6 billion.

Although the quarter-on-quarter numbers reflect a slowdown, the sector’s year-on-year growth was far more robust. It expanded by 19.63 per cent compared to its performance in Q3 2024, when it contributed just 2.30 per cent to real GDP. The strong annual growth is widely attributed to the rise of digital banking services, an increasingly cashless payments ecosystem, and broader adoption of fintech platforms across the country.

Economists say the Q3 slowdown across the digital economy can be linked to weakened consumer spending, persistent inflationary pressures, and reduced capital investments by telecoms operators facing foreign exchange constraints. Some industry analysts also point to seasonal disruptions, noting that the rainy season often slows down expansion projects in telecommunications infrastructure. Others highlight the regulatory uncertainty surrounding the anticipated National Digital Economy Bill, as companies adopt a cautious approach while awaiting policy clarity.

Still, the overall outlook for the digital economy remains positive. Stakeholders argue that the sector is better positioned for long-term growth compared to most others in Nigeria’s economy, especially given the increasing reliance on digital platforms for everyday transactions. They also believe that the legislative reforms expected to take effect once the National Digital Economy Bill becomes law could unlock unprecedented levels of innovation and investment.

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National Digital Economy Bill Seen as Potential Game-Changer

The bill, which has been passed by the National Assembly and is now awaiting President Bola Tinubu’s signature, is widely considered one of the most transformative pieces of legislation in Nigeria’s technology landscape.

The Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, has repeatedly emphasised the sector’s potential, stating earlier in 2025 that the digital economy could generate as much as $18.3 billion by 2026. He has also described the National Digital Economy Bill as a key driver for achieving Nigeria’s ambition of becoming a $1 trillion economy.

At the heart of the bill lies a major legal reform: the formal recognition of electronic transactions. Under current Nigerian laws, many transactions still require physical signatures and paper documentation, hindering efficiency and discouraging remote or online engagement. The new legislation seeks to eliminate those barriers by granting electronic signatures the same legal status as handwritten ones. This means digital contracts would be binding in the same way as traditional paper contracts, thereby modernising how individuals, businesses, and government institutions conduct formal transactions.

The bill also introduces the concept of secure digital signatures, marking a shift towards stronger authentication systems that enhance trust in digital transactions. These signatures will be supported by provisions for electronic timestamps, digital document storage, and electronic transferable records such as digital bills of lading used in shipping. By laying out these frameworks, the bill aims to strengthen Nigeria’s digital infrastructure and promote secure communication across both private and public sectors.

Another significant innovation is the recognition of foreign electronic signatures and certificates. This measure is expected to boost cross-border trade and streamline international business operations by allowing Nigerian companies to interact digitally with foreign partners without legal complications. The bill further makes room for electronic carriage of goods documentation, which will modernise logistics and shipping processes—traditionally hampered by manual paperwork, delays, and a lack of transparency.

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Perhaps the most far-reaching element of the proposed law is its mandate for the digitisation of all government services. According to the provisions, every ministry, department, and agency must establish an ICT unit and transition their services to digital platforms where feasible. The bill also proposes the creation of a national data exchange system to facilitate seamless information-sharing across government institutions, helping to reduce bureaucratic delays and eliminate duplication of processes.

For many Nigerians, the prospect of digitised public services offers hope for a future where long queues, paperwork, and time-consuming administrative procedures become a thing of the past. Digital governance, experts argue, could increase transparency, reduce corruption, and improve efficiency in public administration. It could also make it easier for businesses to comply with regulatory requirements, file taxes, register property, or access government records.

Industry stakeholders have welcomed the proposed reforms with cautious optimism. Legal experts say the formal recognition of electronic signatures and digital contracts will bring Nigeria closer to global digital standards, offering investors a stronger sense of security. Bankers and fintech operators argue that the framework could accelerate financial inclusion by expanding access to digital financial services.

Telecoms operators, on the other hand, believe clearer regulations could unlock funding for network expansion, broadband rollout, and next-generation technologies.

Yet concerns remain about Nigeria’s readiness for a fully digital governance system. Broadband penetration remains uneven across states, and millions still lack reliable internet access. For the digital economy to thrive, analysts say investments must be directed toward infrastructure, spectrum allocation, data protection frameworks, and rural connectivity. Without these, the reforms may fall short of their full potential.

As Nigeria awaits the president’s assent to the Digital Economy Bill, the sector finds itself at a crossroads: facing short-term performance dips but also standing on the brink of a potentially transformative shift. Telecoms companies are anticipating new investment cycles, banks continue to deepen their digital platforms, and policymakers are betting heavily on technology to drive growth.

Despite the Q3 decline, the sector’s long-term trajectory remains upward, and optimism persists that once the legislative overhaul becomes law, Nigeria’s digital economy could rebound strongly and cement its position as a cornerstone of national development.