Data usage spurs growth in telecommunication sector to 74%

image depicting data usage

The new normal of driving almost every activity online – including business, education, meetings, conferences and other events – has catalysed growth in the information and communication sector, making it the fastest-growing sector in this pandemic era.

Data from the Ghana Statistical Service (GSS) have shown that the information and communication sector maintained its position as new driver of the economy, recording an impressive 74.2 percent growth in the second quarter of 2020 – albeit slightly slower than that of the first quarter’s 77.4 percent performance.

Compared to the sector’s pre-pandemic performance, growth was 67.6 percent in the fourth quarter of 2019 – reflecting the fact that COVID-19 has pushed many activities which would have otherwise been done without use of the Internet online; resulting in high demand for data.

Currently, most private schools – especially the international and Montessori ones – have sent learning online. Some religious groups have also not opened their premises to their members despite government lifting restrictions on social and religious gatherings, preferring to use the Zoom conferencing app among others.

In the business community, too, annual general meetings, conferences, workshops and other training programmes have all moved online against the traditional method of person to person interactions.

That the information and communication sector’s impressive growth is driven by data is further confirmed by data subscription and data usage statistics from the National Communications Authority, which indicate data subscriptions for the telecommunication industry increased by more than 275,000 in March 2020.

Figures from the market leader, MTN Ghana, also show strong data growth as the company’s active data users increased by 5.2 percentm which resulted in a 21.7 percent growth of data revenue at end of June 2020.

The company said data traffic in South Africa was up 86 percent year-on-year. MTN’s biggest market, Nigeria, meanwhile saw a jump of 156 percent year-on-year; and Ghana recorded a 181 percent surge in data traffic.

Despite the information and communication sector’s impressive growth, the pandemic’s impact forced the economy to contract in the second quarter – a situation that has not been experienced in almost four decades.

GDP for the second quarter contracted 3.2 percent, largely driven by the abysmal form of the hospitality sector. The hospitality sector – precisely, hotels and restaurants – was the hardest impacted by the pandemic, and hence became primarily responsible for the economy’s contraction as it also contracted by a horrifying 79.4 percent in the period under discussion.

It must be recalled that the hospitality industry was the sector most significantly affected by restrictions on movements and events, when government implemented lockdown measures and ordered the closure of all drinking bars, nightclubs, among others. The GSS data show sales revenue among accommodation and food businesses dropped to as low as GH¢700,000 in April compared to GH¢2.5million in April 2019.

The manufacturing sector also saw sales revenue slashed by almost half as it recorded GH¢25.6million in April compared to GH¢44.9million in the same period last year. Restrictions on travel and trade also saw sales revenue from the sector drop to GH¢30.5million in April from GH¢45.5million in the same period of 2019.

In terms of the economy’s real sectors, agriculture was the only one that experienced some growth – growing by 2.5 percent while industry and services contracted by 5.7 percent and 2.6 percent respectively.

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