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Nigeria, Ghana Smartphone Markets in Good Shape in 2019 as COVID-19 Casts a Dark Shadow
Nigeria’s smartphone market grew 5.3% quarter on quarter (QoQ) in Q4 2019, according to the latest figures from global technology and consulting services firm International Data Corporation (IDC). This growth comes on the back of a 3.2% QoQ increase in Q3 2019 after the market suffered a slow H1 2019, which translated into a 3.5% year-on-year (YoY) decline for 2019 as a whole. Meanwhile, Ghana saw smartphone shipments increase 6.1% QoQ in Q4 2019 and 9.1% YoY for 2019. Combined, these two countries saw shipments of 12.6 million units in 2019.
The decline in Nigeria in H1 2019 was caused by the closure of airports February, which led to a considerable slowdown in imports. The extended campaigns for the 2020 general elections also impacted the market, while the dollar was also unstable during this same period, which had the effect of reducing smartphone shipments to the country.
Together, Transsion brands (i.e., Tecno, itel, and Infinix) held the biggest market share in 2019 as they launched a number of successful models with big screen sizes and mid-range prices, including the Spark 4, Phantom 8, and Camon 12, among others. In addition, Transsion experienced strong demand for its wide range of models in low price bands ($0<$100).
Huawei had a major comeback to the market, benefiting from an increased marketing budget and the launch of new products in the mid-range price bands. Samsung benefited from its A series models, which had a wide market audience due to the affordability and rich features of these devices.
The Nigerian government raised VAT from 5% to 7.5% effective from February 1st, 2020. This new regulation is likely to lead to an increase in smartphone prices, leading to slower smartphone adoption in the market. With VAT averaging 5% in the markets directly neighboring Nigeria, gray market re-exports of smartphones into the country are likely to increase.
Anticipated Impact of COVID-19 Outbreak
As per the most recent Situation Report (#56) from the World Health Organization, there are now 167,511 confirmed cases of the COVID-19 virus worldwide, with 6,606 deaths. In response to the pandemic, IDC has developed three possible scenarios – Optimistic, Probabilistic, and Pessimistic – and currently believes that the Probabilistic scenario is the most likely to occur, with both supply- and demand-side concerns alleviating by the second half of 2020. Under this Probabilistic scenario for Nigeria and Ghana combined, IDC expects smartphone shipments to decline 15.4% in QoQ in Q1 2020 and 3.9% in Q2 2020.
As most consumer devices in West Africa are imported from China, the disruption to supply chains caused by the COVID-19 outbreak will have a particularly severe impact on this sub-region. Most of the major smartphone brands (i.e., Tecno, Itel, Infinix, Xiaomi, Huawei, Oppo, and Vivo) are of Chinese origin and they control over 85% of the regional market. Other brands such as Nokia and Samsung, with their partial production outside China, cannot fill the gap as they also source parts and components from China.
The impact of the COVID-19 outbreak on Nigeria is double sided. While the supply of smartphones will inevitably be restricted on the Chinese side, Nigeria’s oil revenues are also likely to suffer as China is Nigeria’s the largest customer for crude oil and other raw materials.
“While the spread of COVID-19 presents a significant threat to Nigeria, a country with insufficient health infrastructure, the negative impact on oil revenues poses a larger threat in the short to medium term, and this will negatively impact the country’s fragile economic development and the purchasing power of consumers,” says Dr. Ramazan Yavuz, a senior research manager at IDC.
“While the impact of the spread of the virus is expected to lessen and a return to normalcy is awaited in H2 2020, the volatility and uncertainty in oil markets will continue to take a bigger toll on the Nigerian economy, which will subsequently stifle demand for consumer devices, including smartphones.”
IDC expects that the shortage of smartphone supply will drive an increase in gray market imports from other markets. “If the supply chain is not back to normal and distributors run out of stocks, the average selling prices for smartphones are likely to go up because of the shortage in supply,” says George Mbuthia, a research analyst at IDC. “The increase of VAT to 7.5% in Nigeria will push costs further upwards, slowing smartphone penetration in the short term.”
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Legit.ng, Shade of Life Foundation Partner to Advance Autism Awareness in Nigeria
Legit.ng recently joined forces with the Shade of Life Foundation to become a voice of autism, and drive advocacy for improved media support during Autism Awareness Month.
Conversations around media support exploration was led by Joseph Omotayo, head of Department for Human Interest Stories at Legit.ng, and Dr. Eziafakaku Nwokolo, founder and CEO of the Shade of Life Foundation,
This partnership is a response to the concerns raised by organizations like the Shade of Life Foundation about the level of support received from the media in discussing autism as a disability.
While other disabilities may receive attention, autism, with its critical developmental implications often lacks adequate representation in mainstream media.
Recognizing the importance of addressing these concerns, Legit.ng took proactive steps by integrating itself into the essence of autism awareness.
It facilitated a one-hour workshop with Dr. Nwokolo, the founder of the foundation, to deepen our understanding of autism, its various spectrums, and the language boundaries associated with it.
Other steps we took in advocating autism awareness in the media, can be seen in our attached press release.
Legit.ng believes that by amplifying the voices of autism and advocating for better media representation, we can contribute to creating a more inclusive and accepting society for all.
News
As Nigeria Struggle, Tanzania Turns off Power Plants Due to Excess Supply
While 85 per cent of Nigeria is in darkness, Tanzania, an African country has shut down five hydroelectric stations in a bid to reduce excess electricity in the national grid.
Kassim Majaliwa, prime minister, Tanzania, has said the main plant, Mwalimu Nyerere Hydroelectric Station, alone generated enough electricity to power major cities, including Dar es Salaam, the country’s commercial hub.
It is the first time Tanzania, which suffers chronic power shortages, has closed hydroelectric stations due to excess production.
“We have turned off all these stations because the demand is low and the electricity production is too much, we have no allocation now,” an official from state-run power company, Tanesco, said.
The 2,115MW Julius Nyerere Hydropower Dam is said to be almost filled with water following heavy rains that started early this year.
Meanwhile, while the country has an installed capacity of 1,938MW and the grid installed capacity of 1,899MW, Nigeria which has an installed capacity of 13,000MW is struggling to electrify 85 per cent of its electricity consumers.
News
President Tinubu Appoints Jim Ovia as Student Loan Fund Chairman
President Bola Tinubu has approved the appointment of Jim Ovia, renowned banker and businessman, as the Chairman, Board of the Nigerian Education Loan Fund.
Ovia’s appointment is contained in a State House statement titled, ‘President Tinubu appoints Jim Ovia as Chairman of the Nigerian Education Loan Fund,’ and issued on Friday by Ajuri Ngelale, special adviser to the President, Media & Publicity.
The statement noted that “Ovia is the founder of one of Nigeria’s leading banks and a respected business leader, with a surfeit of efforts and benefaction towards nurturing and empowering young Nigerians.
“He is an alumnus of Harvard Business School and holds a Master’s in Business Administration from the University of Louisiana.”
The National Student Loan Programme is a pivotal intervention that seeks to guarantee sustainable higher education and functional skill development for all Nigerian students and youths.
The Nigerian Education Loan Fund, the implementing institution of this innovation, demands excellence and Nigerians of the finest professional ilk to guide and manage.
“The President believes Mr. Ovia will bring his immense wealth of experience and professional stature to this role to advance the all-important vision of ensuring that no Nigerian student suffers a capricious end to their pursuit of higher education over a lack of funds,” the statement partly read.
Ovia’s appointment will also ensure “that Nigerian youths, irrespective of who they are, have access to higher education and skills that will make them productive members of society and core contributors to the knowledge-based global economy of this century.”
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