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The Institute of Software Practitioners of Nigeria (ISPON) has questioned the reported contribution of the country’s software industry to GDP, arguing that a sector employing more than one million people and comprising over 100,000 registered companies should have a larger economic footprint.
ISPON President James Agada raised the concern during his inauguration as head of the institute’s 2026–2028 National Executive Committee, where he outlined plans to strengthen Nigeria’s indigenous software industry and increase its contribution to the economy.
According to Agada, the latest data from the National Bureau of Statistics (NBS) put the software industry’s contribution at less than 0.2% of Nigeria’s GDP.
He questioned whether the figure adequately captures the size and economic activity of the sector.
ISPON Questions Software Industry Valuation
Agada said the apparent gap between the industry’s size and its reported GDP contribution could indicate that economic activity generated by software companies is not being fully captured.
He noted that ISPON has about 500 corporate members and 10,000 individual members, while the wider industry is estimated to employ more than one million people directly and indirectly.
The ISPON president suggested that part of the discrepancy could be linked to Nigerians’ extensive spending on software products and services developed outside the country.
Licensing, subscriptions, technical support and other payments to foreign software providers represent money leaving the domestic economy, rather than revenue accruing to Nigerian software businesses.
Agada argued that increasing the adoption of locally developed software could help retain more of that expenditure within Nigeria and strengthen the industry’s contribution to national output.
Local Patronage Remains a Major Challenge
Beyond the GDP measurement issue, Agada identified weak local patronage as one of the biggest constraints facing Nigerian software companies.
He argued that limited opportunities for domestic firms make it difficult for them to expand, while inadequate recognition of local capabilities further discourages businesses and public institutions from adopting Nigerian-built solutions.
According to him, this creates a cycle in which limited demand restricts the growth of software companies, which in turn limits their ability to develop products capable of competing on a larger scale.
Agada pointed to countries that have used government procurement and institutional support to create markets in which domestic technology companies can develop, test and improve their products before expanding internationally.
Software Firms Need Better Business Models
ISPON also wants Nigerian software companies to strengthen their internal capacity.
Agada identified stronger business models, improved organisational structures and better access to capital as areas requiring attention if local software companies are to compete more effectively.
The focus, therefore, is not only on increasing government and private-sector patronage but also on ensuring that Nigerian technology companies are sufficiently structured to take advantage of emerging opportunities.
ISPON to Launch National Software Registry
As part of efforts to address what it describes as poor visibility within the industry, ISPON plans to establish a National Software Industry Registry within six months.
The registry is expected to document Nigerian software companies, practitioners, innovations and major industry achievements in one central database.
Agada said Nigeria’s software engineers have contributed to significant technology developments, including banking applications built on relational databases, offline ATM card systems, large-scale card personalisation projects and a microprocessor-based telephone switching system.
However, he said many of the people and innovations behind such developments have not received sufficient recognition or documentation.
The proposed registry is intended to make those contributions easier to identify and showcase.
ICT Sector Contributes 11.74% to GDP
The debate over software’s contribution comes as Nigeria’s broader Information and Communication sector continues to expand.
NBS data show that the sector grew 9.62% year-on-year in real terms in Q2 2026, increasing its contribution to total real GDP to 11.74%, from 11.18% in Q2 2025 and 11.31% in the first quarter of 2026.
However, telecommunications remains the dominant component of the wider ICT sector.
Telecommunications alone accounted for 9.72% of real GDP during the quarter, making it the fourth-largest individual contributor to Nigeria’s economic output.
The figures highlight the difference between the performance of Nigeria’s broader digital economy and the much smaller reported contribution attributed specifically to software.
Billions Already Budgeted for Government Software
ISPON’s concerns about domestic patronage also come as Nigerian government agencies continue to allocate significant amounts to software-related projects.
The 2026 budget provides for about N24 billion in software-related spending by the National Identity Management Commission and nine other federal ministries, departments and agencies.
NIMC has the largest allocation among the listed agencies, with approximately N7.58 billion earmarked for software projects.
For ISPON, such spending represents an opportunity to increase the participation of indigenous software companies in government technology procurement and build stronger domestic capacity.
Building a Stronger Local Software Industry
ISPON’s new leadership is positioning the software industry as an area with greater potential to contribute to Nigeria’s economic development.
The institute’s challenge to the sub-0.2% GDP figure also raises a broader question about how accurately Nigeria measures economic activity generated by digital products, services and intellectual property.
For Agada and ISPON, improving measurement is only one part of the task. Increasing local demand, strengthening software companies, improving access to capital and documenting indigenous innovation will also be necessary if Nigeria wants more of the value generated by its digital economy to remain within the country.
The proposed National Software Industry Registry could provide a foundation for that effort by giving policymakers and investors a clearer picture of the companies, professionals and technologies operating within Nigeria’s software ecosystem.
The bigger objective is to move the industry from being recognised primarily for its talent and employment potential to becoming a more measurable and significant contributor to national economic output.
