THE IMPACT OF INFORMATION COMMUNICATION TECHNOLOGY (ICT) ON ECONOMIC DEVELOPMENT

CHAPTER ONE

1.1 Background of The Study

The financial organization is considerably one of the largest industries in Nigeria providing employment for an estimated twenty two thousand people nationwide and generating 9% of the annual GDP of the country. Nigeria is considered to be one of the fastest growing telecommunication nations in Africa, investing heavily in ICT and related information technology Chiemeke et al (2006). One of its major investors has been the banks, however, with their major investments, the use ICT has arguably has an effect in efficiency and has made operations faster nevertheless there has been no major evidence that indicates that they have increased profitability, profitability has an important factor for banks and other organization as it can help drive economic and organizational growth and most importantly help organization increase their profit. This study delves into the realms of the financial organizations industry in Nigeria in an attempt to discover the impact of the use of ICT has led on profitability. This study will incorporate primary and secondary research in an attempt to determine if the use of ICT has improves profitability in the financial organizations industry and also to get a better understanding of the industry or not and their ICT practices. The outcome will be a set of recommendations aimed at suggesting possible ways to use ICT to improve profitability . this study aims at informing and advising the people in the Nigerian financial organization industry considering the use of ICT can be further used to improve profitability as well as academics who seek to broaden their insight of the industry in such light. The research and discussion will be condensed to a set of recommendation. The motivation behind conducting this research into the impact of the use of ICT has on profitability in the Nigeria financial organizations industry comes from the lack of such research in the Nigerian financial region as a series of similar studies have been carried out in other developed countries. Nigeria is often regarded as the giant of Africa more so they are said to be highest investors in the use of information communication technology in Africa, the use of ICT has no doubt contributed to the growth of the various industries in the country however there is no direct knowledge as to if the use of ICT has increased profitability in the financial organizations industry, thus the purpose of this study is to investigate the impact of the use of ICT in the Nigerian Financial Organization Industry on profitability.

1.2 Statement of the Research Problem 

Nigeria is faced with enormous problems of information access. These problems , especially that of low level telephone penetration and uneven access appear to be insurmountable. The penetration rate in Nigeria in the twentieth century was less than one line per 1000 population. In spite of efforts made by successive governments in Nigeria to improve on the penetration rate the country had continued to nose-dive as a result of fresh challenges in terms of building information and communication technology (ICT) related management and communication infrastructure. This has resulted in almost negative benefit, both to the economy and the society as a whole. It is quite evident that Nigeria at present lacks innovation, capacities and capabilities in information technology (IT) management and hardware maintenance. This notwithstanding, the country has been and will continue to import and use a wide range of durable consumer electronics, computers and telecommunication equipments. It must therefore being to accumulate the capabilities to repair and maintain these vintages. Indeed, if Africa is not to be left behind in global trade and development, it must be able to master certain basic capabilities in ICT. In addition, the rate of technical obsolesce is the natural technologies (such as steel, textiles and petrochemicals). The technological followers in Africa may therefore face the difficulty of sourcing for parts, components and peripherals unless they begin to accumulate the capacity for component manufacture. Available technology is largely obsolete electro-mechanical switching system. Presently, some countries are engaged in massive modernization efforts, Nigeria for instance, has at present, about 500,000 lines with about 160,000 lines just added through the on-going digitalization programme. Technology absorption and mastery takes more than importation of technology; learning which demands explicit investment is a perquisite for building the technical and managerial capabilities. Given the foregoing, the diffusion of ICT will have widespread, albeit differentiated impact on all countries, industries and sectors. Policy must therefore begin to look at variable such as: • Change in the structure of industry and services • Employment structure, training and manpower • Industrial organization and management • Production processes and products • Telecommunication infrastructure and revolution of service delivery of existing infrastructure, especially power system • Information technology supply • How the accelerating growth impact in trade and long-term competitiveness and maturation of African industry. These are some of the key issues, which from the focus of this study. This study also examine the impact of ICT in the light of these variables, starting with the services and the manufacturing sectors, its organizational profitability. While the importance of manufacturing is generally accepted , the services sector has not always received as much attention. There are several reasons why a systematic study of ICT impact on the sector is important. First, the services are easily and more readily targeted for reforms. There is very little in terms of a systematic study on the impact of ICT adoption on these sectors in Nigeria. Hence, the decision to examine how ICT been adopted and diffused in the two sectors. In manufacturing, the emphasis is on the petroleum, pharmaceuticals, textiles, foods and beverages, and metal working sectors, since these contribute significantly to value added. The services chosen are hotel and tourism, broadcasting, aviation, transport, (railway) insurance and the capital market, as significant contributors to the quality of life of the people.

1.3 Objectives of the Study 

The aim of this study project is to answer the question “does the use of ICT improves profitability in financial organization in Nigeria” in order to meet this aim, this study seeks accomplish the following objectives; they are to;

1. Identify if the use of ICT improved profitability in Nigeria organization

2. Determine how ICT can be used effectively to impact on profitability of organization.

3. Identify the benefits of ICT in organization

4. Identify the problems of ICT in organizations.

1.4 Research Questions

i. Has the use of ICT improved profitability in Nigeria financial organizations?

ii. How can ICT be used effectively to impact profitability?

iii. How can the befits of ICT in organization be identified?

iv. How can the problems of ICT in organization be identified?