Nigeria’s economy and tech ecosystem

Although Nigeria has one of the fastest developing technological economies in the Middle East and Africa (MEA) markets, the technology development in the country is still not mature.

The reason, according to tech entrepreneurs, is that the supporting structures to a strong tech economy are still lacking in Nigeria, and until the right infrastructure is deployed, they said, the flowery numbers and rave reviews which are mainly dependent on the population power of the country will hardly make much difference.

They said instead of promoting smart city initiatives, Nigerians should rather promote smart villages to equip the majority of youths living in the villages and restrain them on perpetual desires to migrate to the urban cities.

Why Nigerian tech ecosystem remains at infancy

According to Funke Opeke, the supporting factors that play a crucial role in creating a robust tech ecosystem such as access to capital, market depth, infrastructure, work spaces, and relevant skills set, are still not enough in Nigeria.

She said: “We have fewer resources per person to invest and to buy. Start-ups face difficulty in scaling and making decent returns to compete globally. More successful ones, such as Andela, Flutterwave, Tizeti among others, quickly go offshore

“Lack of infrastructure is a challenge such as electricity, transportation and broadband.

“There are no government support incentives, grants, direct investments and safeguards for small players and new entrants.

“There are not enough incubators providing early-stage support to start-ups. Part of early teething problems start-ups face is inadequate access to the market for their products.

“Besides these, there is also poor education, lack of skilled talents, and until there is a sector-specific acceleration for all these, we will still remain an emerging tech economy.”

For the past few decades, the economic viability of many developed nations has been traced to their tech ecosystem. Tech ecosystem is an interconnected, interdependent network of various actors that combine to create innovative products and services in technology.

These include tech start-ups and entrepreneurs, global tech companies, hubs/accelerators, investment groups, universities and other research institutes that provide disruption leading to innovations in the existing sectors.

Globally, these disruptions have produced great wealth, changed the narratives and continued to drive productivity while creating trillion-dollar companies such as Apple, Amazon, Microsoft, Google, Facebook, and Alibaba among others.

A recent GSMA report stated that since 2016, the number of active tech hubs across Africa has grown by over 50 percent; from 314 in 2016 to over 442 in 2018. It said Nigeria, alongside four African countries, is housing over 4,500 of these hubs with Nigeria on the top of the list with 55 of them making it the largest in the African tech ecosystem.

The report, however, said when compared to more established global tech ecosystems in the USA, China, India and the UK, the Nigerian ecosystem is still considered underdeveloped.

However, experts have said to experience exponential growth in the Nigerian economy, it is imperative that Nigeria’s Tech Ecosystem is developed through local content.

But the federal government has given assurances of its support to innovators and tech entrepreneurs in the country.

The Minister of Communications and Digital Economy, Prof. Isa Ali Ibrahim (Pantami), who made the promise however urged all players in the tech ecosystem to think and act like Mo Ibrahim with the mindset of creating solutions to solve the country’s problems.

The minister said this at the Co-Create 2022 International Tech Exhibition and Gage Awards. Pantami who was represented by the Director General of the National Information Technology Development Agency (NITDA), Kashifu Inuwa Abdullahi, said the most important part of the innovative process is commercializing it.

He stated that, “Innovation is a process of taking an idea from conception all the way to impact and while many people think innovation and invention mean the same thing, innovation is actually creating a market or democratizing access to your solution, product or services. “

Underpinning his point with an illustration, the minister cited that the telecommunications sector which was orchestrated by Mo Ibrahim in Africa about 20 years ago and which encountered so many challenges has now evolved into the biggest sector in Africa.

“In Nigeria, we have many problems and we need more innovations to solve them. These kinds of collaborations we are having here today can open doors for this because you cannot survive in isolation. Everything is about ecosystem”, he noted.

Buttressing his point further, the minister holistically averred that the five critical stakeholders in an ecosystem are the innovators otherwise known as the entrepreneurs who start and grow businesses with ideas and solutions, the human capital developers who discover talents and are the human components of technology, the government who are the enablers of a level-playing field for innovators, the risk capitals that invest money in startups and the corporate organizations that buy the products.

He further asserted that an effective collaboration of these 5 stakeholders in Nigeria will produce an excellent and viable ecosystem in the country. Emphasizing the present administration’s commitment to the implementation of the National Digital Economy Policy and Strategy (NDEPS) by effectively collaborating with innovators in the industry, Pantami disclosed that the Federal Executive Council has given approval for the ministry and agencies under its supervision to co-create solutions with the ecosystem in areas of procurement, IP & Patenting and giving incentives to encourage startups.

The minister while giving further disclosure on how co-creating with the ecosystem can be achievable, highlighted that showing clarity on processes by all parties, unleashing energy, building trust, building stronger startups and devising policies to shape the future are key indices into establishing and sustaining a formidable ecosystem in the country.

“Whatever we do, we don’t do in isolation. We work with the ecosystem to co-create policies and co-create the regulations. Whatever we do, we do together. We believe that together, we can do greater things. That is why we are here to work with you and to co-create our future,” he said.

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