How technology will rescue Nigeria’s economy

Technology is now at the forefront of driving Nigeria’s economy, bringing up startups, providing lifeline for the financial sector, supplying blood to e-commerce and giving impetus to the creative industry, thereby producing young technopreneur millionaires

With information and technology startups springing up in the country, and the expected auctioning of spectrum to telecom operators and other interested foreign investors by December for the operation of the fifth generation (5G) network, many telecom and related companies are coming on board.

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With this, the country is expected to net billions of dollars from tax and licences, thereby increasing her revenue.

The information technology and telecommunications sector is currently the largest contributor to Nigeria’s Gross Domestic Product (GDP).  It contributed over N4trillion to the N40trillion the country generated GDP in Q1, 2021. This is even as the sector fell 10 per cent behind its contribution in the same quarter last year.

Statistics by the National Bureau of Statistics (NBS) revealed that the sector contributed about 9.91 per cent to the total GDP in Q1 2021, lower than the 10.31 per cent recorded in the same quarter of 2020 and 10.58 per cent it contributed in the preceding quarter. However, the sector still recorded a higher contribution when compared to the oil sector, which contributed just 9.25 per cent.

According to the NBS, “Nigeria’s GDP grew by 0.51 per cent year-on-year, in real terms in the first quarter of 2021, marking two consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.

“In terms of contribution to aggregate GDP, the oil sector accounted for 9.25 per cent of aggregate real GDP in Q1 2021, while the non-oil sector accounted for 90.75 per cent of aggregate GDP in the first quarter of 2021’’.

It said growth in the non-oil sector was driven mainly by the Information and Communication Technology sector while other drivers include Agriculture (Crop Production); Manufacturing (Food, Beverage & Tobacco); Real Estate; Construction and Human Health & Social Services.”

Reacting to the development, the Minister of Communications and Digital Economy, Dr Isa Ali Ibrahim Pantami, said the consistent positive performance of the ICT sector to the growth of the Nigerian economy was as a result of the development and implementation of relevant policies, which have provided an enabling environment for the sector to thrive. Pantami added that the Information Communication Technology (ICT) sector grew by 6.47 per cent in Q1 2021, making it the fastest growing sector of the Nigerian economy.

He said, “The federal government has provided an enabling environment for the ICT sector to thrive, through the development and implementation of relevant policies, including the National Digital Economy Policy for a Digital Nigeria, Nigerian National Broadband Plan and the Revised National Digital Identity Policy for SIM Card Registration, among others.

“The GDP report has shown that the ICT sector continues to serve as a catalyst for the growth and diversification of our economy.”

Speaking on technology’s impact on the country’s economy, the immediate former president of the Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola, an engineer, said Nigeria had had 21 years of solid telecommunications industry growth, which means that direct and indirect jobs had been created by the sector.

He said, “We have had almost 20 years of solid growth, which means effective direct and indirect employment, increased GDP contribution, increased mobile telephony penetration and the biggest telecoms market in South Sahara Africa.

“There are areas that have dogged us in terms of infrastructure challenges and the dearth of power from the grid and skill sets challenge. However, alongside these and recurring issues regarding doing business, the positives outweigh the negatives, and we have now created an underlying platform being prepared for the critical role it plays in the digital economy’’

According to him, the financial sector and e-commerce have had their development thrive on the back of telecom and the ICT sector.

He said technology and telecommunications provided the basis of connectivity, and meaningful connectivity that ensures that electronic transactions are carried out and a certain degree of automation is introduced like never before.

“This improvement in productivity will only increase the GDP to exceed our population growth and raise many Nigerians out of poverty trap,’’ he added.

However, he said the industry needed a repeat of the sort of investments that were made in the first 10 years of its development.

“During that period, it is estimated that circa $58bn was attracted into both sectors, and this now equates to $70bn or thereabouts, so a slowing down of FDI has occurred over the latter periods and this we need government to change by providing the environment that attracts further investments to the same tune (c $120bn by 2030 so that broadband is pervasive and that investment grows our economy by 1.38 per cent, year-on-year, on the assumption that we achieve at least 70 per cent broadband penetration by 2025,’’ he said.

The executive vice chairman of the Nigerian Communications Commission (NCC), Prof Umar Garba Danbatta, said technology would further transform Nigeria’s economy when the 5G network became operational in the country.

“5G will revolutionise and transform our way of life – from education to agriculture, security to entertainment and governance in general. It will transform our education system. The availability of a fast wireless network will enable virtual learning. 5G will empower our educators to re-imagine what is possible inside and outside their classrooms,” Danbatta said.

He said artificial intelligence would revolutionise health care because 5G would make it easier to determine potential diagnosis and decide on the best treatment plan.

“By moving to the 5G network, health care organisations can use artificial intelligence tools they need to provide the best care possible, from wherever they are in the hospital or clinic,” he said.

He added that 5G would support business innovative ambitions and create new markets, transforming supply chain management and creating smarter, more efficient manufacturing.

Danbatta, a telecom engineer, also said, “5G will allow us to stream, download and upload huge quantities of data at a much faster rate than we are currently able to do. This means higher definition video, either from television or using video conferencing.

“Additionally, 5G is designed to facilitate a wealth of new applications for wireless technologies. Driverless cars and drones will be able to safely and near-instantaneously send and receive information about their surroundings that will allow them to operate safely.”

He said many countries were looking to 5G to better connect rural communities, allowing more people to start businesses from home and opening up opportunities.

Also, there are still more opportunities and markets for investors as only 40million Nigerians currently have smart-phones out of about 210m people. An online store, Jumia, has said a survey of Nigeria’s smartphone users it conducted in 2018 showed that more than Nigeria’s population did not have smart-phones.

The country manager of Jumia, Omolara Adagunodo, disclosed that 67 per cent of Nigerians would be using smart-phones by 2025, which means a large market for dealers.

According to her, the increased level of internet penetration would keep pushing the number of smart-phone users up.

Recently, Nigeria, which has served as a dumping ground of sorts for mobile phone manufacturers, got its own locally produced 4G-enabled smart-phone.

The director-general of the Industrial Training Fund (ITF) Model Skills Training Centre in Abuja, where the phone was produced, said it would create jobs for skilled and unskilled Nigerians and improve the country’s GDP.

Experts said the government had taken the right decision by focusing on ICT and telecom to drive the country’s economy. It is expected that the sector would help lift more than 100million Nigerians out of poverty in the next 10 years. It has created approximately 5million jobs over the past 10 years.

The sector has continued to provide mobile banking services to accommodate the unbanked, providing access to e-learning platforms to help facilitate training and development, and bringing health care services to rural regions via telemedicine and text messages, amongst many other services.

The e-commerce market is currently worth $15billion, but there is still huge potential for growth, according to experts. With improvement on infrastructure, innovation around payment systems and a reliable addressing system, Nigerian e-commerce could improve at an incredible scale.

A Lagos-based analyst, Lekan Joseph, said proper deployment of ICT could also propel small and medium enterprises to increase its present contribution to the country’s GDP.

According to a Gartner report, technology and services associated with communications, commerce and payments would impact on business performance over the next 10 years in Nigeria and other African countries.

“Developments in ICT are changing how African governments and businesses operate.

“Some technologies on the Hype Cycle enable new ways of doing business across industries, such as bimodal IT operations and cloud office, causing a shift in industry dynamics.

“These technologies will allow African businesses to engage with global partners and benefit from mature market expertise, leading to the creation of an improved, sustainable ecosystem,” William Hahn, a principal research analyst at Gartner stated.