The surge in the contribution of the non-oil sector to the nation’s GDP in the last quarter of 2015, amid economic headwinds which crippled the oil sector, was aided largely by digital technology, BusinessDay investigations reveal.
The non-oil sector contributed 91.94% to the nation’s GDP in real terms, higher from shares recorded in Q3 of 2015 (89.73%) and Q4 of 2014 (91.03%) while the Oil sector contributed 8.06% of total real GDP, down from figures recorded in the corresponding period of 2014 and in Q3 of 2015 by 0.91% points and 2.21% points respectively. This is according to the most recent report by the National Bureau of Statistics (NBS).
BusinessDay investigations reveal that digital technology has helped to drive growth in non-oil sectors and as digitally savvy consumers increasingly demand omni channel (online and offline) searching and buying options, even more growth is expected.
Industry players affirm that digital technology plays a key role in their business model and can be attributed for the growth in the sector, which they are convinced could be leveraged on, going forward, to sustain growth in subsequent quarters.
“Digital technology has catalysed growth in non-oil sectors such as retail, finance, media and entertainment. With the volume of foreign direct investments that the digital sector has attracted in recent years, it is safe to say that it (digital technology) is a viable engine,” says Oluwayemisi Mafe, manager, public relations and communication, Konga.
“Konga’s vision is to be the engine of commerce in Africa. The major component underpinning this vision is digital technology,” Mafe said, reiterating Konga’s plan to consolidate the gains it made via digital technology.
Digital financial services have also been leveraged by financial institutions, in a bid to close in on the high number of unbanked populace in the country.
“We made over N2 billion in the first two years of introducing the bank’s digital project. We have attracted new customers by adding more digital functionality to our services and tailored these revised services to meet the proximity challenge of the large unbanked population in Africa,” a source at Diamond bank revealed to BusinessDay.
BusinessDay studies show an annual increase of over 30% in the usage of mobile applications in Nigeria, both for global apps and for local apps. Some commercial banks are leveraging on mobile apps as economic crisis persist.
E-commerce is another non-oil sector that has emerged through digital technology and with Nigeria being the biggest e-commerce market in Africa (valued at $550M a year), stakeholders are optimistic.
“We find that consumers are very open to e-commerce and new ways of accessing products, so penetration is growing faster than in other markets. When all our markets are at equal maturity, we believe Nigeria will account for a quarter of our business,” says, Sacha Poignonnec, co-CEO of Africa Internet Group, an online platform in Africa.
Despite the essential role digital technology has played in helping the non-oil sector swim against Nigeria’s economic current, it could play even more, were it not hampered by underlying infrastructure which is yet to deeply penetrate the country, the industry players say.
“Deep penetration of digital infrastructure in Nigeria will be a boost for Konga. Wider digital infrastructure enables us bring the convenience of online shopping to more people in the country,” says Mafe.
With the low hanging fruit of more affluent customers and densely populated urban regions plucked, widening digital infrastructure into semi-urban and rural regions, and making internet and mobile accessible to more citizens is the next stage for Nigeria, as contained in a recent report by the Economist Intelligence Unit.
In 2015, Nigeria had 63 million internet users. This figure is projected to grow to 76.2 million internet users in 2017, according to the Statista portal; this portends a larger market for digital sales and digital financial services. But while access to internet increases steadily, it remains unequal. Low- income citizens, and those dwelling in rural and semi-urban regions, struggle to access these increasingly powerful services.
LOLADE AKINMURELE
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