• Friday, July 19, 2024
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BusinessDay

Potential of digital Nigeria

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The modern wave of internet has taken the second largest continent, Africa, by storm, and Nigeria is no different. According to the World Bank, 32.9% of the population in Nigeria was dependent on the technologies of this age like, High-speed Internet, Broadband and LTE Broadband amongst others, as of 2012. Third generation (3G) mobile and WiMAX wireless broadband services are being rolled out at a rapid pace, backed by new national and international fiber links. Nigeria ranks 8th out of a total of 212 member countries of United Nations in terms of number of internet users. Contrastingly, it occupies 128th spot in terms of internet penetration.

According to Internet World Stats, there were 55.9 million Internet users, representing 32.9% of the population of Nigeria in 2012. During the same year, number of Facebook users totaled to 6.6 million, being the most popular internet activity amongst Nigerians.

According to World Economic Forum, out of every 100 urban Nigerians, 50 access the internet monthly, 58 have internet capable mobile phones and 21 have smart phones.

As per the metric developed by McKinsey to gauge internet’s contribution to GDP, Nigeria has an iGDP of 0.8 per cent, closest to South Africa’s iGDP of 1.4 per cent. Surprisingly, Nigeria lags behind Kenya’s iGDP of 2.9 per cent and Senegal’s iGDP of 3.3 per cent. On the other hand, these facts reflects that Nigeria has untapped opportunities waiting to be harnessed by unleashing the power of internet.

Growth Drivers of Internet

1. Government Investment Nigerian government has started considering Internet-driven growth by providing high-speed Internet access to majority of the population. Public expenditure on internet technologies is $3.14 per capita, which is sixth among the African countries compared below.

25% of expenditure on internet is due to e-government initiatives in Nigeria. Even more public expenditure is expected due to the recently approved National Broadband strategy. This strategy calls for expanding Internet access and high-speed mobile wireless coverage to 80% of the population by 2018, and migrating additional public services online. Also, additional submarine cables are scheduled to go online this year.

2. Growth in Trade – Nigeria recorded 6.81% quarter on growth in GDP in the third quarter of 2013. The businesses related to the high-end communication services have initiated some of the other business like business process outsourcing, software development and local hardware manufacturing. Some low-cost devices are already being manufactured in Nigeria by companies such as Veda Laptops and MiFone along with a number of software development hubs.

3. Entrepreneurship– Konga and Jumia have become major online retailers in Nigeria. Paga is emerging as a key player in mobile payments and Jobberman has created a digital marketplace for employers and job seekers. The new technology dependent startups facilitate more internet usage by the masses. In December 2013, MTN acquired 33.3% stake In Jumia’s parent company, Africa Internet Holding (AIH) while Naspers acquired 50% stake in Konga in first quarter

Impact of Internet on Core Sectors

Agriculture – Nigerian government has started mobile technology to revamp its system for delivering fertilizer subsidies. The new program, Growth Enhancement Support Scheme (GES), launched in 2012, sends subsidy vouchers to farmers’ mobile phones and directs them to the nearest dealer for redemption. Previously, only 11 percent of farmers actually benefited, and huge sums were lost due to corruption. However, introduction of the “e-wallet” program boosted savings, moderated vices of corruption, expanded the number of farmers served, and far exceeded its production targets.

Health –A platform developed by mPedigree is being deployed in Nigeria, which allows patients and clinicians to send a text message with a drug’s identification information and instantly receive verification of the medicine’s authenticity.

Another innovative approach to wed ICT and Health is the Mobile Primary Health Care Programme ‘Mailafiya’ in partnership with Intel Corporation. Nigeria’s Mailafiya program collects and shares patients’ information through a central Internet-based database, where it is analyzed to spot disease trends and mobilize responses.

A hospital in Nigeria had setup a mobile payments system with the help of Paga. Surprisingly, within two months, the new system had collected payments equal to what the hospital had managed to collect in the previous twelve months.

Education – Digitization is also making progress in the field of education. The UNESCO and Nokia “English Teacher” program combines in-person seminars with a service that sends primary-school teachers educational content and daily messages with pedagogical advice via their mobile phones. The project launched with support from British Council and the National Teachers’ Institute of Nigeria is one of the first attempts to employ mobile technology to improve tools for primary school teachers.

Retail – E-commerce sector is witnessing several fast-growing new companies such as Jumia, Konga, and WebMall Nigeria due to digitization. Euromonitor International research firm says online sales in Nigeria nearly doubled over the course of a year, to N3 billion in 2012 from N1.7 billion in 2011. Jumia offers more than 100,000 products online and gets more than 70,000 visitors daily. In 2013, Jumia was the first African winner of the World Retail Award for “Best Retail Launch of the Year”.

Mobile money operators such as Paga are offering support services by establishing centers where customers can collect orders and pay in cash or by e-wallet. According to Central Bank of Nigeria (CBN), the number of payments in the country made by mobile phone more than doubled, to 2.4 million, in the first half of 2012, while Internet payments rose 9.3 per cent.

Conclusion

Among urban residents, it is estimated that 99 per cent have access to mobile phones and 50 per cent go online. Social networking is the most popular online activity, followed by reading news and watching videos. In general, urban Nigerians are more than twice as likely as the average African Internet user to conduct transactions online.

Although, the number of internet users in Nigeria are more in absolute terms but internet penetration in percentage terms is much lower than other African countries. Internet can act as a transformative catalyst to deliver better education opportunities, enhanced medical access and better-quality economic life for the masses of Nigeria. But, considering the government initiatives, private investment and new generation of entrepreneurs, Nigeria will emerge as a strong digital economy in Africa within the next decade.

Ruchi Gupta