How to drive economic growth in Nigeria with digital technologies – sample roadmap for 2023 -2027


Nigeria is blessed with a population of over 200 million people, but her GDP per capita was just $2058 (USD) in 2021. When compared to countries with similar structural challenges such as Peru and Brazil with GDP per capita at $6,692 and $7518 respectively, Nigeria is grossly sub-optimizing its citizens.
Nigeria can accelerate economic growth, lift its citizens out of poverty and quadruple its GDP per capita in four years if she treats her population as her most important asset (not oil and gas) and redirects national planning to optimize productivity of her population. We strongly believe that digital technologies should be an integral part of achieving these objectives.

Digital technologies significantly increase productivity when deployed appropriately. Data from the World Bank and other global financial inclusion watch dogs indicate that digital tools empower people and help the poor unlock business growth and build financial health. This paper makes a case for how an incoming government in Nigeria can strategically leverage digital technologies to unlock the productivity of her citizens and accelerate economic growth. The paper provides some examples such as Unified Payment Interface (UPI), fractional investing, e-auctions and gig-work, but these are not in any way exhaustive. The overall intent is to elicit further discussion and a deeper dive into how simple digital technologies can accelerate Nigeria’s economic growth. Lastly, the intent is not to digitize every aspect of the Nigerian economy. Since a new government needs to establish credibility very quickly, we have selected a limited number of areas where digital technologies can unlock value as quickly as possible.

Proposed Initiatives
Start with the Industries which employ 87.3% of Nigerians and make them more productive. Wholesale/Retail Trade and Agriculture employ 53% and 34.3% of Nigerians respectively. 96% of these employers are micro enterprises which employ 1-10 people on the average and generate an annual turnover of less than $100,000. We recommend deploying digital technologies to eliminate friction and inefficiency in the value chains of these two Industries. This could have the greatest impact on economic growth within the shortest possible time. One of such critical areas is payments. Micro enterprises have low value transactions. For them, bank transfer charges and payment service fees pose significant transaction costs. For this reason, they transact predominantly in cash, which is inherently inefficient. Transacting in cash also keeps them in the shadow economy and locks them out from accessing more comprehensive financial tools and resources that could make their businesses grow. One solution to eliminate this friction and inefficiency is replicating India’s Unified Payment Interface (UPI) in Nigeria. UPI is a digital interface which anyone, can use to transfer money between bank accounts or digital wallets across a single window. This means one can send or receive money or scan a quick response (QR) code to pay an individual, a merchant or a service provider to shop, pay bills or authorize payments. It is simple, instantaneous, and most importantly free. Because it is free, even Indian fruit and vegetable merchants (see picture below), with very low value transactions such as $2 and below can make and receive payments digitally without incurring bank charges and payment service fees.

This moves more transactions from cash to electronic payments and exponentially expands the size of the formal market. India launched UPI in 2016 and, in October 2022 alone, 7.3 billion transactions valued at $144 billion were processed through UPI. Banks and fintechs in India such as PayTM and Google Pay provide their apps as the gateways to access UPI but do not charge customers for making payments on UPI. Instead, they compete in providing other services such as Credit and Insurance to customers. We have enough banks and fintech companies which can do the same in Nigeria. All we need is for the Nigerian Interbank Settlement System to be given the mandate to create a UPI Portal.

Prioritize capital projects in Wholesale / Retail and Agriculture and give Nigerians the opportunity to invest in them. For example, a road that links farming communities to markets need not be built and / or its concession owned by one entity. This is a recipe for rent capture which concentrates wealth in a few hands and truncates the trickledown effect of economic growth. By utilizing digital technologies, the government can convert such a road to an investable asset open to all Nigerians through fractional investing, thus devolving opportunity rather than concentrating it in a few hands. If a vulcanizer can invest N5000 in a road project and earn returns from tolls on the road, this provides economic empowerment at the grassroots level.

Actual construction of the road can also be fractionalized and opened to several indigenous companies via an auction on an electronic marketplace thus creating employment for more people. Companies like Jumia already run marketplaces in Nigeria thus and can provide knowledge on how to replicate this for construction work.

Facilitate a service-driven remote work/gig-economy. 25.7 million Nigerians between ages 20 and 49 are digital natives who already own smartphones (data from This is more than the population of the Netherlands, Sweden or Belgium. A large proportion of this demographic is today unemployed, underemployed, or exploring emigration. It is unlikely that the economy will create enough new formal jobs to employ 100% of this demographic in four years.

We recommend that the government deliberately enters strategic demand-side partnerships with foreign companies or sovereign entities which have significant net demand for workers, especially in Technology, Finance and Professional services jobs suited for remote work This should be complemented by supply-side partnerships with Tech companies such as Google and Microsoft, and local companies such as Outsource Global which are already providing remote business process outsourcing services for offshore companies .

They can train and certify the people and provide a bridge for placing them in remote roles for offshore companies. According to the Economist, Argentina wants to launch a preferential exchange rate for remote workers selling their skills abroad and earning dollars: such a “tech dollar rate ” would ensure that they were not exposed to currency devaluation. Nigeria may consider such to encourage FX repatriation from remote workers.

Eliminate friction and bottlenecks in critical government services.
Nigerians waste a significant amount of time and resources in seeking basic services from several government agencies. They experience delays and demand for bribes when renewing a driver’s license, processing a national ID, a Nigerian passport, reporting a security incident or registering property title. Unlike private entities where employee salaries and career progression are generally aligned with customer satisfaction, this is not the case in public Nigerian agencies. We recommend an intervention comprising: pay for performance, an appointment and queue management system and a customer satisfaction rating. In the agencies providing the services referred to above, we recommend converting the existing employee salary grid to a combination of a guaranteed and variable component. Ideally the ratio should be 60%-70% as guaranteed salary and 30% – 40% as variable pay. The variable portion should be paid based on a sliding scale of satisfaction ratings by Nigerians who use the services of these agencies.

Read also: Unlocking Nigeria’s economic potential: Overcoming structural barriers

With this proposed grid, the higher the rating a policeman or immigration official receives from customers, the more of the variable portion he/she is paid. Over time more salary budget should be allocated to high performers such that a highly rated policeman should be able to double or triple his or her base salary. When delivering good service pays, productivity rises dramatically. With this in place, the next step would be creating simple but effective digitally enabled appointment scheduling, queue management and post-visit customer satisfaction surveys. No doubt, tackling endemic corruption in Nigeria will require several other systemic initiatives; however, these simple interventions can provide quick wins where it is needed the most.

Digitize government to people (G2P) transfers. Ensure that any Special Fund for “poverty alleviation” or special Home Fund as stated in the 2022 amended budget, for example, is transferred only to KYCed digital bank accounts or fintech-enabled digital wallets of the individual recipients and not paid out in cash. This will improve traceability and accountability for such Funds in the future. Forensic digital tools should also be deployed by Independent Auditors, to audit the billions of dollars budgeted and disbursed for Social Programs in the past ten years. Identified breaches should lead to recoveries and enforcement action.

These proposed initiatives need to be complemented by a number of enablers and we have identified some below:
Citizenship reorientation: Nigerians appear to have limited understanding of the Social Contract between the people and the State, their power to enforce their rights under the Constitution and the fact that Democracy requires (indeed mandates) active participation of the people to be successful. We propose that the government initiates a comprehensive citizenship reorientation program involving but not limited to the following;

Adding a webpage on the Nigerian Immigration website such as to provide Nigerians with accessible information on their Rights and Responsibilities as citizens. The webpage must also include helpful practical tips on the when, what and how to enforce those rights and discharge their responsibilities. Today, the Nigerian Immigration Service focuses exclusively on border control, issuing passports, immigration and not on citizenship matters like its counterparts. See for example.

Developing a simple FAQ of 100 points on Citizenship Rights and Responsibilities published on the Immigration website as indicated above and taught in all public schools from the primary level to universities.

Encouraging responsible adults to volunteer as Citizenship Ambassadors in the Local Government Areas where they reside. Their service to their communities could include modeling and teaching Citizenship Rights and Responsibilities in a democratic government. Their service will be recognized, not through remuneration, but through stewardship awards and honorifics. The more that true service is celebrated, the more it becomes desirable.

Budgeting for Productivity: Instead of a National Budget based on expected oil revenue and how to spend it, the National Budget should be based on the outcomes we want to achieve such as jobs and the average household living income we want Nigerians to generate net of tax. The Global Living Wage Coalition estimates that an average rural household in Nigeria needs to earn NGN 191,909 (USD 462) for 2022. Living income is the amount a typical size family needs per month for a basic but decent life. This amount was NGN 138,678 (USD 365) for 2020 and the updated amount for 2022 takes the rate of inflation for the country between mid-2020 and mid-2022 into account. Accumulated inflation in this period was 38.38%. After setting these objective benchmarks, the government should work backwards to identify the specific direct and indirect initiatives needed to drive those outcomes, define the private/public sector responsibility matrix for those Initiatives and then develop an Income and expense budget for the government to discharge its own responsibilities. Budgeting for productivity should happen at all tiers of government. Indeed, the National budget should be a roll-up of productivity budgets developed at local government, city and state levels.

Join the race for global competitive advantage in emerging Industries. Sadly, as Nigeria is still trying to catch up in the 21st century, the race for dominance in the next century is already in full gear. The next 10-30 years will be defined by advances in Artificial intelligence, Machine Learning, Deep Learning and Clean Energy technologies. The battle for access to the raw materials and manufacturing capacity to convert them to the components which will power these Industries is raging. It took China over a decade to build its smartphone manufacturing capacity. India has learned the template and has attracted private investment in plants that handle the final assembly of smartphones. As its assembly volume grows, India will move to the next phase which includes cultivating hundreds of smaller local suppliers of components, persuading local governments to build train lines, highways and other infrastructure for moving parts around. When China decided to pursue electronics manufacturing it single-mindedly corralled all the competing interests of provinces and local governments to focus on that objective. Nigeria will need to select which emerging technology she wants to bet on and do the same.

Security: It is evident that no sustainable or optimal economic growth can be achieved in an environment of pervasive insecurity. The Government needs to nullify the activities of ALL non-State actors contesting sovereign space with the legitimate Government of the country. While focused, surgical, and robust Security Operations are waged against these malevolent actors, there are some tactical steps to disincentivize robbery, kidnapping and other forms of criminality that have escalated.

Criminals often spend their ill-gotten money on ostentatious assets such as real estate and luxury vehicles. Government can require real estate agents/brokers and luxury car dealers to submit some contact details (e.g phone numbers and national IDs) of non-accredited customers who made purchases to a centralized online database accessible only by certain security agencies. Security agencies can triangulate data from banks and this database to identify potential criminals.

Diversify the Security Agencies. In a multi-ethnic society like Nigeria, no single ethnic group (or religion) should comprise more than 15% of the total workforce and the senior cadre of any security agency (including the Military Branches). This diversity builds trust and is easily achieved in four years through recruitment, talent development and promotion.

Consider devolving more of the policing responsibility to States. Policing in the world’s largest democracy (the United States) is a state responsibility enshrined in the constitution. Community policing requires local knowledge of a people, their environment and their cultural norms to be effective. Nigeria needs to explore this model.

Contributed by the Chairwoman of Digital / eCommerce group of the Lagos Chamber of Commerce and Industry

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