• Sunday, December 10, 2023
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FG invests $1bn in software incubation centres for IT development


 The Federal Government has invested $1 billion to create incubation centres across the country to spur development of local software content. Two of the centres at Yaba in Lagos and Tinapa in Calabar will be inaugurated next week, thereby flagging off the nurture of a new breed of indigenous information technology (IT) businesses and software developers, BusinessDay has learnt.

Nigeria’s N960 billion software

industry, which for long has been dominated by foreign firms, is expected to witness significant growth in the area of local content in the next two years if the centres come into operation.

The over-arching objective of these incubation centres, according to Omobola Johnson, minister of communications technology, is to create 25 successful information communication technology (ICT) firms by 2015.

“The focus of the ministry between now and 2015 is to drive local content and skills development to create employment and sustain the industry. We also want to increase the contributions of the ICT industry to Nigeria’s gross domestic product (GDP). To achieve this objective, we would focus on software, mobile apps development, ICT entrepreneurship, and innovation,” Johnson said, in Lagos at an industry forum.

Analysts told BusinessDay that software and mobile applications development had indeed become a focus area for the Federal Government. This is in view of the country’s earnest search for an alternative revenue source to oil and gas. Statistics have shown that the value of India’s software exports is in excess of $50 billion annually. Government is also looking to replicate such successes in Nigeria – a country blessed with abundant human capital.

Industry watchers have all expressed enthusiasm that these centres, when they come on stream, will help nurture and develop software entrepreneurs who will in turn build successful businesses that would provide relevant solutions to support critical sectors of the economy.

Information Technology Development Entrepreneurship Accelerator (iDEA), a not-for-profit organisation with the aim of nurturing and growing successful software firms, will manage and run the incubation centres.

“The whole thing about the project is that you work through the door with an idea. But when you work out the door of the incubation programme you should not just have that idea but it should have metamorphosed into a successful business, capable of employing people and improving the Nigerian economy,” Helen Anatogu, project manager, iDEA, said

Pius Okigbo Jr, vice chairman, iDEA, predicted that “Nigeria’s software market will be the fastest growth area as it concerns IT in Nigeria.

“In the past five years, there has been an explosion in the use of smartphones and tablets,” adding that it was natural for software developers and businesses to tap into.

“Apple Incorporated paid $8 billion in the last quarter to software application developers who sell their apps and content on the iStore. Essentially, what we want to do is key into this growing market, both for our local requirement and for the global phenomenon that is about to take place,” he said

This, he went on, was the rationale behind Federal Government’s focus (through the ministry of communications technology) on software development as a veritable tool to aid internal development as well as grow the economy, and stressed the need for a deliberate policy on software to help boost growth in the industry.

“India and China had deliberate policies on software development. We have seen well their respective software markets are doing well. Software will be a strong growth area for the development of this country,” he said further.

There is an increase in the number of incubation centres across the country. Two examples are the Co-Creation Hub and the Institute of Venture Design (IVD). The former, a non-for-profit centre in Lagos, was set up by two Nigerian entrepreneurs, Femi Longe and Bosun Tijani, and has partnership agreements with Nokia, Google, Blackberry and MainOne Cable Company, among others.

Co-Creation gives technology firms, entrepreneurs, potential angel investors and government officials a space to exchange ideas with a view to creating start-up. The IVD follows the same philosophy and is part of the FATE Foundation, a Lagos-based non-governmental organisation that develops entrepreneurial skills. FATE set up the institute in partnership with the Centre for Design Research at Stanford University, USA.

Prior to now, the ministry of communications technology, in a bid to foster IT innovation and entrepreneurship, had set up a $15 million IT venture capital fund solely focused on IT businesses. The ministry had secured $3.5 million seed capital from the Nigerian Information Technology Development Fund.

These businesses however will have the initial seed capital provided by government with contributions from private sector to assist incubates become commercially successful. BusinessDay further learnt that a fund manager had already been selected to manage the IT innovation fund.

“Yes, a fund manager has been appointed. But I can’t disclosed the name of the manager now because we have not finished with the paper work. But I assure you, the fund manager comes with years of experience around managing funds for start-ups and IT companies in the US. They have already secured $20 million funding, apart from the seed capital from government,” according to Anatogu, in an interview in Lagos.