Nigeria must make deliberate investment to support technology and innovations to enable it achieve productivity, gain required mileage in growth and inclusive development, Uche Orji, managing director, Nigeria Sovereign Investment Authority (NSIA), said on Tuesday.
Speaking during the BusinessDay breakfast meeting that focused on Macroeconomic Outlook, Innovation & Technology in Abuja, Orji said the Authority, which now has technology and innovation as its newest area of investment, had just concluded a $40 million to drive growth and development of tech firms and start-ups in Nigeria.
“We believe that the existence of a developed venture capital sector is very important in driving technology. We are investing in this because we believe that we must drive capital formation at this phase that will help these companies innovate and survive overtime, because these companies will be the future of Nigeria.
“The tech fund looks at new ventures in Nigeria and NSIA is the leading investment in that,” Orji stated.
According to Orji, the Nigerian technology ecosystem can only grow sustainably and compete globally if there is a developed venture capital sector to provide companies with needed funds to survive overtime.
With the mandate of developing infrastructure and serving as the custodian of economic resources for the next generation of Nigerians through the Nigeria Infrastructure Fund and Future Generation Fund, the NSIA is committed to investing in emerging opportunities that enhance the savings base of the next generation, including technology and innovation, he said.
Recently, the NSIA launched a $200 million Innovation Fund, co-investing with its partners, with a view to investing in start-ups and ventures that seek to optimise emerging opportunities from the changing industries, sectors, and markets.
He said the NSIA was taking a new focus on technology and innovation, considering how countries had leveraged it to drive their economy.
His words: “Our view is anchored on a few pillars; first, we believe that innovation and technology present an opportunity for Nigeria to catch up with the rest of the world. We can leapfrog and get more of the fourth industrial innovation, which was largely driven by connectivity.
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“Secondly, we believe that we have some endemic advantages in technology and innovation in Nigeria, and this is driven by the fact that we have digital natives, with 50 percent of our population below the age of 20, which means they can be taught easily and they can learn these tech things.
“Thirdly, we believe that the cycle in pendulum of technology is swinging closer to Nigeria, it’s getting more expensive to invest in India, it’s becoming more expensive for outsource programming work in India, so we see people starting to move towards Africa and we should be able to capture it.
“Fourthly, the world is now recognising the potentials of tech in Africa – we have three unicorns but we need to be humble about that.”
Orji noted that the value of US tech companies in stock market had doubled between 2010 and 2020, reaching some $9 trillion, more than the entire market capitalisation of Europe.
He noted that in the US in 1998 tech accounted for 7 percent of US stock, but now accounts for 70 percent of US capital market. “This speaks to you about what has happened between 1998 and 2021 and gives you an idea of what happens when countries decide to invest in innovation consistently overtime,” he said.
For instance, in Europe, two to three companies are funded in $1 billion in market capitalisation and that the aggregate size of the European tech companies is about $3 trillion.
Speaking further, the NSIA boss advised that Nigeria would need to have a mix of business, education and innovation to succeed, and must now consider what he called properly, purposefully built science parks where innovators can work in an ecosystem.
Noting that Nigeria does not have the critical mass of people with the right skills to drive technology growth, he emphasised the need for strengthened education, which he said remained a critical component of tech and innovation.
He then stressed a couple of important things that must be done, including, first of all, that the technology must solve an inherent problem and be able to earn return overtime.
There is also the need to ensure that companies that are funded have consistent vision, and be encouraged even when they fail.
Frank Aigbogun, publisher of BusinessDay newspapers, said there was need to view the nation’s macroeconomic outlook through the lens of innovation.
According to Aigbogun, Nigeria is at a critical juncture that requires the nation’s development to be anchored on technology.
Ogbonnaya Onu, minister of science, technology and innovation, in his remark said that Nigeria had continued to lag behind in ensuring effective utilisation of science, technology and innovation (STI) in driving growth in business environment.
According to Onu, businesses, both visible and invisible, depend almost entirely on STI, adding that it will be difficult for business to thrive without the effective deployment.
“For too long our nation has not effectively utilised the strong relationship between STI and business. STI serves as the mother of business. It will be difficult for business to thrive without the effective deployment of STI.
“The production, transportation, storage, processing and marketing of goods and services, depend to a large extent on STI. Agriculture is at least 80 percent dependent on STI.
“Business depends on exchange of goods and services. These goods and services also depend on STI,” he said.
He further noted that Nations, with the largest economies in the world, are those that effectively deploy STI in their building, saying, “Hence, for business to grow faster in Nigeria, and our private sector to be stronger than they are today, we need to effectively deploy STI to nation building.”
Also, Ogho Okiti, managing director, Bussinessday Media Limited, noted that ensuring economy stabilisation was critical to achieving sustainable economic growth in Nigeria.
According to him, the COVID-19 that led to global economic disruption resulted in over 200 million job loss.
He said, “We can’t have the growth we want if we don’t stabilise the economy, because no private individual or investor will want to invest in an unstable economy. Nigeria’s economy needs to be stabilised.
“If the economy must grow as expected in 2022 and beyond, inflation, oil price, foreign exchange and public debt must be addressed.”
While the pandemic escalated Nigeria’s economic crisis, there had been pre-pandemic conditions such as poverty, huge public debt, among others that have affected the nation’s economic growth, he explained.
“We cannot predict economy recovery with the growing debt. There are uncertainties in the Nigeria business environment, uncertainties around proceeds from the passage of Petroleum Industry Act,” he noted.
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