Nigeria is the largest market in Africa with a population of over 200 million. Its gross domestic product stood at about $440 billion in 2021, according to the World Bank.
Over the last few years, the country has attracted a lot of technology start-ups and entrepreneurial activity.
Statista estimates that Nigeria has five times the number of start-ups in Kenya and over 15 times the number of start-ups in Egypt with a projected 3,330 start-ups working out of Nigeria as at 2020. Nigeria stands at the top of the pile, as over 600 million of venture capital has flowed towards the country’s tech companies in the first quarter of 2022.
The digital economy presents the biggest opportunity for young people to participate in the economy as it provides many avenues of value addition and wealth creation.
For this class, there has been a seemingly inability to earn a good living but then e-commerce has the greatest potential to reduce both unemployment and underemployment.
The digital opportunity across the continent is large and growing. This is a huge opportunity that Nigeria can tap into considering our population size and the sheer amount of economic activity that we generate. To capitalize on this potential, careful consideration must be given to the ease of doing business and making trade easier.
The government’s commitment to ensuring that doing business in Nigeria becomes very effective has been well documented.
Nigeria is currently ranked at 131 with marked improvements around company registration and other indices. In a very commendable move, President Buhari recently set-up a 27-man committee to provide the oversight needed to bring about a veritable structure for accelerating achievements in the digital economy among other set objectives.
It must be reiterated that businesses that can harness the power of the digital economy to provide convenience, innovative products and services and efficiency to consumers are more likely to scale and grow
As innovators and entrepreneurs continue to use technology to create opportunities and drive development across industries like logistics, financial services, health, transport and many other sectors, I’d like to highlight three touchpoints that stakeholders must pay critical attention to. This is with a view to cashing in on the emerging opportunities.
Firstly, increasing internet penetration, especially across rural communities and low-income areas, should be a priority.
Government can incentivize telcos and other operators to increase mobile penetration across the country. More tech companies can also design apps and mobile solutions that are cost effective from a data usage point-of-view. Democratizing internet access for all is a solid step towards making trade easier and improving the ease of doing business in the country
The Nigerian market is still confronted by challenges around informality, information asymmetry and a low-trust business environment. To solve some of these issues, stakeholder engagement is necessary.
Imagine how much gains can be made by engaging heads of informal associations and opening their eyes to how technology can help their businesses scale through facilitating access to wider markets and creating other efficiencies.
This again ties in with the power of the internet and technology to drive sustainability of local businesses and increase employment generation.
Lastly, education is fundamental. A Mastercard Foundation survey revealed that 55 percent of SMEs in the African retail sector consider training and upskilling staff as a top driver for growth. Increasing access to digital education especially for public primary schools will be a good way to start. At secondary level, formation of tech and startup clubs, where the seeds of entrepreneurial education can be sown could also help move the needle in expanding access to the digital economy.
The introduction of specialized programmes that offer a wide range of support for students in different fields of study to set up their own tech-enabled businesses, entrepreneurial grants and awards can also contribute positively. An investment in knowledge has been said to pay the greatest dividend.
The opportunities for digital disruption across Africa are big. Tech-enabled businesses are major contributors to the economy, job creation, productivity enhancement and generally positively impacting the lives and livelihoods of many on the continent. Nigeria has got a key role to play if we can key well into these opportunities.
Wale is the general manager for Sendy, English West Africa