• Sunday, June 23, 2024
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BusinessDay

How brain drain threatens local tech talent recruitment

Nigerians without access to telecom services now at 27 million

Nigeria’s tech operators and other related industries are struggling to keep their talents away from companies abroad offering better incentives and a world-class office environment.

This is despite the Nigerian tech ecosystem leading the rest of the continent in the number and amount of funding raised so far this year.

Unfortunately, no matter how much they try, these local companies find out the hard way they don’t stand a chance with the ambitions of the recruiters across the Atlantic Ocean.

Today, Nigeria leads the rest of Africa as the country with the most immigrants in countries like the UK, US, and Canada.

According to the UK government, the number of Sponsored Study grants to Nigerian nationals rose to a record high of 20,427 between June 2020 and June 2021 compared with the previous. It is the highest number of visas granted in a single-year period to Nigerian nationals on this route.

Nigeria has also been leading the rest of Africa in the number of immigrants to Canada since 2019 and consistently made the top five countries contributing the most immigrants to the country in the world. In 2019, where the Canadian government welcomed 341,000 immigrants, Nigeria accounted for over 12,000 immigrants. While the number of Nigerian immigrants reduced to 3,350 as of August 2020 due to the COVID pandemic restrictions, the country notes it is on course to meet its 401,000 target for 2021.

Recently, tech operators and stakeholders took to social media to narrate how many employees were leaving their jobs to “Japa” from Nigeria.

Read also: Here are five Nigerian tech companies in YC Summer batch

Japa is a Nigerian slang derived from the Yoruba language, meaning to run swiftly out of a dangerous situation. It originates from two Yoruba words ‘Ja,’ which means to run and ‘Pa,’ which means to make something seem larger, better, worse, or more important than it really is or needs to be.

In the Nigerian tech ecosystem, ‘Japa’ has become the preferred slang for colleagues who are relocating out of the country to work in other countries with better work conditions.

“We are laughing about this but it is decimating companies. Founders are leaving too as they can’t hire anymore,” Victor Asemota, growth partner at AnD Ventures, notes, saying, “I laugh when people are raising and I look at how much they want to raise. Investors’ money is effectively now used to train people to migrate. It is what it is.”

Nigeria is one of the biggest producers of software programmers in Africa. The continent has an estimated 690,000 professional software programmers with half of the number shared between South Africa (133,195), Egypt (125,270), and Nigeria (114,536).

While that number may seem significant in absolute terms, it still does not paint the whole picture of the country’s capacity. With the country’s population at about 200 million, it would mean that there are about 556 developers per one million people, data from Tunga.io show.

This has implications for the businesses in Nigeria. According to a report by the National Bureau of Statistics (NBS), the total number of enterprises in Nigeria was estimated at 41.5 million as of 2019. That means about 41 developers per one million businesses. In essence, the number of developers accessible to Nigerian businesses is very limited. It becomes a double jeopardy when they are being taken out of the country by big tech companies.

Before the COVID-19 pandemic struck, tech was not very big on the budget list of many local companies, except it was a tech company. Nigeria has the largest concentration of tech startups in Africa with about 750 companies. The pandemic drove digital adoption into a frenzy to the point that most non-core tech companies say they cannot survive without technology, and banks like Guaranty Trust Bank (now GTCO plc) are starting to refer to themselves as tech companies.

The rise in digital adoption pushed the market value of software engineers higher than it was before. The report from Tunga shows that the average Nigerian developer is paid locally between 800 to 900 euros (about N450,000) per month. On Glassdoor, the national average for a software developer is N239,000 per month.

As their market value rose, many developers also discovered it was more advantageous to work as a freelancer for different companies than be in paid employment receiving salary from one source.

Freelancing also gave many developers the flexibility to work from any remote location. To be fair, this was mostly popularised by Andela, which became a fully remote company in 2020. But freelancing comes with consequences mostly negative for local companies.

“There was a time hiring a Nigerian tech freelancer was suicidal to projects because they were never dedicated and distracted. People like @subomiplumptre wrote epistles about the travails of hiring freelancers here. It was a nightmare. People got multiple gigs and didn’t deliver,” says Jennifer Onyebuagu, chief commercial officer, Voriancorelli, a Lagos-based agritech company.

Most of the distractions come from tempting offers outside Nigeria. Startups in Europe, Germany in particular, are hiring Nigerian programmers via LinkedIn, according to Tunga. The mid-level salary is $65,000 per year. Some relocate, others work remotely from home on their Macbook plugged into a solar-powered inverter. Some have multiple jobs. The income and conditions are better than local coding jobs.

“Check on Nigerian banks, they are not smiling. Japa is hitting them badly where it hurts; in technology departments,” Asemota states.

This is perhaps behind the recent investment by a Nigerian bank in a tech company that builds and trains software engineers. Recently, Decagon raised a $1.5 million seed round and a student loan financing facility of $25 million from the Nigerian financial institution Sterling Bank. Decagon plans to utilise the money to address the low supply of developers in the country by training and connecting engineers to work remotely with both local and international companies.

“Microsoft, Facebook, and Google have all invested in building engineering offices in Nigeria, but most other companies can’t afford to do that, so we help them access top talent to work as remote engineers,” Chika Nwobi, CEO, Decagon said.