The pandemic challenged businesses operationally but it also sped up digital transformation across many economies of the world, creating an immense potential to accelerate productivity growth but Nigeria may struggle to reap the benefit of this transition.
According to research published by the McKinsey Global Institute, digitization could raise productivity growth in the U.S. and Western Europe by about 1 percentage point annually in the years to 2024, more than doubling the pre-pandemic rate of growth.
While this is good news for advanced countries, emerging nations like Nigeria may struggle to reap these benefits due to the lack of infrastructure such as power and high internet speed.
“We have a challenging situation in Nigeria which everyone recognizes including the Federal government state government, private sector, and development organizations,” Andrew Nevin, chief economist at PWC said.
“Having digital access means having certain infrastructures like power and bandwidth, we need to put these things in place to take full advantage of the digital revolution,” Nevin said.
Read Also: Nigeria lags behind Cameroon, Senegal, Ghana on internet speed
Nigeria is one of the most underpowered countries in the world, with actual consumption 80 percent below expectations, according to the International Energy Agency (IEA).
Despite being the largest economy in sub-Saharan Africa peer countries consume far more electricity per capita than Nigeria does currently.
According to the World Bank, Nigerians consume 144 kilowatts/hour (kwh) per capita annually, only 3.5 percent of South Africa’s with a population almost four times that of Nigeria at 58 million. Ghana consumes over twice as much, Tunisia over ten times.
While Nigeria’s power availability is an issue, internet speed is another talking point.
According to Digital Global Overview report by Datareportal, the number of internet users in Nigeria increased by 22 percent to 104.4 million in January 2021 compared to 85.4 recorded in the same last year, this is an additional 19 million people as the pandemic increased the pace of digitization.
However, despite achieving about 50 percent internet penetration, Nigeria’s internet download speed is one of the slowest in the world.
Cable, a UK-based research firm in partnership with M-Lab carried out a worldwide broadband speed league 2020 test in 221 countries to analyze the time frame each country could download a 5GB movie.
According to the report, Liechtenstein occupied the top spot, downloading the movie in 2 minutes, 58 seconds.
Nigeria occupied 183rd globally as it took 3 hours, 24 minutes, 16 seconds to download the movie compared to Ghana which ranked 147th with a download speed of 2 hours, 5 minutes and 4 seconds while South Africa ranked 97th position with 48 minutes, 37 seconds to download.
To make matters worse, the cost of internet use is so expensive in Nigeria despite the stiff competition between telecommunication firms.
An analysis by Surfshark Press United States-based solution provider in a 2020 report revealed that Nigeria has one of the least affordable internet data globally.
The analysis was based on five pillars: internet affordability, internet quality, electronic infrastructure, electronic government, and electronic security. Nigeria ranked 81st out of the 85 countries surveyed.
The report further revealed that an average Nigerian will need to work 27 minutes 55 seconds for 1 gigabit (GB) internet data. This is in a country where over 89 million citizens representing 40 percent of the population live on less than $1.90 a day.
Nigeria could also miss out on a chance to grow its gross domestic product (GDP) per capita.
“Digital transformation could translate into increases in gross domestic product per capita, ranging from about $1,500 in Spain to about $3,500 in the U.S,” the Mckinsey report stated.
Nigeria last recorded a positive Per Capita GDP growth in 2014, as the economy has struggled since a lengthy collapse in global oil prices that began in mid-2014.
Nigeria’s GDP per capita decreased by 0.02 percent, 4.16 percent, and 1.78 percent in 2015, 2016, and 2017, respectively. In 2018, 2019, and 2020, it declined by 0.68 percent, 0.38 percent, and 4.57 percent, a painful squeeze for Nigerians whose average incomes are about $2000, less than half the $5000 of South Africans.
In a recent positive development, Microsoft has announced its intent to collaborate with the Nigerian government to accelerate digital transformation in the country.
Microsoft, through its Airband Initiative plans to improve internet connectivity by installing high-speed internet infrastructure in six regions of the country.
The technology is cheaper and faster to deploy than fibre and has the added benefit of being able to travel long distances and through forested terrain.
“We are setting ourselves a big goal, to bring access to digital skills to five million people in Nigeria over the next three years,” Microsoft president Brad Smith said in a statement.
To help reach this goal, 1,700 trainers will provide blended online and in-person training courses to the country’s youth as well as government workers and over 27,000 new digital jobs will be created in the next three years.
This helps to move Nigeria closer to its goal of harnessing the benefits of digital transformation.
