Nigeria’s digital revolution is fast, but it can be faster
Twitter is Ghanaian?
On Monday, 12th April, Twitter announced its decision to open a regional office in Ghana and recruit 11 people. Specifically, it mentioned that its new team members would be working remotely under its work-from-home policies while it explores “the opportunity to open an office in Ghana in the future”. So, tech companies are moving into Africa. In September 2020, Facebook revealed plans to open an office in Nigeria, in the second half of 2021.
Why did Twitter choose Ghana? Ghana’s support for free speech and online freedoms made it the company’s choice for its first African location, Twitter said. It also added that Ghana’s appointment to host the secretariat of the African Continental Free Trade Area played a part in the decision. Although its office will sit in Ghana, Twitter however made it clear that its target market is Nigeria.
On Monday, Twitter put out job advertisements. The company said of its curator positions: “This role is based in Accra, Ghana and focused on Nigeria.” It mentioned that the ideal candidate to occupy the positions “should have a deep, non-partisan, understanding of Nigerian news and politics.” Also, candidates with understanding of English Pidgin, Yoruba, Hausa and Igbo, will have advantage.
It is understandable – why Twitter would work towards catering for the Nigerian audience. Nigeria has the numbers. According to Statista, 28 million Nigeria used social media in 2020 alone. 61.4 per cent of these have active Twitter handles. Meanwhile, as of January 2021, 8 million Ghanaians are social media users. Only 28.78 per cent are registered on Twitter.
Again, why did Twitter choose Ghana? Local reactions on the social medium itself immediately pointed to the comparative ease of doing business. Many Nigerians pointed to the seeming commitment of their government to surprising businesses and stifling innovation. They had examples to offer too. Since December 2020, Nigeria’s Communications Commission has barred telcos in the country from selling and registering new SIM cards. Last Thursday, the Securities and Exchange Commission (SEC) asked investment-tech startups to stop offering foreign stocks to Nigerian investors.
Well, Nigeria’s digital revolution is upon us. In the coming years, social media platforms like Twitter, Nigerian regulators and concerned Nigerian citizens will have a lot to talk about.
Digital Nigeria
At 25%, the global digital economy is growing faster than the global economy. Nigeria’s digital economy is making its own strides, contributing 14% to GDP in the third quarter of 2019. The NIPC (Nigerian Investment Promotion Commission) expects Nigeria’s digital economy to have generated $88 billion by 2021. Nigerian startups attracted $663.24 million in venture capital last year, the largest share in Africa according to Weetracker.
Nigeria is experiencing a digital revolution. Rapid technological advancement is driving solutions. Perhaps the most benefitting sector is Nigeria’s fintech. Mobile banking solutions are driving the banking sector. Traditional banks and mobile network operators have included fintech solutions in their product portfolio. ALAT by Wema Bank and 737 by GTBank are some of the digital banking platforms that offer financial services 100% online.
The fintech market in Nigeria is Africa’s most active. Nigeria is home to over 200 fintech companies. It raised $600 million in funding between 2014 and 2019. In 2019, it attracted 25 percent ($122 million) of the $491.6 million raised by African tech startups. Platforms like Flutterwave and Paystack are enabling online payments for businesses. Piggybank helps Nigerians save, PayLater and QuickCheck allow users access quick loans.
The driver – mobile technology
Mobile phone usage offers the most realistic means of digital inclusion. While Nigeria’s internet penetration rate is about 40%, its mobile phone penetration rate is 87%. Meanwhile, the adult literacy rate is 62%. Clearly, people do not need formal education to use phones. Do they need to be wealthy either? No. The Nigerian market is dominated by recycled phones. Also, mobile phone brands like TECNO, Infinix and Itel that are made specifically for the low budgets of Nigerian users.
Mobile technology in Africa is its fastest growing market. Mobile broadband is accessible to two-thirds of the population. In Nigeria, mobile phones afford small businesses the means to participate in e-commerce. Nigeria’s e-commerce sector is Africa’s largest, valued at $13 billion. Small businesses have become smart – using social media apps to build strong customer relationships and earn more revenue.
The challenges
Nigeria’s digital revolution can be faster, better. Well, if it wasn’t stifled by the twin challenges of power supply and internet access, a lack of digital skills and overwhelming regulation.
Power supply
While the rate of global access to electricity is 87 percent, the rate in Nigeria is a sultry 45 percent. While the country has the potential to generate 12,522 megawatts of electric power from existing plants, it generates an insufficient 4,000 MW on most days. 20 million households have no access to power supply. In addition, electricity tariffs recommended by the Nigerian Electricity Commission (NERC) have recently skyrocketed. Electricity directly affects digital inclusion because electronic devices are perpetually powered by electricity. On the other hand, lack of access to stable electricity affects the running costs of local businesses and ultimately, Nigeria’s attractiveness to foreign, innovative companies.
Access to the internet
In addition, many Nigerians lack access to the internet. Related problems include poor connectivity and exorbitant costs. In December 2019, the Minister of Communications and Digital Economy, Dr Isa Pantami said that a pervasive broadband penetration would make Nigeria truly digital. His ministry launched an ambitious plan to increase broadband penetration to 90% by 2025. Accordingly, internet speed would be a minimum of 10 megabytes per second (Mbps) in rural areas and 25 megabytes per second in urban areas. Also, data would be affordable at ₦390 per 1GB. Well, now there are 4 years to go!
Digital skills
Low enrollment in basic education and the poor quality of that education also cripples digital inclusion. The exclusion of 21st century digital skills in the curricula of schools confines these skills to a slim, privileged share of the population. In addition, the absence of up-to-date training in STEM (Science, Technology, Engineering and Mathematics) and the inadequacy of equipment in schools ultimately result in the exclusion of the poorest Nigerians from the benefits of the digital world.
Regulation
Finally, Nigeria’s regulatory oversight is still adapting to digitization’s pace. However, it will likely increase as startups, and the disruption they come with, become more mainstream. Regulations pose a threat to innovation. First, old regulations may fail to keep up with innovations in technology and so stunt the growth of the sector. According to the World Economic Forum, Africa needs to balance the perennial demands of fast-moving innovation against the slower pace of regulation. Second, regulators must decide on how to regulate innovation without killing it. Government must resist the urge to control or levy entire value chains. Stifling innovation is ultimately costly.
However it goes though, technology and digitization will be alright. Innovation always wins. Disruption can only be delayed, never denied. More startups are rising, more people are becoming literate and included, more reliance is being placed on digital solutions and currencies. It is already here – Nigeria’s digital revolution. In 2019, after visits to African countries, Jack Dorsey (Twitter’s founder) concluded that “Africa will define the future”, Surely, Nigeria, and its lion share of Africa’s digitization will define the future, whether or not a certain office is situated here.