Options To Fast-Tracking Nigeria’s Digital Economy
TECHDIGEST – Under her digital economy agenda, Nigeria projects to increase her Gross Domestic Product (GDP) to 15 per cent by 2025, thereby brightening her chances of claiming a share of the global digital economy valued at $11.5 trillion. But the dearth of Information and Communication Technology (ICT) infrastructure is clogging the wheel of progress in transforming the country into a regional and global digital powerhouse.This has pushed the adoption and implementation of local content and indigenous capabilities, as well as public-private partnerships, to drive the agenda to the front burner. Assistant Editor CHIKODI OKEREOCHA reports.
With a burgeoning tech-savvy youth population with spending power, increasing smartphone and Internet penetration rates, among other favourable indicators, Nigeria looks good to leverage her digital economy agenda to transform into a regional and global digital powerhouse and, ultimately, boost productivity across all economic sectors.
For instance, with 109.2 million Internet users, Nigeria’s Internet penetration rate stood at 51 per cent of the total population put at 214.1 million in January 2022. Her 176.3 million cellular mobile connections were also equivalent to 82.4 per cent of the total population as at the same period.
Broadband usage has also been rising, moving up from 40.9 per cent in February, this year to 44.5 per cent in July, a figure considered hopeful for achieving the national broadband target of 70 per cent in 2025, according to the Executive Vice Chairman of Nigerian Communications Commission (NCC), Prof. Umar Danbatta.
Ordinarily, the afore-mentioned strong fundamentals, coupled with the growing interest of local and foreign investors, particularly in the country’s ICT sector, should position Africa’s largest and most populous economy to achieve her target of leveraging a robust digital economy to boost her Gross Domestic Product (GDP) to 15 per cent by 2025.
But, while the end-game of increasing the GDP to 15 per cent by 2025 was to brighten her chances of cornering a chunk of the global digital economy valued at $11.5 trillion, which translates to about 16 per cent of the global economy, the dearth of effective and efficient digital infrastructure to catalyse her transition are hurting her chances.
Indeed, the ICT sector’s contribution to the GDP has been one of the fastest growing components and is becoming the country’s most important long-term growth prospect. For instance, ICT contributed 18.44 per cent to the GDP in Q2 2022, while the oil sector contributed 6.33 per cent to the total real GDP in Q2 2022, according to the National Bureau of Statistics (NBS).
However, while an obviously excited Minister of Communications and Digital Economy, Prof. Isa Pantami, attributed the ICT sector’s growing contribution to the GDP to the current administration’s commitment to the development of the digital economy, fears are rife that the minister’s excitement may be short-lived, unless the nation’s inadequate ICT infrastructure (computers, Internet and broadband) are addressed.
According to Information & Technology (IT) experts, ICT infrastructure plays a key role in the socio-economic and technological development of a digital economy, which essentially refers to transformational changes occurring in the way businesses and individuals produce, deliver and consume goods and services in an increasingly digitalised marketplace.
A digital economy allows people to access products and services and creates wealth through social media and e-commerce using the appropriate applications. It boosts the productivity and local and global competitiveness of businesses as they can now use technology to automate their operations and processes. This is because businesses are able to use the Internet to reach new markets and customers.
But as promising as the future of a Nigerian economy based on digital technologies is, the country’s huge digital infrastructure gap may truncate her journey to that envisaged future. Inadequate access to the latest technologies and infrastructure, which are growth catalysts for modern digital economies, may hurt Nigeria’s opportunity of reaping the full benefits of a digital economy.
The Nation learnt that the infrastructure deficit threatening to truncate Nigeria’s transformation to a digital economy runs through the gamut of solid infrastructure (deployment of fixed and mobile infrastructure to deepen broadband penetration); service infrastructure (support for government digital services and the provision of robust digital platforms to drive the digital economy).
There is also soft infrastructure (strengthening public confidence in the use of digital technologies and participation in the digital economy), with the President of Lagos Chamber of Commerce and Industry (LCCI), Michael Olawale-Cole, noting that the multiplier effects of an effective and efficient digital infrastructure on national development cannot be overemphasised.
He said this was why the Federal Government announced a target of $40 billion private capital investment in digital infrastructure by 2025, besides facilitating about $1 billion in private equity. It also inaugurated the National Council on Infrastructure, with a plan of doubling the infrastructure stock of the GDP from 35 per cent to about 70 per cent.
Olawale-Cole spoke at the eighth edition of Information Communication Technology and Telecommunication (ICTEL) Expo organised by the chamber and held in Lagos, last week.
The two-day event, which featured exhibitions, presentations by keynote speakers, and pitch sessions, among others, was themed: “Ensuring Efficient Digital Infrastructure in Nigeria.”
Olawale-Cole said despite the lofty targets set for the country’s digital infrastructure, government lacked the political will to implement laudable policies that could transform the digital infrastructure. Noting that the reason for doubting the government’s 70 per cent target for infrastructure contribution to GDP was linked to the decade-long corruption, he said poor infrastructure was the greatest socio-economic development challenge.
However, the Federal Government has never hidden its intention to transform Nigeria into a digital economy. From October 17, 2019, when President Muhammadu Buhari approved the re-designation of the Ministry of Communications as the Ministry of Communications and Digital Economy, the administration left no one in doubt of its intension to achieve the feat.
The change of name expanded the ministry’s mandate to include a key aspect of the priority areas set for it, which is the “Development and Implementation of a Digital Economy Policy and Strategy.” Accordingly, the new ministry was assigned the role of coordinating all activities related to digital economy, and it has since been doing so.
However, the expansion of the ministry’s mandate was not the only indication of the government’s realisation that the economy’s local and global competitiveness depended on how it deploys technology to transform various sectors of the economy. It has also been paying attention and emphasis on the integration of ICT infrastructure in its policies and programmes.
The emergence of MTN Nigeria and Mafab Communications Ltd, as winners of the keenly-contested 3.5 GHz spectrum auction for Fifth Generation (5G) deployment, as well as the $574.2 million realised from the auction, were indications of government’s readiness to achieve the digital economy agenda.
Operators of cloud computing services to the rescue
While industry operators, stakeholders and Nigerians await the Federal Government to pluck up the political will to walk the digital infrastructure talk, the adoption and implementation of local content and indigenous capabilities to drive the agenda has taken centre stage, with some local ICT companies leading the charge.
For instance, the Director of Operations, Unitellas Edge Cloud, Blessing Omo, said investing in digital infrastructure, particularly edge cloud technologies, which offer cost savings, capacity to scale rapidly, advance cyber-security features and access to powerful analytical tools for processing big data, was key to achieving the digital economy agenda.
Blessing, who spoke on ‘Digital Transformation: Unlocking Value with Edge Clouds in Nigeria’, at the expo, said Nigeria could achieve the next stage of her digital transformation and reap the benefits of cloud services by shifting focus from reliance on legacy IT systems to more cloud-based solutions.
“Edge Clouds are compact or modular data centres closer to where the end users utilise them. Edge Computing brings processing closer to the source of data and enables the unlocking of the value of data assets in real time for critical decision making,” she explained.
Citing the Automation World 2021 Cloud & Edge survey, which said 62 per cent of companies were leveraging cloud technologies as part of their digital transformation roadmap, Blessing said countries like the United States, United Kingdom, Singapore and others, which are implementing cloud policies in governance, have recorded accelerated digital transformation and delivery of essential public and business services.
By 2025, companies around the world are expected to use cloud technology in some way, with 85 per cent of business applications predicted to be based on it. In the United Arab Emirate (UAE), for instance, the share of cloud-related digital transformation spending is expected to increase to 30 per cent in 2024, up from 22 per cent in 2020.
Insisting that Nigeria can follow the same trajectory, the Unitellas chief operating officer said the primary benefits or values that implementing edge clouds in Nigeria would deliver included improved latency, reduction of response time, conservation of network resource (low-bandwidth costs), and improved security and privacy, among others.
Others are reduced capital flight in foreign exchange, increased confidence in local technology, constant availability of mission-critical applications, and cost savings due to pay per use without CapEx investments.
The Managng Director, Unitellas Edge Cloud, Mr. Smith Osemeke, harped on the need to prioritise the use of available local cloud technologies to cut off latency and drive Nigeria’s digital transformation instead of relying on the use of public clouds, outside Nigeria’s shores, with its attendant security and latency-related issues.
Osemeke, who was one of the discussants on the Expo’s panel session focused on ‘Education, Digital Learning and Digital Infrastructure in Nigeria,’ said the challenge of online learning in Nigeria still boils down to digital infrastructure hence, the need to interrogate what government is doing to ensure the required infrastructure are available locally.
“There is need to create more awareness about our local capabilities. The infrastructure is here to drive Nigeria’s digital transformation. We must encourage local content to create jobs and conserve foreign exchange,” he said.
For the Managing Director, Galaxy Backbone Limited (GBB), Prof. Mohammad Abubakar, public-private partnership (PPP) holds the key to providing efficient digital infrastructure.
Abubakar, who was represented at the Expo by the Group Head, Business Development, GBB, Mr. Dauda Oyeleye, said to further solidify GBB, a government agency’s stand on PPP, the company created an Enterprise Business Group (EBG) tasked with the responsibility of managing private customers as well as structured partnerships.
He said GBB had a pervasive fibre connectivity network across the nation, which the private sector could key into. “We have established partnerships with managed service providers, real estate developers, as well as other local organisations to reach the goal of attaining a digital Nigeria.
“Our state-of-the-art infrastructure has been instrumental in sealing these deals and the partnerships just keep getting better. `GBB has taken steps to secure public confidence in the use of its digital infrastructure, through trusted international third-party attestations and would continue to redefine collaboration within and outside the country,” Abubakar said.
On his part, the Chairman, Heirs Holdings, Tony Elumelu, called for the scaling up of Nigeria’s digital infrastructure through adequate multi-sectoral investments to accommodate the country’s rapidly-growing digital economy.
Source: the nation