TECHDIGEST – The information and communication technology (ICT) sector in Nigeria has seen significant growth and development in recent years. The National Bureau of Statistics (NBS) revealed that the sector contributed 18.44 per cent to the nation’s GDP in the second quarter of 2022. Experts argue that the country’s youth-dominated 210 million-strong population is driving demand for ICT products and services.

The government has made significant efforts to promote the development of the ICT sector and increase access to ICT infrastructure and services. This has included initiatives such as the National Broadband Plan, which aims to increase broadband penetration in the country, and the National eGovernment Master Plan, which aims to increase the use of ICT in government operations and services.

Of course, there are several challenges that the Nigerian ICT sector faces, including a lack of reliable and affordable electricity, multiple taxations, regulatory bottlenecks, limited access to ICT infrastructure in rural areas, and a dearth of skilled ICT professionals. Despite these challenges, the sector has continued to grow with the potential to play a significant role in the country’s economic development.

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Looking ahead into 2023, here are potential trends that may shape the development of ICT in the new year.

Increased adoption of cloud computing

As businesses in Nigeria look to reduce costs and improve efficiency, many will turn to cloud computing solutions to store and process data. There are a growing number of important players in this space including Rack Centre, Cloudflex Computing Services Limited, and Layer3Cloud among others.

Growth of the e-commerce industry

Nigeria’s large and rapidly growing population and the adoption of mobile devices and internet access has made e-commerce more accessible. With improvements in electronic payment and logistics sectors, the growth trend is likely to continue into the coming years. Konga, Jumia and Jiji continue to show what is possible in this space.

Expansion of mobile broadband

The proliferation of mobile broadband is expected to continue in Nigeria, driven by the increasing demand for data services and the roll-out of 4G and 5G networks. The Nigeria Communications Commission (NCC) in 2021 granted 5G licenses to MTN Nigeria and Mafab Communications with Airtel joining the party this December. MTN is known to have rolled out services in certain cities. Next year holds promises of more roll-outs and improved access to 5G services in general.

Rise of fintech

The fintech industry in Nigeria has seen significant growth in recent years, and this trend is likely to continue as more people turn to digital financial services. Reports suggest that there are over 200 fintech firms in Nigeria rapidly helping to bridge the financial inclusion gap. The fintech ecosystem covers businesses focused on mobile payments, digital banking, merchant solutions and personal finance among others. Interswitch, Flutterwave, Paystack, PiggyVest, Paga, and E-tranzact are some of the biggest players in this space.

Increasing use of artificial intelligence (AI)

The use of AI in various sectors, including healthcare, education, and agriculture, is expected to increase in Nigeria as the country looks to leverage technology to solve problems and improve services. The early players here include Lare Ayoola’s IoT Africa Networks Limited, Kobo360 and Data Scientists Network.

Growth of the outsourcing industry

Nigeria’s highly educated workforce and lower labour costs make it an attractive destination for outsourcing. This trend is likely to continue as companies look to outsource certain business functions to save costs, improve productivity and boost profitability. Renda, Philip Outsourcing, and Workforce Group are leading players in this space.

Increased adoption of digital skills

As the ICT sector continues to grow, there will be greater demand for individuals with digital skills. This trend is likely to drive the development of training programs and initiatives to help people acquire the necessary skills. Governments at different levels are making tremendous efforts in this space. The National Information Technology Development Agency (NITDA) through its subsidiary, the National Centre for Artificial Intelligence & Robotics (NCAIR) is training one million developers with a focus on Python for Machine Learning and Data Science. The Lagos State government has also commenced the second phase of the Eko Digital programme which aims to empower one million youths in the state with cybersecurity skills. Numerous other initiatives are ongoing in the private sector space.

ICT will remain a significant proportion of the economy in the foreseeable future. Human capacity development and infrastructure deployment will however, dominate the ICT space in 2023.

Happy New Year in Advance!

•Eromosele, a corporate communication professional and public affairs analyst lives in Lagos.

The post Trends that will shape Nigeria’s ICT sector in 2023 appeared first on Tech Digest News.

 By Elvis Eromosele

TECHDIGEST – The Nigerian telecommunications sector must have nine lives. No, it is not a cat. It is however almost always in a near constant mortal struggle with the forces that be – read, government and its agents. The fact that it’s still here means that it has somehow managed to survive, remained sustainable and even dared to thrive. It is a phenomenon that ought to be studied.

Every indicator shows that the telecom sector remains the bright spot in the nation’s weak economy. It drives socio-economic development, boosts productivity and contributes to improving the lives of citizens like no other sector.

The COVID-19 pandemic impacted negatively on the global economy by precipitating lockdown and economic disruptions with transport, tourism and aviation sectors tumbling. The telecom sector however continued to “buga”. It saw an increase in voice service and massive growth of digital channels for daily routine activities ranging from telecommuting to entertainment and social engagements. The sector witnessed growth and saw huge profits as financial reports from major operators show.

The Nigeria Telecom sector is a gift that keeps on giving. It has witnessed strong growth in recent years and is expected to have continued growth over the foreseeable future. The growth in the sector, according to industry watchers, has been driven by the increasing population, growing demand for communication services, and rising adoption of smartphone services. Some experts have pointed to strong support by the regulatory authorities which in recent times has led to the licensing of the 5G network in the country – a feat some have called the first in Africa.

Investors in telecom operations are smiling at the bank. It is not surprising therefore that everyone wants a piece of the action, even the government.

It must be stated that the government collects the value-added tax, annual operating levies, licensing fees and duties among others. This is in addition to all the other statutory taxes including PAYE and withholding tax.

Now, there are reports that the Finance Minister, Zainab Shamsuna Ahmed, is actively pushing for another tax, a five percent excise duty on telecoms services. Most right-thinking Nigerians, including, interestingly, the Minister of Communications and Digital Economy, Prof Isa Ali Ibrahim Pantami, have kicked against it. If a recent news report is to be believed, the finance minister is not backing down.

If the government is keen on milking the telecom sector, it should at least step up on its behalf and help tackle some of the long-standing issues that have held the sector back.

The challenges are not new. Many of them have plagued the sector since the liberalization of the industry. Industry experts are quick to point out the fact that these challenges are also opportunities when viewed through the right lenses.

Here are seven of the most pressing challenges, with what I hope are feasible solutions. The government should give it a look-in if doesn’t want to kill the goose that lays the golden egg.

Difficulty in accessing long-term funds for the industry – The government must hasten to establish an ICT Bank. While it should be in the mold of the Agricultural Bank, it should operate like a venture capital entity. So, after due diligence, the ICT Bank will invest in tech starting with a clearly stated exit /pull-out date. I propose an initial take-off grant of N200 billion naira only.

Right of way – The goal of the right of way policies should not be revenue generation but to facilitate the speedy deployment of telecom infrastructure. In the short term, states can take a leaf from Ekiti State which reduced telecom’s right of way charges by 97 percent. For the long term, states should install road ducts on a build-and-lease basis. The federal government can set an example here by installing ducts on all new federal roads and leasing to operators based on an agreed realistic billing scheduled for usage.

Multiple taxations – Again, governments at all levels, need to stop seeing telcos as only cash cows. Efforts must be towards proper harmonization of taxes and levies and so make it uniform across every state and locality. This will undoubtedly aid the planning and deployment of services by operators.

Energy challenge – Yes, the telcos knew that Nigeria had a power problem when they paid for licenses in 2001. But who could have imagined that the issue will persist unresolved, for this long? Currently, the logistics of ensuring round-the-clock availability of power is a nightmare that keeps whole teams awake many a night. A straightforward solution is the establishment of energy parks to serve critical infrastructure. QED!

Local content – Some progress has been made here, especially through the National Office for Technology Acquisition and Promotion (NOTAP). To move forward the government and other corporations need to host local content locally. As a corollary, Nigeria must urgently adopt the doctrine of data sovereignty.

Multiple regulations – This is another problem that is almost as old as the industry itself. The NCC has done a lot of work here. Nigeria must explore a converged regulatory regime as the way out.

Capacity building – Human resources have always been an issue but the recent increase if the rate of migration has made it a mini-crisis. The Nigerian Universities Commission (NUC) and the NCC have their work cut out for them – bridge the gap between academia and industry via curriculum reform involving the industry and internships.

I’ll be the first to admit that these problems and solutions are not exhaustive. The NCC may want to consider calling a stakeholder forum to deliberate on the problems and proffer solutions. The white paper produced can now be the basis of engagement with the government and its relevant agencies.

For the government, the focus should not be only on sharing the existing telecom cake, but also on helping the industry bake a bigger cake.

Elvis Eromosele, a Corporate Communication professional and public affairs analyst lives in Lagos.

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