June 19, 2019

How viable tech ecosystem can facilitate Nigeria’s economic growth

How viable tech ecosystem can facilitate Nigeria’s economic growth

A typical tech hub

By Juliet Umeh

Despite the rave reviews  Nigeria gets as the fastest developing technological economy in the emerging markets of Middle East and Africa, MEA, the tech development in Nigeria is yet to mature.

A typical tech hub

Nigeria distressed under Buhari- Secondus(Opens in a new browser tab)

In the view of Chief Executive Officer, MainOne cable company, Funke Opeke, the reason is that the supporting structures to a strong tech economy is lacking in Nigeria, and until the right infrastructure are deployed, the flowery numbers and rave reviews which are mainly dependent on the population power of the country, will hardly make much difference.

Also the Director-General, Delta Innovation Hub, Mr.  Chris Uwaje, echoed Opeke’s view, hitting out at the promoters of smart city initiatives in a country he described as living the fallacy of a fourth industrial revolution.

Uwaje said that instead of promoting smart city initiatives, Nigerians should rather promote Smart Villages to equip the majority of youths living in the villages and restrain them on perpetual desires  to migrate to the urban cities.

Opeke and Uwaje were guest speakers  at an Innovation Forum held at the University of Lagos recently tagged: Emerging technologies research and ICT Innovation, organised by the Nigerian Communications Commission, NCC.

Why Nigerian tech ecosystem remains at infancy

According to Opeke, the supporting factors that play a crucial role in creating a robust tech ecosystem such as access to capital, market depth, infrastructure, work spaces, relevant skills set, are, unfortunately, lacking in Nigeria.

She said:  “We have fewer resources per person  to invest  and to buy. Start-ups  face difficulty of scaling and making decent returns  to  compete globally. More successful ones, such as Andela, Flutterwave, Tizeti among others, quickly go offshore

“Lack of infrastructure is a challenge such as electricity, transportation and broadband.

There are no government support incentives, grants, direct investments and safeguards for small players and new entrants.

“There are not enough incubators providing early-stage support to start-ups. Part of early teething problems start-ups face is  inadequate access to market for their products.

Besides these, there is also poor education, lack of skilled talents and until there is a sector-specific acceleration for all these, we will still remain an emerging tech economy,” she added.

For the past few decades, economic viability of many developed nations has been traced to their tech ecosystem. Tech ecosystem is an interconnected, interdependent network of various actors that combine to create innovative products and services in technology.

These include tech start-ups and entrepreneurs, global tech companies, hubs/accelerators, investment groups, universities and research institutes that provide disruption leading to innovations in the existing sectors.

Globally, these disruptions have produced great wealth, changed the narratives and continued to drive productivity while creating trillion dollar companies such as Apple, Amazon, Microsoft, Google, Facebook, and Alibaba among others.

However, despite significant growth in recent years, the tech ecosystem in Nigeria, is still at infancy.

A recent GSMA report stated that, since 2016, the number of active tech hubs across Africa has grown by over 50 per cent from 314 in 2016 to over 442 in 2018. It said that Nigeria alongside four African countries, are housing over 4,500 of these hubs with Nigeria on the top of the list with 55 of them, making her the largest in the African tech ecosystem.

The report, however, said that when compared to more established global tech ecosystems in USA, China, India and UK, Nigeria ecosystem is still considered underdeveloped.

Getting the ecosystem kick-started

However, experts have said that to experience exponential growth in the Nigerian economy, it is imperative that Nigeria’s Tech Ecosystem is developed through local content.

Opeke, said developing Nigeria’s tech ecosystem is not negotiable if Nigeria is to have a prosperous future. She said that Nigeria’s ability to participate in global value chains other than as consumers, will depend on the growth of local content.

She emphasized that unless Nigeria takes rapid action in developing her ecosystem, supporting the tech hubs, while poverty is declining in other nations, it will keep becoming poorer.

She, however, expressed pleasure that Nigeria has 55 out of 442 active hubs in Africa and the recent addition of Facebook NGHub, The Nest, and Eko Innovation hub but she said more needs to be done.

Opeke explained: “Innovation Hubs are integral in building vibrant, integrated tech ecosystems around the world. Innovation Hubs/Co-working spaces create a functional and motivating work environment where businesses of all kinds can work, learn from each other, make connections, develop new skills, and get inspired to reach the next level.

“Hubs help  start-up companies access the technology, incubate their potential to scale globally and create worldwide impact.

“Local incubators such as CcHub, Passion Incubator, Wennovation Hub, LeadPath Nigeria, Tony Elumelu Foundation and Ventures Platform, collaborate with international initiatives such as MEST, Village Capital, Impact Hub, Seedstars, YCombinator, Facebook and 500 Startups to support the growing network of entrepreneurs.

They help them implement technology-enabled solutions that solve some of the grand developmental issues that Nigeria and many other similar emerging economies face.”

How government can encourage ecosystem

Opeke said that Nigeria’s tech ecosystem is largely being driven by the private sector and the model for government support for these hubs has not mature.

She said: ”There have been a few attempts as government-owned hubs are springing up in several parts of the country, but honestly, they do not work because of the lack of continuity that we see in government.”

She advised that there must be incentives to have jobs here to avoid brain drain and also protect local companies.

“The president passed an Executive Order to say Government will preferentially source from Nigerian-owned companies, we have not seen that take effect.

“Also, enabling a conducive business environment for business zones and innovation hubs with a friendly tax regime,” she said, adding that there must be synergy with universities to encourage research and development and scale the environment for innovative ideas in the academic space.

In  his opinion, Uwaje who is also African Chairman, IEEE-World Forum on IoTs, believes fourth industrial revolution is still a fallacy . He said Nigeria needs to build platforms and data centers need to be transformed into real platforms so that they can do these interconnected skills.

He also decried several smart city projects, saying Nigeria cannot be talking about smart city when 72 per cent of its citizens are living in the villages.

Uwaje said: “YWe should be talking about smart rural so that we  can cut off ceaseless migrations to the urban cities.

In that case, it is more viable to promote smart villages. We need convergence of 50, 000 Nigerian youths in one place doing something and targeting the market of Africa, and you can only get that cluster in the villages.”

NCC’s contributions

However, NCC said it has started making special regulatory interventions to stabilise the country’s economy through technological innovations.

Executive Vice-Chairman of the commission, Prof. Umar Danbatta, said it is imperative that the right frameworks are developed to enhance the ability of indigenous companies  to maximally explore and exploit  local opportunities, and fulfill local demands.

He said the commission is visiting several technology innovation hubs in the six geo-political zones with the aim of assisting them with the right regulatory intervention to ease their operations.

He said the reason the  visitation  started with Lagos was because it has the largest concentration of tech hub ecosystem in Africa.

Corroborating Danbatta, Director, Research & Development at NCC, Mr. Ephraim Nwokonneya said the commission has done a lot to promote  research and development.

He said: “We started research efforts about three years ago. By the time we are done  with 11 research grants, we would have about 25 research issues going on in various universities. When you put that within the context of growth in the industry, there are quite a lot of opportunities for research and what we are trying to do is to encourage the academia to get involved in looking at how we can solve problems in the country. We are also looking at encouraging the private sector to also invest in research.

What NCC as a regulator is doing is to stimulate, encourage and facilitate research in the industry and these are unlocking potentials for growth.

Organization’s perspectives

On what telecom networks are doing to encourage local content, Mr. David Ogunsola, from Airtel network said they believe in industrial revolution.

Ogunsola said, “We are imputing our businesses with local partners, localizing each department with local software. We are also having internal trainings, retraining our staff to embrace technology and operate it. We are changing the equipments we use for our business.

“We are also expanding massively 4G in rural and urban Nigeria to get accessibility and give access to technology economy so that our people will also participate in the race for big data, artificial intelligence, machine learning, fintech, block chain and all that.

Another network, MTN, also said it has done a lot with universities to empower local resources.

Innovation Manager at MTN, Mr Orie Ononogbu said they are currently embarking on a challenge where post graduate researchers in the universities will pitch their research ideas so that they can pick best solutions that will address social issues.

He said they are also at alliances with innovation hubs, digital hubs across Nigeria.