Nigeria’s Digital Economy is subject to five fundamental pillars —World Bank - VENTURES AFRICA
The World Bank Group launched its first Nigeria Digital Economy Diagnostic Report on Thursday, November 28, 2019, during an eSummit hosted by the Nigerian government.
The report gives a breakdown of Nigeria’s current digital state, unfolds the strength of its digital economy which is pioneered by both private and public stakeholders. And also prefers solutions on how to increase the productivity of the digital sphere in order to raise the nation’s GDP.
In 2016, the global digital economy was worth about $11.5 trillion which is equivalent to 15.5 percent of the world’s overall GDP. The digital economy is expected to reach 25 percent in less than a decade, quickly outpacing the growth of the overall economy.
According to the diagnostic report, Nigeria has a population of approximately 197 million people and accounts for 47 percent of West Africa’s population. With improved digital connectivity combined with digital skills and literacy, Nigeria will be able to harness its digital economy and partake in the 25 percent GDP increase in a few years time.
Shubham Chaudhuri, The World Bank Country Director for Nigeria, said that the country needs to focus on “accelerating improvements in five fundamental pillars of the digital economy; digital infrastructure, platforms, financial services, entrepreneurship and skills.”
Subsequently, these five pillars of the digital economy have to be properly structured so as to make the country digitally-enabled before 2030.
Nigeria’s 2017 ranking at 143rd of 176 countries in the ICT Development Index (IDI) underlines its limited broadband subscriptions. Proper Digital Infrastructure is the key to driving a good digital economy, without which it cannot thrive.
Fast internet provides a platform for innovation, helps entrepreneurs create new applications and allows the public sector to deliver more effective and inclusive services to its citizens. It, therefore, means that broadband has the potential to transform Nigeria’s economy provided that all sectors put in place effective policies that encourage its use as an essential input for growth.
Digital platforms include multi-sided marketplaces with business models that enable producers and users to create value together through interaction, They make use of mobile devices, computers, and the Internet.
Governments operate digital platforms to offer citizen-facing government services and share information. Commercial firms also operate digital platforms to offer a growing array of products and services.
With Lagos as the only city in Africa that figures in the 2019 Global Start-up Ecosystem Report as a start-up ecosystem, the Nigerian government should encourage digital platforms in the country by providing special support to Lagos as it emerges the leading ICT hub in Africa.
Digital financial services (DFS) enables individuals and businesses to conduct transactions electronically or online through a range of digital financial services. It is however critical for the participation of individuals and businesses in the digital economy.
However, Nigeria is currently capturing just a small fraction of its DFS potential but with advancing digital literacy in the economy for both youth and adults, the DFS sector in Nigeria will flourish.
Digital Entrepreneurship involves creating an ecosystem whereby the digital economy is brought to life with new, growth-oriented ventures which contribute to net employment growth and enhances productivity in the economy.
In order to foster the digital entrepreneurship group in Nigeria, there should be a collaboration between ecosystem players, including digital entrepreneurs, innovation hubs, investors, and the government to develop a Monitoring and Evaluation framework (M&E) for innovation hubs.
Digital Skills which constitute technology skills is required for a digitally savvy workforce to compete globally. As firms’ employment needs continue to change rapidly, the labour supply needs to adjust itself to meet the demands.
The government should, therefore, ensure that its citizens with the appropriate digital skills so as to compete in an ever-growing digital and globalized world.
The diagnostic report highlights the need for strategic investment and interventions for Nigeria to kickstart its digital transformation. The West African country should key into the recommendations outlined in the report to take full advantage of the opportunities bound in its digital economy.
By Treasure Nnabugwu.