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ICTEL expo: How Nigeria can mine opportunities in digital economy

To meet the bold objective of creating 100 million jobs, Nigeria needs to increase investment in infrastructure, create an enabling regulatory environment for the digital economy to grow… pursue radical reforms that bring about improved skills and a more competitive digital job market, support public-private partnerships… and improve the current business climate to boost more investment opportunities.

AT a time the largely oil-dependent Nigerian economy is experiencing a dreadful downturn, the recent Information Communications Technology and Telecommunication Conference and Expo, ICTEL 2020, held September 22 and 23, 2020, spotlighted digital opportunities available to be explored.

Digital revolution is changing lives and societies, globally, in an unprecedented speed and scale, delivering immense opportunities as well as inherent challenges.

According to World Economic Forum forecast, over 60% of global Gross Domestic Product (GDP) will be digitised by 2022, as digital platforms will be used to create close to 70% of new value over the next decade.

Indeed, as the Lagos Chamber of Commerce and Industry (LCCI) President, Toki Mabogunje said at the opening ceremony of the programme, there is no better time to explore the opportunities provided by the digital economy than now when every nation is seeking ways to overcome the restrictions imposed by the Covid-19 pandemic.

As nations face dwindling growth, deployment of technology is key to economic recovery and sustainability, since virtually all sectors leverage ICT for optimal performance.

“This is evident in the financial services sector, where almost all banking transactions are conducted through digital channels; the agricultural sector, where sophisticated technologies such as robots, temperature and moisture sensors, aerial images, and Global Position System (GPS) technology are largely deployed; the consumer goods sector where online stores and e-commerce have brought an incredible transformation to retail business; the medical sciences where ICT applications are now being widely used for telemedicine, more precise diagnostics, administrative efficiency and medical research,” she said.

Without a doubt, ICT has become the backbone of business, government, and personal lives. This automation has made businesses to be more profitable, efficient, safer, and more environmentally friendly.

THE 2020 virtual edition of the Virtual ICTEL EXPO organised by the LCCI, could not have come at a better time.

With a falling and failing economy, largely anchored on analogue processes, protocols and procedures, managers of Nigeria’s economy must have learnt a thing or two from the LCCI-powered ICT Expo.

Unlike the past five editions, this year’s event was a virtual one given the restrictions on in-person events in the face of the ravaging COVID-19 pandemic.

The theme for the edition, Exploring opportunities in the digital economy: The new reality, provided the platform for government, public and private sectors to acquire the tools required to take Nigeria’s economy to its desired level.

Over the past two decades, Nigeria has witnessed a phenomenal growth in its ICT sector, which has remained one of the most resilient areas of the Nigerian economy even in the face of the Covid-19 Pandemic.

Yet, there are still enormous potentials untapped and ICTEL Expo turned out to be one of the major platforms that offer opportunities to unlock those resources.

Connecting economic and commercial chords could provide the magic wand that would release the full force of Nigeria’s multi trillion-dollar economy to find expression across sectors, regions, religions and diverse layers of day to day transactions, from the streets to the commanding heights of the economy.

Stated Mabogunje, “As the foremost private sector body in Nigeria (since 1888), the Lagos Chamber is providing, through this Expo, a credible platform to advance the opportunities and linkages in the World of ICT. We are committed to the building of economic and commercial ties across all subsectors and players in the ICT sector.”

She continued, “We plan to continuously broaden the horizon and scope of the EXPO over the coming years. We see great investment opportunities coming from closer interactions and business integration among ICT players and their customers.”

As the driver of the digital economy, government’s role cannot be overemphasised, particularly where it concerns creation and execution of policies, whether they are ICT or non-ICT-based, including sustenance of infrastructure.

Actualising the dream of a Digital Nigeria has been the aspiration of the Muhammadu Buhari administration, according to
Communications and Digital Technology Minister Dr. Isa Alli Pantami, who was a special guest at the event.

Under Pantami’s watch, the redesigned Communications and Digital Economy ministry came up with National Digital Economy Policy and Strategy (NDEPS) (2020-2030), which was unveiled by President Buhari on the November 28, 2019, and the Nigerian National Broadband Plan (NNBP), 2020-2025 on March 19, 2020.

Based on an 8-pillar platform, the NDEPS document focuses on Developmental Regulation, Digital Literacy and Skills, Solid Infrastructure, Service Infrastructure, Digital Services Development and Promotion, Soft Infrastructure, Digital Society and Emerging Technologies; and Indigenous Content Promotion and Adoption.

Pantami said, “The NNBP is designed to deliver data download speeds across Nigeria of a minimum 25Mbps in urban areas, and 10Mbps in rural areas, with effective coverage available to at least 90% of the population by 2025 at a price not more than N390 per 1GB of data (2% of median income or 1% of minimum wage).

In order to achieve these ambitious targets, the plan focused on recommendations in four critical pillars, namely:
Infrastructure, Policy/Spectrum, Demand Drivers and Funding/Incentives.”
According to the Communications minister, NDEPS and the NNBP also provide opportunities for the private sector to participate in the development of the digital economy.

Connectivity, a device and a platform that enables one to connect with parties at the other end, were identified by CEO/Managing Director, MainOne and Chairperson, Presidential Committee on National Broadband Plan, Ms. Funke Opeke, in her keynote address, as the three activities that will enable digital economy to thrive in a Nigerian economy.

Looking at private sector’s participation in Nigeria and the challenges the nation faces as an economy, especially, with the recession, with the declining growth rate and high inflation economy that has held the country down, Opeke believes in the recognition, globally, that growth across the world can only be fueled by digital adoption in the years to come.

“I think it is important that our government gives more support to the ICT industry,” she said.

For Pantami, digital economy is creating opportunities in the emerging world, as innovations, resulting from digital technologies, are impacting virtually every sector; from retail, transport and logistics, financial services, manufacturing, education, healthcare to broadcasting.

“The new reality is that digital transformation of our economy has become imperative for sustainable national development. Now is the time to quicken the alignment of our digital transformation agenda with our economic needs. Globally, businesses are shifting from brick and mortar form to innovative enterprises driven by digital technologies,” Pantami said.

The minister is certain that this is the time for businesses, enterprises and organisations, whether public or private, to reinvent and automate to fit into the global digital economy.

“This new reality and lessons learnt from the ‘new normal’ arising from the COVID-19 pandemic makes it mandatory for Nigeria, like other developing countries, to rise up to the challenge, innovate and occupy her place in the global digital economy,” he said.

Global digital economy leaving developing countries behind

IN the Foreword of its 2019 report, the United Nations Conference on Trade and Development (UNTAD), stated that the rapid spread of digital technologies is transforming many economic and social activities. However, widening digital divides threatens to leave developing countries, and especially least developed countries, even further behind. A smart embrace of new technologies, enhanced partnerships and greater intellectual leadership are needed to redefine digital development strategies and the future contours of globalisation.

Depending on the definition, estimates of the size of the digital economy range from 4.5 to 15.5 per cent of world GDP.

Regarding value added in the information and communications technology (ICT) sector, the United States and China together account for almost 40 per cent of the world total. As a share of GDP, however, the sector is the largest in Taiwan Province of China, Ireland and Malaysia. Global employment in the ICT sector increased from 34 million in 2010 to 39 million in 2015, with computer services accounting for the largest share (38 per cent). The share of the ICT sector in total employment rose over the same period, from 1.8 per cent to 2 per cent.

Within the ICT sector, computer services are the largest component, with a 40 percent share of total value added. The global computer services industry is dominated by the United States; its share of that industry’s value added is almost as big as that of the combined total of the next nine largest economies. India has the largest share among developing countries in this context. Computer services, which is the only subsector that is growing across all regions, is one of the main drivers of employment in the sector. Value added in ICT manufacturing is highly concentrated in East Asia (led by China), and the scope for more developing countries to extract value from this sector is likely to be limited.

In the past decade, global exports of ICT services and services that can be delivered digitally grew considerably faster than overall services exports, reflecting the increasing digitalisation of the world economy. In 2018, digitally deliverable service exports amounted to $2.9 trillion, or 50 per cent of global services exports. In LDCs, such services accounted for an estimated 16 per cent of total services exports, and they more than tripled from 2005 to 2018.

The growing power of digital platforms has global implications as Digital platforms are increasingly important in the world economy. The combined value of the platform companies with a market capitalisation of more than $100 million was estimated at more than $7 trillion in 2017 – 67 per cent higher than in 2015.

Some global digital platforms have achieved very strong market positions in certain areas. For example, Google has some 90 percent of the market for Internet searches. Facebook accounts for two thirds of the global social media market, and is the top social media platform in more than 90 per cent of the world’s economies. Amazon boasts an almost 40 per cent share of the world’s online retail activity, and its Amazon Web Services accounts for a similar share of the global cloud infrastructure services market. In China, WeChat (owned by Tencent) has more than one billion active users and, together with Alipay (Alibaba), its payment solution has captured virtually the entire Chinese market for mobile payments.

Meanwhile, Alibaba has been estimated to have close to 60 per cent of the Chinese e-commerce market.

For Nigeria to tap its full potentials

ACCORDING to World Bank, Nigeria is uniquely positioned to reap the benefits of the digital economy. Nigeria accounts for 47 percent of West Africa’s population, and half of the country’s 200 million people are under the age of 30. Nigeria has the largest mobile market in Sub-Saharan Africa, supported by strong mobile broadband infrastructure and improved international connectivity; yet minimal fixed broadband infrastructure and connectivity in rural areas is leaving a significant number of the most marginalised segments of the population without Internet access.

However, in its Digital Economy for Africa (DE4A) Diagnostic Report, World Bank highlighted the challenges and opportunities of the digital economy for Nigeria. The report argues that accelerating access to digital technologies spurs innovation, efficiency, and productivity, and as a result brings about choice and opportunities for greater growth and inclusion.

The report shows that many Nigerian citizens and businesses remain excluded from the digital ecosystem as a result of limited access to broadband and nonavailability of adequate devices (mobile devices and computers) to fully utilise the Internet. It also highlights good progress in digital infrastructure, finance, skills, and entrepreneurship, among others.

Nigeria’s international connectivity (‘First mile”) is well developed with connectivity to high-speed Internet via five undersea international links. Similarly, Nigeria is home to several high-growth digital companies that provide hopeful examples of the country’s digital potential. Lagos is a mature and active ecosystem with dynamic incubators, venture capital companies, digital start-ups, and private services via digital platforms. And the potential of digital financial services remains untapped despite the large share of unbanked population.

To deliver on the 2030 aspirations of greater access to the digital economy and meet the bold objective of creating 100 million jobs in Nigeria, the global apex bank stated that the country needs to increase investment in infrastructure, create an enabling regulatory environment for the digital economy to grow (e.g., regulatory enablers of DFS), pursue radical reforms that bring about improved skills and a more competitive digital job market, support public-private partnerships to stimulate and sustain demand for the use of digital platforms, and improve the current business climate to boost more investment opportunities.

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