Economy

$11trillion Global Digital Economy: Can Nigeria Play Catch-Up?

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Nigeria’s unimpressive position in the digital cum data driven economy, and the need for her repositioning in this area, came to the fore recently when the Chairman of the Senate Committee on Media and Public Affairs, Senator Ajibola Basiru, and his team paid a courtesy visit to the Director General of National Information Technology Development Agency ( NITDA), Mallam Kashifu Inuwa.

Worried about this development, NITDA’s DG, Inuwa disclosed that, as far as digital economy in the world is concerned, which is valued at $11trillion, Nigeria, despite its huge population and potentials, is lagging far behind. He also told the lawmakers that his agency is brainstorming regularly on ways they can help create a total turnaround.

From previous studies it is obvious that the global digital economy is developing rapidly. Different studies have put it as the single most important driver of innovation, competitiveness and growth. It holds huge potential for entrepreneurs, as well as small and medium-sized enterprises (SMEs).

New digital trends such as cloud computing, mobile web services, smart grids, and social media, are radically changing the business landscape; reshaping the nature of work, the boundaries of enterprises and the responsibilities of business leaders. These trends enable more than just technological innovation. They spur innovation in business models, business networking and the transfer of knowledge and access to international markets.

Ironically, despite its large, youthful, and entrepreneurial population, Nigeria’s digital economy is yet to be fully exploited given its potential to become an engine of economic transformation.

All over the world, awareness is on the rise about the usefulness of Information and Communication Technology (ICT) to promote and enhance growth and development. Economic managers in most countries have realized that competitive advantages in terms of trade, industry, manufacturing and services would be very difficult to sustain without adopting, deploying, integrating, and utilizing ICT in various sectors in this 21st century.

The developed nations; United State (US), United Kingdom(UK), Germany and Japan were able to attain present level of development through the deployment of high technology, especially in the industrial sectors. In addition, Brazil, China, Russia, India and the economy of other Asian Tigers are rising due the high adoption and integration of innovative technology.

Consequently, developing nations are beginning to realize that any development effort that is not technological-based is likely to fail.

African nations, have also recognized that local and global competitiveness depends largely how they deploy technology to transform different sectors of their economies, especially the industrial sector.

World Bank assessment shows that, Nigeria is capturing only a fraction of its digital economic potential and will need to make strategic investments to develop a dynamic, transformative digital economy.

The Nigeria Digital Economy Diagnostic says that with improvements in digital connectivity, digital skills, digital financial services and other core areas of digital development, Nigeria can fully unleash new economic opportunities, create jobs and transform people’s lives.

Isabel Neto, World Bank Senior Digital Development Specialist, in a report stated that, “as the biggest economy in Africa with one of the largest populations of young people in the world, Nigeria is well-positioned to develop a strong digital economy, which would have a transformational impact on the country.”

“Through innovations and investments, the Nigerian economy can harness digital data and new technologies, generate new content, link individuals with markets and government services, and roll out new, sustainable business models.”

In Nigeria, digital economy is a key priority. The country has made some strides to strengthen the country’s digital space. Nigeria’s Economic Recovery and Growth Plan 2017–2020 (ERGP) recognises the need for a digital-led strategy to make the Nigerian economy more competitive in the 21st century global economy.

Clearly, ICT infrastructure plays a key role in the socio-economic and technological development of a digital economy. There is lack of adequate ICT infrastructure (Computers, Internet and broadband) in Nigeria.

Although United Nation (UN) ranks Nigeria high in the Online Services Index (OSI) and e-government Development Index (EGDI), she does not feature among the top ten in Africa in digitalisation. In addition, Nigeria ranks 75th in Global connection index (GCI) in 2019. Most GCI indicators place Nigeria below the global average.

The country has fallen behind others in terms of broadband penetration. One of the ways to go is to improve digital infrastructure. This is because despite having the largest mobile market in Sub-Saharan Africa which is supported by strong broadband infrastructure and improved international connectivity, Nigeria has minimal fixed broadband infrastructure and connectivity in rural areas, leaving a significant number of the most marginalized segments of the population without internet access.

For Nigeria to maximize the full potentials of her digital economy, she must strengthen her digital platforms. The country needs strong public and private sector synergy to sustain her digital platforms and a thriving e-Commerce platform.

It is also important for the handlers of the nation’s digital economy to increase access to digital financial services. This is because findings revealed that about 60 million Nigerian adults are without access to a formal account, stalling the country’s journey toward financial inclusion. Whereas in other African markets financial inclusion would mostly be driven by digital financial service (DFS) providers. As for Nigeria, the huge potential of DFS still remains untapped.

For Nigeria to rev up her relevance, the country must close the digital skills knowledge gap. It is observed that those capabilities and skills required to use various forms of digital technologies remain limited to a small segment of the population.

It’s also worthy of note that increases in higher level education and the existence of accessible online training initiatives is bringing digital skills to those able to access them. What the country really needs to do now is to expand the scope and rejig the curriculum of schools comprehensively to make digital education more inclusive.

Meanwhile, Nigeria’s current digital economy policy, spearheaded by the Federal Ministry of Communications and Digital Economy (FMoCDE) is targeted at mobilising other sectors and aligning with the Economic Recovery and Growth Plan (ERGP) of the Federal Government, to achieve economic growth and diversification.

Read Also: 2021: How to Move the Economy Beyond Current COVID Challenges

It is encouraging that the digital economic policy of the Federal Government is pushing to make majority of the citizens undertake many activities electronically. The Digital economic policy is really in line with global trend in business transactions. It has the capacity to strengthen the economy and increase transparency, competitiveness and infuse the country’s integration framework into the global economy. It is commendable that current administration is putting measures and policies in place, both economic and Information Technology, to drive digital economy policy implementations.

It is important to note that the success of digital economy implementation in Nigeria depends largely on the availability of ICT infrastructure as well as their development, upgrading, deployment and utilisation. The current drive by Government for a digital economy is no doubt for economic development and increased global competitiveness.

However, while it appears that Federal Government is set for the implementation of this policy, many Nigerians are worried whether the country is truly ready, given the high level of digital infrastructure insufficiency.

Godwin Anyebe

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