"INVESTING IN NIGERIA’S AUSPICIOUS DIGITAL ECONOMY" BEING A SPEECH PRESENTED BY ISA ALI IBRAHIM (PANTAMI), PhD, FNCS, FBCS, FIIM, HONOURABLE MINISTER OF COMMUNICATIONS, NIGERIA AT THE AFRICA INVESTMENT FORUM AT DUBAI WORLD TRADE CENTRE ON WEDNESDAY, 9TH OCTOBER 2019
All Protocols duly observed.
May Peace, Mercy and Blessings be upon you!
I am very delighted to welcome you all to this year’s Africa Investment Forum (AIF), where we have the opportunity to showcase the opportunities that abound both within the African and Nigerian ICT sectors. I will be placing particular emphasis on the budding Nigerian Digital Economy and the many prospects for investing in it.
I use this opportunity to acknowledge the support and cooperation of our strategic partners in this event- the Dubai World Trade Centre. Your collaboration over the years has provided an important platform for the Nigerian Government to attract investment into its ICT sector and we are grateful for this partnership.
Africa's population is growing at an average rate of 2.57%, which is almost 220% the average global growth rate of 1.17% per annum. The United Nations also estimates that half of global population growth that is projected to occur between now and 2050 is expected to occur in Africa. These statistics show that even though we already have a large market of about 1.2billion people in Africa, investors should expect an even larger market in the upcoming years.
We have an even bigger prospect when we also consider the fact that Africa has the youngest continent, which, according to the United Nations, comprises 60% of the population under the age of 25years. It is well known that younger people adapt easier to technology and we are confident that Africa is well positioned to play a key role in ICT-triggered innovation.
Nigeria’s geographic and financial position on the continent make it a very strategic country and good starting point for investors interested in the African continent. In terms of the nation’s geographic position, it is located just between the central and western parts of Africa and offers investors immediate access to over half of the African continent, represented by those that reside in Western and Central Africa as well as the approximately 200 million people living in Nigeria. With an average age of just over 18 years, Nigeria has a potential critical mass of ‘digital natives’ that can transform the country into a regional and global ICT power house.
With a Gross Domestic Product (GDP) valued at $397 Billion, Nigeria has the largest economy in Africa based on this World Bank estimate. Nigeria is 6th largest producer of oil and has the 10th largest oil reserves in the world and this sector has had a defining role on the economy of Nigeria. However, there is a committed effort by the administration of President Muhammadu Buhari, GCFR, to change this by diversifying the economy.
The ICT is a viable candidate for this diversification process and a recent report by the National Bureau of Statistics (NBS) shows that ICT is changing the narrative. The Q2 Report by NBS shows that the Non-Oil sector contributed 91.18% to the nation’s GDP while the oil sector contributed 8.82% to GDP in Q2 2019. The interesting part of the report is that the Information and Communications sector contributed 13.85% to total GDP in the second quarter of 2019, higher than rate of 11.22% recorded in the same quarter of 2018 and higher than the 10.60% it contributed in the preceding quarter.
I was appointed as the Honourable Minister of Communications on the 21st of August and one of the key mandates that the ministry focusses on the promotion of a Digital Economy for Nigeria. A digital economy refers to any economic activity that depends on ICTs, either fully or partially. According to a 2016 Report by Oxford Economy, the global digital economy is valued at $11.5 trillion dollars or approximately 16% of the Global Economy.
The global digital economy is also projected to account for a quarter of the global economy in the next 10years. Nigeria currently does not has a large slice of the global digital economy but we are ambitious enough to position ourselves to play a leading role in contributing to this economy. The increasing influence of ICT on our GDP gives us the impetus required to further develop the digital economy in Nigeria.
We have embarked on a few programmes to support the development of our digital economy. Some of these programmes include:
1. Increasing broadband penetration;
2. Digital Literacy;
3. Developmental Regulation;
4. E-governance;
5. Cybersecurity;
6. Local Content Development; and
7. Digital Job Creation;
A recent World Bank study shows that a 10% increase in the broadband penetration in developing countries translates into a 1.4% increase in the GDP of that country. The Broadband penetration in the country currently stands at about 33% and we are committed to increasing this value. There are currently 207 Clusters of ICT Access Gaps that include 33.2million that lack access. We have mapped out strategies to bridge this gap and invite investors to explore this opportunity.
The teeming digital natives in Nigeria can provide a ready pool of high quality and cost effective ICT talent and their level of expertise will cover all spheres of ICT endeavour. In order to make this dream a reality we are making arrangements to embark on a large scale intensive ICT digital literacy programme that will ensure that Nigerians from all works of life have the digital skills required to contribute to the digital economy. The programme is a deliberate effort to make Nigeria a regional hub of software engineers and a global outsourcing destination.
The Federal Ministry of Communications supervises the bodies that regulate the Telecommunications and Information Technology subsectors. Our regulatory approach is one that develops the ICT sector, rather than stifles it. We provide the broad policy that ensures that investors have a level playing ground so that as they invest in the ICT sector they can be guaranteed of an equitable return on investment.
We are currently implementing an E-government Masterplan to ensure that government services are seamlessly accessed online. This will strengthen our digital economy, make it easier for citizens to access government services and also make it easier for government to track performance. Investors can also access government services, such services include company registration, land management, eEducation and eHealth. We are also deploying technology to improve the efficiency of the postal system and enhance the ability of subscribers to track items posted.
Digitisation of services is not restricted to the public sector alone as we are also encouraging educational institutions and the private sector to digitise their service delivery and this is yielding results. For example, a 2018 Report by Insight Africa shows that Nigeria accounts for about 31% of the digital platforms deployed by the private sector in Sub-Saharan Africa. Investors in Nigeria can be sure of an environment that is amenable to digital change.
Much as the digital economy has its advantages, we realise that it is equally important to mitigate the negative effects that can result from nefarious activities online. To this end, we are strengthening our resolve to keep Nigerians and our investors safe online. One of our strategies is to ensure that there is a proper digital identity for all those that transact in the digital economy.
For example, within 36 days of my assumption of office, I ensured that every incident of improperly registered SIM cards (about 9.4 million of them) was addressed- either by properly registering those cards or by an outright blocking those that failed to comply. We went to this great extent to give Nigerians and our potential investors confidence in the sector. We are also embarking on a number of other measures to sanitise the Nigerian cyberspace in order to improve the reputation of Nigeria on cyberspace.
Nigerian entrepreneurs are highly innovative and the global investor community is taking note. This explains why there has been a progressive increase in the level of investment in Nigerian startups. As an example, the funding to Nigerian startups exceeded the $100 million barrier in 2016 and increased further to $117 million in 2018.
The fintech sector deserves special attention; there were 1.9 trillion transactions in 2018, valued at a whopping N92 trillion and this explains why United Nations Conference on Trade and Development called Nigeria Africa’s biggest B2C market and McKinsey projected that Nigeria's ecommerce market will be worth $75 billion by 2025.
We are committed to developing local capacity and creating digital jobs. Our approach includes the promotion of the emerging technologies among youth across the broad spectrum of these technologies. We have also invested in the development of embedded hardware platforms for the design and deployment of emerging technology solutions. Nigerians have a pedigree for innovation and diligence and we invite investors to take advantage of this opportunity.
Nigerians are very friendly people and our business environment is conducive. We have a number of incentives for investors in the development of our digital economy. The Information and Communications Sector currently enjoys a pioneer status from the Nigerian Investment Promotion Commission (NIPC). This includes software, e-Commerce and Outsourcing service, amongst others, enabling companies to have some tax incentives. There are also extra incentives for investors that pay extra attention to the development of local content.
Nigeria is well on the way to developing a vibrant digital economy that will be propelled by the youthful and innovative population, as well as the policies and programmes that will ensure that there is sustainability in the development of the digital economy. As such, this is truly an auspicious time to invest and we are convinced that it would bring rich dividends! I invite you all to take advantage of this mutually beneficial opportunity to invest. Thank you for your kind attention.
Dr Isa Ali Pantami
Wednesday, October 9, 2019
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