An Impetus For Long-Term Socio-Economic Development

Technology and Taxes

An Impetus For Long-Term Socio-Economic Development

In Nigeria, the ICT sector functions as a catalyst for growth, creating job opportunities and stimulating the economy.

Nigeria’s ICT sector functions as a major contributor to the economy, supported by the country’s young demographic and the rapid acceptance of mobile internet services. The telecoms industry is holding a steadfast growth trajectory, as smartphone penetration and mobile internet network investment are increasing and support an economical shift towards data-driven growth models. In the IT sector, government efforts to boost broadband penetration have begun to gather steam, and all signs point to ICT creating an auspicious avenue for all sectors to rapidly grow.

Internet usage statistics are indications of Nigeria’s readiness to transform into a digital economy through ICT-driven systems and processes. Nigeria’s impressive internet access demonstrates its dedication to strengthening the quality of education, improving livelihoods and reducing poverty. The internet also drives employment and trade opportunities both within the region and across the globe, serving as an engine of access to information and empowering Nigerians toward a technological future. ICT has brought about equal footing, financial inclusion and competition in the delivery of services in the business environment.

Nigeria recognises the importance of ICT as an impetus for long-term socio-economic development for its people and as the enabler for developing other critical sectors. This recognition is reflected in the national development plan, Nigeria’s Vision 2020. In its drive to diversify the economy from dependence on the oil and gas sectors, the federal government has prioritised additional foreign direct investment in the ICT sector, bringing in as much as an additional US$15 billion. Overall investment in the ICT sector has hit US$70 billion, increasing from a mere US$50 million in 2001. The plan will accelerate the sector’s contribution to the nation’s overall GDP, where investment in telecom alone currently brings US$ 32 billion.

The governmental support and developmental plan will inevitably create countless opportunities for the country to become a technological hub for training, skills transfer, leadership and investment. Hon. Adebayo Shittu, former Minister of Information and Communications, says, “We will offer every support to ensure that our local ICT firms, service providers and manufacturers have a qualitative competitive advantage over others. If we do so, Nigeria’s ICT sector will attract international investors.” Additionally, the government

“We will offer every support to ensure that our local ICT firms, service providers and manufacturers have a qualitative competitive advantage over others.” Hon. Adebayo Shittu, former Minister of Information and Communications

is encouraging partnerships between local ICT companies and multinational/foreign investors. To promote these partnerships and grow an entrepreneurial eco-system in the tech sector, the administration has supported creating a series of government or private sector-led incubator hubs, youth innovation programmes and science-technology parks.

One such example is Abuja Technology Village Science and Technology Park is a destination for research, incubation, development and commercialisation of ICT. Such hubs enable duty-free shipments and elimination of labour issues as an incentive to investors and entrepreneurs. Prominent private sector partnerships are collaborations with local accelerators like the Co-Creation Hub (CC-Hub) in Yaba, Lagos. Initiatives such as these have attracted foreign investors like the Silicon Valley-based Y Combinator who established an incubation centre in Lagos to recruit and train talented Nigerians to code. In mid-2016, Facebook invested US$24 million in Andela through its Chan Zuckerberg Initiative. This act was followed by the visit of Mark Zuckerberg, who also toured the CC-Hub during his African business tour. Due to the variety of support, tech start-ups are slowly beginning to carve a niche for themselves and deliver impressive products and services. The progress made in a relatively short period of time is well-deserving of optimism. With more people interested in technology and its real-life applications, Nigeria stands a credible chance of becoming an ICT world leader.

The continuous support of Nigeria’s bright entrepreneurs is set to continue, especially with the success in establishing “Yabacon Valley” in Yaba. The suburb has won its affectionate nickname due to its large number of tech firms and startups that have been established in recent years. Nigeria attracts more startup funding than anywhere else in Africa. The Nigerian government is facilitating these startups by liberalising key ICT sub-sectors such as broadband, managed services, software, IoT and even blockchain, to create more competition and attract FDI.

Nigeria boasts an extremely entrepreneurial, techsavvy and young population. The future of the nation lies in recognising the incredible potential of Nigeria’s young people and understanding that technology is one of the cornerstones of any thriving economy. The country’s efforts and training will be the dawn of a new wave of technological achievement for Nigeria and it begins with these young, brilliant minds.

In ICT, the potential for job creation is vast. ICT alone can employ over 40 million Nigerians and contribute billions to the Nigerian economy. The telecom industry itself employs over one million Nigerians in their value chain. The telecom industry has accelerated socio-economic growth in Nigeria, adding that all sectors, including education, banking/financial services, agriculture, entertainment and health, are leveraged on communication and overhead infrastructure. This will help Nigeria in job creation and in gaining a significant competitive advantage in the rapidly changing global economy. By deploying full utilisation of ICT infrastructure on all fronts--education, health, oil and gas, agriculture and more--the country can use ICT to penetrate all sectors and inspire job creation.

ICT is, without doubt, a key catalyst which can be strategically deployed to drive productivity and efficiency in all sectors of the economy. ICT has impacted healthcare, agriculture, services and tourism and continues to create opportunities for diverse forms of investment through the digital market, improved productivity and quality and the revolution of the Nigerian banking and financial sector. Currently, almost all sectors of the Nigerian economy leverage on ICT to increase efficiency, productivity and performance which enables ICT to contribute over 10% of the nation’s GDP. Through foreign direct investment and continued support of this promising technology, Nigeria is set to be the main ICT hub in Africa.