FG Lists Constraints To Economic Digitalisation

To unleash Nigeria’s potential for industrialisation and sustainable economic growth, while ensuring competitiveness in a global digital economy, the Federal Government says it will take measures to digitise the economy and make digitalisation a key driver of national economic development strategies.
In a document released towards this end, the government said it will ensure that, by 2025 critical digitisation challenges are addressed so that the sector can achieve its job creation and economic productivity potential.
Consequently, the Federal Government, in its National Development Plan (NDP) 2021 to 2025, Volume 1, has projected about N150 billion investments.
The N150 billion, which according to the Federal Government, is public investment, will be spread across priority projects in the sector as well as projects essential to the operations of the relevant ministries.
In addition, the government said the ICT sector is projected to facilitate the formation of up to $1 billion in private equity and private capital investments in digital infrastructure of approximately $40 billion.
The document noted that despite recent improvements in Nigeria’s ICT sector, several challenges, including low funding and weak digital infrastructure, especially in noncommercial hubs, have limited the value-creation potential of businesses.
These constraints include digital and financial exclusion of key segments of the population; intermittent access to power, which threatens the development of the ICT sectors, particularly to the telecoms and IT services and last-mile connectivity; lack of local funding for promising start-ups (over-reliance on foreign funders who may not necessarily fund start-ups based on local needs); and low capacity of digital infrastructure and institutions, especially in non-commercial hubs.
Others are low skills development due to skills mismatch between academia and industry, leading to a shortage of workers with digital skills; new risks associated with data privacy and cybersecurity challenges.
The Federal Government said these constraints must be addressed to reduce the risk of low regional and global competitiveness, low economic productivity, business exits, and brain drain.
“Thus, to create high-growth businesses, including unicorns, and maximize job creation opportunities, the digital economy building blocks are of strategic importance and priority,” the document stated.
While challenges exist, FG said Nigeria has a significant young, tech-savvy, resilient, and entrepreneurial population, which creates opportunities for the ICT sector.
The FG, which puts Nigeria’s population at approximately 200 million, said a privately held start-up with a valuation exceeding $1 billion, noted that the population makes Nigeria an attractive destination of choice for ICT services and products, and the installation of under-sea cables has boosted bandwidth capacity in the last decade and provided a framework for digitisation across the country.
According to the document, these trends have led to an influx of world-leading multinationals establishing operations in Nigeria as well as international equity investments into start-ups operating in these sectors.