The Nigerian Government says the digital economy sector currently contributes over 18 per cent to the country’s Gross Domestic Product (GDP), and has become the fastest growing sector in the nation’s economy.
According to the Organisation for Economic Co-operation and Development (OECD), a digital economy is one which incorporates all economic activities reliant on or significantly enhanced using digital inputs.
Addressing global leaders in the Information and Communications Technology sector and policy makers at the on-going International Telecommunications Union Plenipotentiary Conference, ITU PP2 in Bucharest, Romania on Thursday, Nigeria’s Minister of Communications and Digital Economy Isa Pantami, said that the growth of the sector has been significantly steady.
“In the first quarter of 2020, the sector contributed more than 14 per cent to Nigeria’s GDP, while in the second quarter of 2021, it contributed 17.90 per cent,” he said.
He noted that digital economy was the only sector that grew by double digits at the peak of the Covid-19 pandemic in 2020 and has witnessed unprecedented growth since then. Nigeria established two virtual academies during the pandemic, dedicated to the empowerment of citizens with digital skills, and the various partnerships with global technology giants to train ten million citizens.
The Nigeria Startup Law aimed at providing an enabling environment for indigenous innovators, to provide solutions to existing national and global challenges is currently before the National Assembly and has reached an advanced stage.
As a result, Five of the seven unicorns in Africa originated from Nigeria, representing to over 70% of the entire unicorns in Africa and the country’s digital economy sector is valued at approximately $100 billion in terms of revenue flow.
Despite the accomplishments and prospects of the sector, experts say there is need for the government to provide attractive tax-based incentives to tech companies, especially start-ups and facilitate ease of doing business.
The bill which also seeks to ensure the sustainability of the business climate and give statutory force to Executive Order 001 of 2017 on the promotion of Transparency and Efficiency in the Business, passed its second reading at the House of Representatives on Thursday.
The Nigeria Digital Economy Diagnostic report said 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.
The report provides an assessment of the state of the country’s digital economy around the five pillars of the Digital Economy for Africa initiative (DE4A); digital infrastructure, digital platforms, digital financial services, digital entrepreneurship and digital skills, which are key foundational elements of a digital economy.
“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,” World Bank Senior Digital Development Specialist and co-author of the report Isabel Neto said.
Through innovations and investments, the Nigerian economy can harness digital data and new technologies that link individuals with markets and government services.