New Telegraph

Report: Nigeria’s share of $180bn internet economy threatened

CONNECTIVITY

 

Access to faster and better quality Internet connectivity is expected to drive economic benefits for Africa’s economy

 

Despite having the largest number of internet users in the continent, Nigeria may lose out from the $180 billion projected internet contribution to Africa’s economy by 2025. This is according to a new report by Google and the International Finance Corporation (IFC) titled: ‘e-Conomy Africa 2020.’ The report estimates that Africa’s Internet economy has the potential to reach 5.2 per cent of the continent’s gross domestic product (GDP) by 2025, contributing nearly $180 billion to its economy.

 

The projected potential contribution, it added, could reach $712 billion by 2050. It, however, noted that Nigeria and some other countries would need to be consistent with their policy and amend existing regulatory framework to benefit from the internet economy.

 

“Kenya and South Africa appear to have the most comprehensive regulations in place, while Ghana, Mozambique, Nigeria, Rwanda and Seychelles require some major amendments to their frameworks,” the report states. Citing the recent okada ban in Lagos and its impact on ridehailing service, Google and IFC, in the report, noted that the action had sent wrong signals to international investors in the e-hailing space.

 

“In recent years, the ride-hailing industry has emerged across Africa with several start-ups concentrated in Lagos. Examples such as MAX.ng, Gokada and ORide were reported to employ over 14,000 employees in early 2020, providing income for lowskilled individuals.

 

“However, in February 2020, all commercial motorcycles (called okada) and tricycles (keke) were banned from major highways in the state, with government highlighting safety and security as reasons for imposing the ban. MAX. ng reported that before the okada ban, they had completed over two million trips since August 2015.

 

“This ban is an example of challenges that regulators face as a result of digital disruption and since the ban, there have been concerns that the steps leading up to the okada ban have sent negative signals to international investors,” the report states.

 

 

Meanwhile, the report highlights increased access to faster and better quality Internet connectivity, a rapidly expanding urban population, a growing tech talent pool, a vibrant startup ecosystem, and Africa’s commitment to creating the world’s largest single market under the African Continental Free Trade Area as factors that would drive the internet contribution.

 

“The digital economy can and should change the course of Africa’s history. This is an opportune moment to tap into the power of the continent’s tech startups for much-needed solutions to increase access to education, healthcare, and finance, and ensure a more resilient recovery, making Africa a world leader in digital innovation and beyond,” said Interim Managing Director, Executive Vice President and Chief Operating Officer at IFC, Stephanie von Friedeburg.

 

The report notes that digital startups in Africa are driving inno-vation in fast-growing sectors, including fintech, health tech, media and entertainment, ecommerce, e-mobility, and elogistics, contributing to Africa’s growing Internet gross domestic product (iGDP) — defined as the Internet’s contribution to the GDP.

 

“Google and IFC have created this report to highlight the role the digital startup sector is playing and other factors driving the continent’s growth, in order to showcase and support the opportunities the continent presents,” said Google Africa Director, Nitin Gajria. An analysis within the report conducted by Accenture, found that in 2020, the continent’s iGDP may contribute approximately $115 billion to Africa’s $2.554 trillion GDP (4.5 per cent of total GDP).

 

This is up from $99.7 billion (3.9 per cent of total GDP) in 2019, with the potential to grow as the continent’s economies develop. Investments in infrastructure, consumption of digital services, public and private investment, and new government policies and regulations will play an important role in supporting Africa’s digital growth. The report notes that investment in digital skills will also need to increase in order to help drive technology usage and continue to grow the continent’s talent pool.

Read Previous

‘Poor remuneration killing young lawyers’ aspiration’

Read Next

13 vessels offload N111.3bn raw sugar at Lagos Port

Leave a Reply

Your email address will not be published. Required fields are marked *