#TTOutlook17 | ‘Nigeria: A Tale of Technology Rising’ by iDEA Hub CEO

#TTOutlook17 | ‘Nigeria: A Tale of Technology Rising’ by iDEA Hub CEO

#TTOutlook17 | ‘Nigeria: A Tale of Technology Rising’ by iDEA Hub CEO

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In this Technology Times Outlook 2017 keynote, Helen Anatogu, CEO of iDEA Hub says that Nigeria is one of largest and most sophisticated startup ecosystems in Africa.


Much of Sub-Saharan Africa including Nigeria enjoyed years of rapid economic growth, giddy at the prospect of “Africa Rising” and the dawn of a new economic era. Africa is home to a third of the world’s natural resources, a tenth of the oil and two-thirds of its diamonds and much of this growth has been dependent on global demand for these natural resources.

So, fast forward to 2017 and we are starting to look at a different picture. Growth has slowed in some countries, stalled in some and retracted in others. African countries are in the eye of a perfect storm: a slowdown in China and lower demand for commodities, emergence of alternative sources of oil and lifting of sanctions leading to a glut in oil production which has proved disastrous for oil dependent economies like Nigeria, rising unemployment, years of under investment in education as well as corrupt and spendthrift Governments.

As Africa’s most populous country, and largest economy with a GDP which accounts for about 72% of sub-regional GDP, Nigeria is at the heart of the continent’s economic renaissance. Nigeria has exceeded 6.5 percent annual growth over the past decade, thanks mainly to exports of natural resources.

However, Nigeria still faces formidable challenges regarding poverty and literacy. An unreliable electricity supply has led most businesses to rely on alternative forms of power, and only four out of 100 people in rural areas have access to the national electric grid. However, as more investors are becoming aware of Nigeria’s potential, things appear to be changing with a vibrant private sector expected to drive significant improvements in the coming years.

As Africa’s most populous country, and largest economy with a GDP which accounts for about 72% of sub-regional GDP, Nigeria is at the heart of the continent’s economic renaissance. Nigeria has exceeded 6.5 percent annual growth over the past decade, thanks mainly to exports of natural resources.

Helen Anatogu, CEO of IDEA Hub at Technology Times Outlook 2017, #TTOutlook17, at The MUSON Centre in Lagos
Helen Anatogu, CEO of IDEA Hub seen at Technology Times Outlook 2017, #TTOutlook17, at The MUSON Centre in Lagos

Nigeria’s population is projected to grow from more than 186 million people in 2016 to 392 million in 2050, becoming the world’s fourth most populous country. Nigeria has a high youth population which it needs to harness to boost economic development, reduce widespread poverty, and channel large numbers of unemployed youth into productive activities and away from ongoing religious and ethnic violence.

Oil has been a dominant source of income and government revenues since the 1970s but because of lower oil prices government revenues have declined significantly while the economy has contracted. Nigeria recognizes the need to move away from over dependence on oil and consciously embrace technology entrepreneurship and innovation for sustainable economic growth and resilience.

Nigeria has largely ignored the potential impact of technology entrepreneurship and innovation on economic growth and has failed to consciously develop this area. Other countries have long understood the importance of innovation and entrepreneurship to drive economic growth. The United States for example, though rich in natural resources built its economy on a culture that is particularly receptive to innovation and risk taking as well as institutions and an economic incentive regime which supported entrepreneurship.

In Africa, the potential for innovative products and services is huge, largely because of the youthfulness of its population- over 20 million Africans are between the ages of 15 and 25. This demographic shift and access to mobile devices will create millions of new internet users in the coming decade with a corresponding demand for services across verticals.

Social media and social networking are proving to be a catalyst in driving internet access and impact, users are largely consumers of content (mainly video and music) but as they get more comfortable with the internet it is expected that a shift will occur to using the internet and devices as tools to build, deliver and enable services.

A study by to the Mckinsey Global Institute found that some 128 million households are projected to have significant discretionary income by 2020 which is expected to bring about a corresponding rise in demand for digital products and services.

At the end of 2015, 46% of the population in Africa subscribed to mobile services, equivalent to more than half a billion people. The region’s three dominant markets – Egypt, Nigeria and South Africa – together accounted for around a third of the region’s total subscriber base.

At the end of 2015, 46% of the population in Africa subscribed to mobile services, equivalent to more than half a billion people. The region’s three dominant markets – Egypt, Nigeria and South Africa – together accounted for around a third of the region’s total subscriber base.

Leonard Stanley Nnamdi Ekeh, Founder and Chairman of Zinox Technologies Limited (left); Yele Okeremi, CEO, PFS, Helen Anatogu, CEO, iDEA Hub and Wale Goodluck, Head of Sub-Saharan Africa, GSMA today at Technology Times Outlook 2017, #TTOutlook17, in Lagos

Leonard Stanley Nnamdi Ekeh, Founder and Chairman of Zinox Technologies Limited (left); Yele Okeremi, CEO, PFS, Helen Anatogu, CEO, iDEA Hub and Wale Goodluck, Head of Sub-Saharan Africa, GSMA today at Technology Times Outlook 2017, #TTOutlook17, in Lagos

Over the next five years, an additional 168 million people will be connected by mobile services across Africa, reaching 725 million unique subscribers by 2020 with Nigeria being a major contributor to that growth. Nigeria is a country undergoing rapid transformation with a population of over 180million people and over 90million internet users. Most Nigerians access the internet via mobile. Among urban residents, it is estimated that 99 percent have access to mobile phones and 50 percent go online. Social networking is the most popular online activity, followed by reading news and watching music or videos. Urban Nigerians are more than twice as likely as the average African Internet user to conduct transactions online.

In the last five years, a technology ecosystem has emerged with a corresponding rise in the number of technology startups and growing recognition from the international investment community that Nigeria is fast becoming a place where high growth startups with solutions and business models that can scale across the African continent and beyond can be found. These startups can be found both outside and within the growing number of hubs, incubators, accelerators and co-working spaces springing up across the country offering support to would be Tech entrepreneurs.

Lagos has emerged as the epicenter of Nigeria’s fledgling technology ecosystem. As the largest commercial city in sub-Saharan Africa and home to over 20 million people, it is a city which holds a lot of promise and opportunity for startups. With a growing middle class and a myriad of challenges begging for technological solutions it is no wonder that some of Africa’s biggest consumer tech businesses call it home.

In 2017 and beyond more and more solutions will be built or localized for the very large Nigerian market. Several trends are emerging and are expected to continue for the foreseeable future.

Nigerians have not embraced the sharing economy as quickly as consumers in other parts of the world because of a high level of distrust not only of technology but also fellow internet users and cultural barriers. With the economic downturn this is changing and presents an opportunity for local startups to build services which are suited to the needs of local users.

Lagos has emerged as the epicenter of Nigeria’s fledgling technology ecosystem. As the largest commercial city in sub-Saharan Africa and home to over 20 million people, it is a city which holds a lot of promise and opportunity for startups. With a growing middle class and a myriad of challenges begging for technological solutions it is no wonder that some of Africa’s biggest consumer tech businesses call it home.

Young Nigerians seen at work inside the Information Technology Developers Entrepreneurship Accelerator (iDEA) Hub in Yaba, Lagos
Young Nigerians seen at work inside the Information Technology Developers Entrepreneurship Accelerator (iDEA) Hub in Yaba, Lagos

Over 72 million Nigerians are unbanked. Consumers are increasingly reliant on mobile apps for basic banking operations. Technologies and innovations which make it more viable for banks to serve the underbanked populations and for financial services to reach the unbanked populations will be in high demand. The opportunities go beyond payments and transfers to credit-checking solutions, peer to peer payments and remittances and micro-finance.

Data from Nigeria Inter-Bank Settlement System (NIBSS) showed a significant rise in the use of Point of Sale (PoS) terminals for payments in 2016. Total transaction volume from January to November 2016 increased 65% against all of 2015. With the convergence between e-commerce and mobile technology Nigerians are embracing alternative payment methods and these numbers are expected to rise significantly in 2017.

Paystack, a payments-focused start-up, recently closed a $1.3 million seed investment round led by Chinese investment holding giant Tencent, Comcast Ventures, the venture arm of the US largest cable company, and Singularity Investments. In addition to this, there will be increased convergence between fintech and other sectors such as heathcare, education , agriculture e.t.c.

Another area of opportunity is healthcare. Nigeria has less than 50,000 doctors for the entire population as opposed to the over 240, 000 recommended by the WHO. Fifty percent of the 950 mobile health services tracked by the GSMA have been launched in Africa. The prospects for mobile health are bright health services leveraging voice and sms are becoming ubiquitous and we will begin to see more advanced applications providing access to medical and diagnostic services.

Smart phone prices will continue to fall enabling greater access to these devices and the rise in the use of free messaging apps by Nigerian subscribers. Telecommunication operators are going to be forced to come up with innovative data pricing and other strategies to drive data consumption and still remain profitable. Some of these strategies may include complimentary access to regular used content (and we are already seeing some of that happening with Facebook), creation of local content either in-house or in conjunction with local technology startups. As consumers become more sophisticated, we will see an increase in the use of mobile devices not only for entertainment and messaging but also health, education, transportation and food. Companies that can offer apps that can work optimally on low-speed mobile broadband connection will be winners in this space.

Another area of opportunity is healthcare. Nigeria has less than 50,000 doctors for the entire population as opposed to the over 240, 000 recommended by the WHO. Fifty percent of the 950 mobile health services tracked by the GSMA have been launched in Africa. The prospects for mobile health are bright health services leveraging voice and sms are becoming ubiquitous and we will begin to see more advanced applications providing access to medical and diagnostic services.

Technology Times file photo shows Mrs. Helen Anatogu, Chief Executive Officer of iDEA Hub, seen on the extreme left with her team at the iDEA Hub in Lagos

Lastly, the opportunity in big data. With the growing number of Nigerians with smart phones huge amounts of data are being generated. Companies who can analyse, make sense of and build solutions utilizing this data are set to reap rich rewards.

Nigeria is one of largest and most sophisticated startup ecosystems in Africa. Despite the challenges of poor infrastructure, the digital economy in Nigeria continues to thrive mainly attributable to: the huge youth population that is creating and demanding online content, emergence of e-commerce platforms that facilitate the procurement of services, demand for data services over voice service due to the increasing lifestyle effect of global social media platforms like

Facebook, Twitter, WhatsApp, Instagram, Snapchat, etc., the Cashless policy by the Central Bank of Nigeria (CBN) as well as promotion of financial inclusion strategy by CBN and Bankers Committee, especially licensing of mobile money operators.

Research done by Disrupt Africa puts the amount of investment flowing into African startups in 2016 at $129 million, with South African, Nigerian and Kenyan startups leading the way. On the back of an “Africa rising” narrative, local startups have matured beyond the “me too” business models which simply tried to replicate Silicon Valley companies. Now, many strive to solve some of the continent’s real world challenges in sectors from fintech to e-learning to health support.

With the increased investments into startups in sub-Saharan Africa there is potential for high growth especially for those addressing the myriad challenges of infrastructure, healthcare, financial and other essential services much needed in the African continent with potential for replication and scaling to other parts of the world.

Manager Manager @ Technology Times Online

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