Nigeria is currently going through a technology revolution that will completely transform the way Nigerians live, create and work. This revolution remains one of the major highlights of the 21st century and will continue to make headlines for years to come. This revolution is currently changing the way work is done and it is especially being built to influence the service delivery industry. However, Nigeria’s advancement is yet to catch up with some other parts of the world
While other technologically advanced countries are building robots and electric cars, Nigeria is still in the early stage of its technological advancement. For now, Nigerian tech entrepreneurs are focused on building products, solutions, and services for organizations to amplify their service delivery models. Experts say that the potential for technological advancements across Africa is high and more so in Nigeria.
Notable examples of these innovation hubs are places like Co-Creation Hub (CC-Hub), Stonebrick Hub, Enspire Hub and so on. Recently, CC-Hub just launched a new hub in Rwanda and there more hubs like this across Africa, especially in Ghana and Kenya.
Social Media Week Report
Social Media Week reports that despite substantial growth in internet usage in Africa since the 2000s, only about 7-10 percent of the population have access to the internet. Over time this lack has caused a big divide in knowledge and the ability of developing countries to compete in the global market. This divide is not just limited to internet usage, it also extends to radios, television, mobile phones, computers. These have been very important factors for the social and technological development of Nigeria.
A particular report noted that Africa is at the start of a technological renaissance. The report said seven out of the 10 of the world’s fastest-growing internet populations are in Africa. This trend is expected to re-shape the entire economies as new companies would leapfrog established technology, ideas, and infrastructure.
It also stated that internet penetration in the continent is just 29 percent which implied that the majority of growth and network effects are still to come.
According to Forbes report, technology start-ups in Africa raised $129 million in funding in 2016, which found a 16.8 percent increase in the number of successfully funded start-ups over 2015.
It also stated that the number of startups that have raised funds increased by 17 percent from 125 to 146. This demonstrated the increasing interest in African technology startups in a variety of sectors, while it is refreshing that a greater percentage of those startups came from outside the big five (South Africa, Kenya, Nigeria, Egypt, and Ghana).
Growth Areas and Challenges
In Nigeria, the rise of technology startups began between 2005 – 2010. These early startups faced major business challenges because it was hard to raise funds. The growth of technology startups in Nigeria can be linked to what has been described as the current fourth industrial revolution period. Given the critical nature of the times we live in, it makes sense that people learn how to use their skills and knowledge to create and innovate.
Notable Nigerian Startups Making Waves
- ThriveAgric: Techstartup for Agriculture pairing investors to farm profit.
- Riby: Helping people save consistently, borrow easily, and invest together.
- PiggyVest: Helps you achieve financial freedom by enabling you save responsibly and invest on the go.
- Pazesha: A Digital Crowdlending Infrastructure for Financial Inclusion of the Underserved MSMEs in Africa.
- Paystack: Paystack helps businesses in Africa get paid by anyone, anywhere in the world.
- FourthCanvas: Design and Brand Identity company
- PayStack: Paystack helps businesses in Africa get paid by anyone, anywhere in the world.
- OneFi: Democratizing access to finance by leveraging data and technology. Our lending process is fully online via the Carbon Mobile App.
- OkadaBooks: Through the support of the community and our partners, we are organizing outreach programs to foster and spread literacy.
- Kudi.com: With Kudi, you can become an agent and provide financial services around you anytime.
- Helium Health: Empowering Africa’s healthcare ecosystem – from outpatient clinics to general hospitals and government agencies.
- FarmAgric: Empowering farmers by ensuring they have access to funds enabling them to expand their farm operations, increase their revenue, and provide jobs for youths.
- FlutterWave: Accept payments, make payouts and manage your business funds from one integrated platform that helps you connect globally.
- Gidimo: Africa’s most advanced curriculum mastery & personal advancement platform.
There’s so many more I can’t list here.
Where we are today?
Technology solutions are solving a lot of needs in almost every industry in Nigeria today; health, banking, finance, agriculture, mining, education and so on.
Despite the creativity inherent in the software solutions of these startups, angel investors have realized that some of them don’t have the business acumen required to drive their solutions, what they have is the technical know-how, but they require a mentor that will bring them up to global standards.
If you have a product is that of a global standard, investors are ready to invest in order to get returns. In terms of startups, the future is bright for Nigeria and we are beginning to see the benefits. This has led many telecommunications companies like MTN and Glo Mobile to fund and mentor startups to develop their own products. They also assist to pitch with other startups in competitions.
The Role of the Government
Strong economies are driven by technologies and these technologies are driven by startups, who have solutions that can support the economy and businesses. The government is aware that there is a need to fund startups but they are shying away from it. The government is supposed to create a level playing ground in terms of infrastructure, especially bandwidth.
Startups need bandwidth to drive their innovations. Internet and broad penetrations are still very low in the country. The government should come with the enabling infrastructure to ensure that these bandwidths are accessible to startups at a reduced price because at the moment it is very expensive in the country and they find it difficult to invest in bandwidth. They are doing it based on their own personal resources, but there is a huge gap in terms of government attitude towards it.
Verdicts from Startup CEOs
The Chief Executive Officer of Delivery Science and Fieldinsights Lanre Oyedotun, hinged his argument on the premise that the technology ecosystem is growing at a rapid rate because of the increasing influx of young vibrant entrepreneurs.
He posited that the rapid growth rate in the ecosystem has helped to increase the acceptance of technology in the country and made startups to become an acceptable enterprise.
I think there is more of an enabling infrastructure that has come to place in the past five years. A center such as CCHub, Yaba which was setup in May 2011 has bought together technology startups. Today, the center is now a place for cross-pollination of ideas. This is very important for us.
There are also infrastructures such as fiber and high speed internet in Yaba cluster. MainOne and Lagos State Government came together to partner in an initiative which is aimed at providing fiber down to Yaba and the research Universities (Yaba College of Technology and University of Lagos). There is funding for startup businesses now compared to before where there was no funding. I think there is going to be an explosion of startups in Nigeria technology ecosystem.
Because of this explosion, there is going to be some good ones, consequently, more startups will spring up. These startups will make angel investments because they understand technology startups. A lot of technology companies are beginning to get interested in what is going on in Africa especially in the area of technology basically because of small wins.Oyedotun
The Co-Founder of Paystack, Shola Akinlade, sheds more light on the discourse from the angle of optimism and a better future for the growth of the technology solutions.
There are huge growth potentials for financial technology startups. Nigerian businesses collected about $150billion 2016, most of which was collected offline.Akinlade
Akinlade’s argument is that the digital economy on the continent is growing fast, and the country alone currently sees over 6 million new internet users yearly, adding that such a high proportion of payments are still conducted offline, but with more people coming online yearly things about to change for the better.
The growth trajectory is staggering. It’s easy to say that there will be more digital transactions this year than last year, and this is a trend that will continue for a very long time.Akinlade