By Rafiq Raji, PhD
I was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) on 23 May 2019. Titled “Road to Economic Development: Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari. The following is the penultimate and fourth part of the highlights of my speech.
Scale-up the digital economy
The importance of the internet for job creation cannot be overemphasized. Making data, which 116 million Nigerian internet users (about 60% of the population) currently buy expensively, cheap or available for free at ubiquitous wifi hotspots is a simple way by which the authorities could easily scale-up the digital economy. The ministries and parastatals of the federal, state and local governments should all have free wifi hotspots at their various buildings and locations. Instead of sometimes meaningless and self-serving corporate social responsibility initiatives by the private sector, companies could instead make free wifi hotspots available to the extent they could across the country.
If the labour ministry is tasked in tandem with a massive public media campaign on where to find opportunities for digital skills acquisition and abundant digital economy jobs and opportunities to apply them to afterwards, many young Nigerians, who currently engage in fraudulent digital economic activities (“Yahoo, yahoo”, in local parlance) could be diverted towards positive and value-adding activities in the digital economy.
Recent research by Jonas Hjort and Jonas Poulsen in the American Economic Review, a highly rated academic journal, titled “The arrival of fast internet and employment in Africa” show how the arrival of submarine cables to various African countries increased employment and productivity. There were new firm entries into South Africa, for instance. And because fast internet infrastructure enabled firms to sell their wares abroad much easily, exports increased. And in Ethiopia, improved firm-level productivity was observed. This is not surprising considering employees were able to get real-time on-the-job training without having to travel abroad and so on. And these are just examples of how the internet enhanced local legacy industries.
But tech and the internet are also creating new industries that could very well help Nigeria and other African countries to leapfrog easily into services. In this regard, the experience of India is instructive. Of course, the downside to this is that the services sector tend not to be as labour-intensive as manufacturing. But put together with the suggestions for building our industrial base, the combined effort could easily reduce the employment rate by more than half.
Nigeria could easily be a talent factory; tech talent, especially. One of the abundant resources we are endowed with as a country is people. Intelligent people. And it is the one thing that does not require too much hard infrastructure to develop for what is an increasingly global digital economy.
How do I mean? You may wonder about the poor quality of our educational institutions, for instance. True, that is a constraint. But increasingly less so. How so? Anyone who genuinely desires a good education can avail themselves of abundant resources online. It then means that the priority of government should be to ensure that basic education at the primary level, is of high quality, available and compulsory for everyone. As most Nigerians already know how to use a smartphone, regardless of their education level, it is relatively easy for them to get assess to these online educational resources, if they choose to.
What if they cannot afford data to browse the internet? That is where government comes in. Whereas in the past, the poor went to the library to avail themselves of educational resources, the internet is now where they would be able to similarly do so in today’s didgital economy. So the authorities should make available free internet/wifi/hotspots across the country for the poor to go to for such purposes.
There should probably also be an aggressive awareness campaign to inform youths about the numerous opportunities on the internet for education, skill acquisition and indeed jobs. Perhaps a second initiative should be to do something about making data cheaper or free. For instance, it is probably more optimal to invest in free wifi spots than libraries at this time.
As you are well aware, a sizeable portion of Nigerians now have smartphones; purchased brand new or used. The current numbers range from 25-40 million smartphone users. One forecast (Statista) I am privy to suggests there could be more than 140 million smartphone users in another 5 years. If a diligent citizen has a smartphone, and the knowledge on where to find productive resources on the internet, surely such a diligent citizen should not be handicapped by not being able to afford data to browse the internet.
These are relatively easy things to do. Raise power tariffs, create free wifi spots anywhere and everywhere. Together with an imminent boom in the petrochemicals sector via the Dangote et al. refinery, we could be telling a very different but very positive story in just about three years from now.