Ict/Telecom
FG Seeks N150bn Investment In ICT Sector By 2025
To unleash Nigeria’s potential for industrialisation and sustainable economic growth, and to ensure competitiveness in a global digital economy, the government has said it will take measures to digitise the economy and make digitalisation a key driver of national economic development strategies.
The government will ensure that, by 2025, critical digitisation challenges are addressed so that the sector can achieve its job creation and economic productivity potential.
To achieve this, the Federal Government, in the National Development Plan (NDP) 2021 to 2025, Volume 1, has projected about N150 billion investments.
The N150 billion, which according to the Federal Government, is public investment, will be spread across priority projects in the sector as well as projects essential to the operations of the relevant ministries.
In addition, the government said the ICT sector is projected to facilitate the formation of up to $1 billion in private equity and private capital investments in digital infrastructure of approximately $40 billion.
The document noted that despite recent improvements in Nigeria’s ICT sector, several challenges, including low funding and weak digital infrastructure, especially in noncommercial hubs, have limited the value-creation potential of businesses.
These constraints include, digital and financial exclusion of key segments of the population, intermittent access to power which threatens the development of the ICT sectors, particularly to the telecoms and IT services and last-mile connectivity, lack of local funding for promising start-ups (over-reliance on foreign funders who may not necessarily fund start-ups based on local needs) and low capacity of digital infrastructure and institutions, especially in non-commercial hubs.
Others are low skills development due to skills mismatch between academia and industry, leading to a shortage of workers with digital skills; new risks associated with data privacy and cybersecurity challenges.
The Federal Government said these constraints must be addressed to reduce the risk of low regional and global competitiveness, low economic productivity, business exits, and brain drain.
“Thus, to create high-growth businesses, including unicorns and maximize job creation opportunities, the digital economy building blocks are of strategic importance and priority,” the document stated.
While challenges exist, FG said Nigeria has a significant young, tech-savvy, resilient, and entrepreneurial population, which creates opportunities for the ICT sector.
The FG, which puts Nigeria’s population at approximately 200 million, said a privately held start-up with a valuation exceeding $1 billion, noted that the population makes Nigeria an attractive destination of choice for ICT services and products, and the installation of under-sea cables, which has boosted bandwidth capacity in the last decade and provided a framework for digitisation across the country.
According to the document, these trends have led to an influx of world-leading multinationals establishing operations in Nigeria as well as international equity investments into start-ups operating in these sectors.
“Therefore, further investments in the sector could unlock substantial job creation, widening the pool of skilled talent and revenue generation opportunities,” it noted.
FG noted that the ICT sector is growing faster than other economic sectors in Nigeria. It pointed out that in 2020, the sector grew by 12.9 per cent, the only sector with double digit growth in that year.
Furthermore, it said the telecommunications sub-sector recorded a growth rate of 15.9 per cent, which is the highest growth rate in the last 10 years.
This growth, according to FG, was driven by the innovative activities of entrepreneurs, but also enabled by recently introduced policies, which include the National Digital Economy Policy and Strategy (2020-2030), the Nigerian National Broadband Plan (2020-2025) and e-Government Masterplan to mention a few.
FG revealed that Nigeria’s technology start-up ecosystem also experienced strong growth. The document noted that in 2019, Nigerian startups raised $747 million in venture capital investment, accounting for 37 per cent of all startup funding in Africa.
The Managing Director, Shell Nigeria Exploration and Company Limited (SNEPCo), Elohor Aiboni, said Bonga, Nigeria’s first deep-water asset, has recorded major milestones, due to effective leadership, cutting-edge technology, continuous improvement and collaboration with stakeholders.
She noted that since coming on stream in November 2005, Bonga has maintained a track record of production that saw it achieve one-billion-barrel export on February 13, last year.
In her presentation, titled “The Bonga Journey to a Billion Barrels”, at the ongoing 2024 Offshore Technology Conference in Houston, Texas, United States, Aiboni, said: “SNEPCo is grateful for the contributions of all the parties to the Bonga story and we can all be proud of the milestones.
“Bonga has been consistent. In 2014, nine years after coming onstream, it achieved half a billion barrels of crude and doubled it in 2023. We have worked relentlessly to ensure excellent asset management, project and wells delivery and deployment of technology and innovations in our operations”.
According to her, these factors, “coupled with the supportive partnership of the Nigerian National Petroleum Company Limited and our co-venturers – TotalEnergies, EP Nigeria Limited; Nigerian Agip Exploration; and Esso Exploration and Production Nigeria Limited, make Bonga stand out as a world-class investment case”.
She continued that, “SNEPCo also enjoyed the support of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Content Development and Monitoring Board (NCDMB) in the success of Bonga operations”.
Aiboni also listed the challenges of keeping the Bonga Floating Production, Storage and Offloading vessel full as the asset ages and dealing with unexpected developments with subsea wells and equipment.
She said: “SNEPCo responded with a campaign of operational excellence, which among other initiatives, led to the creation of a programme known as the Bonga Business Improvement Plan that continually reviews and identifies improvement initiatives and drives sustainability in operations and upskilling of staff.
“The Bonga success story has been led by Nigerians who have been managing directors of SNEPCo since it was established in 1993, in a deliberate policy by Shell to develop indigenous manpower for deep-water operations in Nigeria.
“Today, some 97percent of the SNEPCo workforce is Nigerian and overall, Bonga has helped to create a new generation of Nigerian deep-water professionals.
“Our vision at SNEPCo remains to be the best deep-water business, powering growth and achieving net zero emissions in line with Shell’s Powering Progress strategy”.
Banks’ borrowings from the Central Bank of Nigeria (CBN) fell month-on-month, (MoM) by 44 percent to N12.16 trillion in April from N21.7 trillion in March.
Analysis of latest data from the CBN shows that the 44percent drop represents the first MoM decline in banks borrowing from since January when it increased by 268.7 percent to N3.6 trillion from N976.29 billion in December 2023.
However, further analysis showed that banks’ deposits in the CBN SDF grew MoM by 118.4 percent to N428.97 billion in April from N196.37 billion in March 2024.
Banks make use of the SLF to access liquidity to run their day-to-day business operations while the Standing Deposit Facility window (SDF) on the other hand, is an overnight deposit facility that allows banks to lodge excess liquidity (money) with the CBN and earn interest.
The decline in banks’ borrowing from SLF may reflect an increase in banking system liquidity and also the decision of the apex bank last year to remove the limit on the remunerable daily placements by banks at the SDF.
According to the CBN Governor, Mr. Olayemi Cardoso, the CBN removed the cap on the remunerable SDF to increase activity in the SDF window and manage liquidity.
A Financial technology expert, Olatunji Akinrinola, has highlighted the exponential growth of the FinTech industry, which according to him, was driven by technological advancements.
Akinrinola made this assertion in a press release recently, where he stressed that the role of technology in driving this exponential growth in the FinTech sector was very outstanding.
According to him, Technology has revolutionised the way financial services are delivered, making them more accessible, efficient, and inclusive.
“Through innovations such as mobile banking, digital payments, and blockchain technology, FinTech companies have been able to reach a larger population and provided them with access to financial services”, he stated.
Akinrinola emphasised the role of technology in enabling financial inclusion, adding: “Technology has democratised access to financial services, particularly in regions with limited banking infrastructure.
“Mobile money platforms and digital wallets have empowered individuals to conduct financial transactions conveniently and securely, without the need for traditional banking services”.
He also underscored the role of Artificial Intelligence (AI) and data analytics in driving innovation within the FinTech industry, noting: “AI-powered algorithms and predictive analytics have revolutionised risk assessment, fraud detection, and customer personalisation in financial services.
“These technologies enable FinTech companies to provide tailored solutions and mitigate risks more effectively, ultimately enhancing the overall customer experience”.
Akinrinola stressed the importance of regulatory frameworks in fostering the growth of the FinTech industry.
“While technology has accelerated the growth of FinTech, it is essential to establish robust regulatory frameworks to ensure consumer protection and maintain market stability. Regulators play a crucial role in balancing innovation with risk management, thereby creating a conducive environment for the sustainable growth of the FinTech sector”, he stated.
Akinrinola underscored the role of technology in driving the exponential growth of the FinTech industry, saying, “Technology has been a game-changer for the FinTech sector, enabling innovation, expanding access to financial services, and driving economic growth.
“As technology continues to evolve, the FinTech industry will undoubtedly play a significant role in shaping the future of financial services ecosystem”.
Corlins Walter
