By Isa Ali Ibrahim Pantami, PhD.
When the Vice President of the Federal Republic of Nigeria, Professor Yemi Osinbajo SAN, gave his steering speech at the 2016 e-Nigeria International Conference and Exhibition, emphasising the point that the President Buhari administration is set to reset Nigeria’s economic architecture by diversifying from oil dependency and leveraging on ICT as a critical contributor to the economy, some people felt it was the usual talk by political leaders, without any intention to bring the vision to fruition.
But events have come to prove that real change is happening in the way government is engaging with Tech.
In 2017, Mr President himself attended the e-Nigeria International Conference and Exhibition to give his scorecard on support for the Information Technology sector and his plans for its further development.
It was therefore not a surprise when I received the mail that I was to join His Excellency the Vice President (VP) for a tour of the Innovation Hubs in Lagos. Although NITDA through its Office for ICT Innovation and Entrepreneurship (OIIE) embarked on a similar trip in November 2017, having to accompany the VP is something special.
Why VP visited
The purpose of the visit was to gain first-hand knowledge of the innovation ecosystem. The Honourable Minister of Science and Technology, Dr Ogbonaya Onu, was also on the VP’s entourage.
This was not a regular official function, it was not a time of talking and lecturing the citizens about what government has done or not done; it was a time to LISTEN. Indeed we listened to our young, vibrant, passionate and highly motivated youths. They demonstrated to us that the best of Nigeria is yet to be unveiled. It was a tour that gave hope to all. The young people saw in the government team, a breath of fresh thinking.
They did not see the grand-standing and disruptiveness that such a visit would have caused in the past. They remained at their work, coding, some were eating some were taking selfies with the VP. It was such a joy to see the glee on everyone that day.
We listened to the Paystack story, how Shola and Ezra began a quiet revolution in payments processing back in 2014.
Paystack has now become one of the most efficient payment processors in the country. Many did not pay attention to Andela until Mark Zuckerberg announced an investment in the Startup.
Andela set out to solve the problem of top-class IT skills gap in Africa and the world. Andela recruits interns after a rigorous process in which less than 1% of over 70,000 scale through.
The interns then go through a six-month intensive bootcamp that sharpens them to become world-class.
The energy, intelligence and zeal of the over 500 strong office of young people in T-shirts and Jeans is enthralling. Sulyman, the VP Global Operations, gave the visitors an expose on the business model, opportunities and challenges of Andela.
Flutterwave is sited in a bunker-like structure. This company was founded by a team of ex-bankers, entrepreneurs and engineers. In less than two years of its founding this payment gateway has processed transactions valued over $2 billion and has over 45,000 merchants.
Time would fail me to talk about Autogenius, Carido, Asoko Insight, Branch. These are startups that provide solutions ranging from auto-mechanics, micro insurance, micro loans, corporate intelligence etc. Indeed the Nigerian genius is unleashed and we at NITDA are paying close attention.
We visited 6 places and listened to 14 Startups tell us what they do. FarmCrowdy solves the problem of under-utilized arable farm lands, help farmers access capital, help people invest in agriculture without owning a farm and everybody gets a share of the profit.
That is amazing indeed. At Africa Fintech Foundry (AFF) operated by Access Bank Plc., we saw an organisation getting itself ready for the new face of banking and finance.
The final stop was at Co-Creation Hub, Yaba. This pioneering beehive of innovation is not resting on its oars. Cc-Hub is giving Nigeria its first home-grown cyber-security platform called Safe-Online.
In the same place we met Re-Learn, a Startup that is working to transform difficult educational concepts into funny cartoons. We spoke with the Managing Partner of Growth Capital, Tunji Eleso who told us how they are helping fund innovations of Nigerians by Nigerian investors.
Throughout the tour, I as the Director General/CEO of the National Information Technology Development Agency (NITDA) paid very close attention and took notes copiously.
I noted the opportunities and challenges of the sector as well as the impact or gap of our interventions as an Agency of Federal Government. Since we came on-board, I had often reiterated my resolve to impact the ‘Forgotten Ones’ in the tech ecosystem.
By this I mean the enterprising Startups, the Women, Children and small enterprises. One of the things we did was to reposition OIIE not as a competitor with the Hubs, rather to be a facilitator and policy compass to ensure the sector got all what it needed to grow.
In this regard, we prepared a draft of the Nigerian ICT Innovation And Entrepreneurship Framework (NIIEF). The objective of the Framework is to cast a vision for the ICT innovation ecosystem, identify the stakeholders, define critical roles of NITDA in their development and responsibilities of all stakeholders.
A stakeholders’ engagement was held in the 4th quarter of 2017, where representatives of the Hubs, Academia, States and Federal Government all made inputs to the Draft.
The Draft was further scrutinized at the recently organised I4Policy Hackathon held in Lagos and Abuja. Inputs of stakeholders have been taken and would continue to be until we have a document fit-for-purpose.
The IT Projects Clearance function of NITDA has also become a veritable instrument to empower Startups in Nigeria. The Committee has been gathering data to identify IT projects that can be reserved for the small-scale tech companies.
Our goal is to engage the relevant Agencies to find a way to reduce the entry barrier for young people to bid and win government contracts in areas they have shown relative competence.
Also, we have insisted on local content where such capacities exist. Another initiative we are experimenting at NITDA is to match Startups and Hubs with successful winners of our project bids.
This has proven successful in some of our programmes and projects as the young innovators bring agility and fresh-thinking to the process while getting experience and finance. We would ensure this programme continues and grows to become a model for implementing IT and other projects in Nigeria.
Indeed, the creative zeal and passion of the Nigerian youth has caught the attention of the world and President Muhammadu Buhari’s administration is paying close attention and giving the necessary support without disrupting the disruptors.
Isa Ali Ibrahim Pantami, PhD, is the Director General/CEO of the National Information Technology Development Agency (NITDA)
Maximising the potentials of e-commerce in Nigeria
BY: Emmanuel Nwachukwu
The e-commerce revolution which sparked off in 1994 with a meagre $12.48 worth of transactions, has grown to a whopping $27 trillion market in 2020, according to eMarketer’s rating. Although the revolution started in the United States, it quickly extended to many countries in Europe and Asia, coming later to Nigeria in the past decade.
Unlike in the US and Europe, the revolution did not quite hit Nigeria with force as adoption of e-commerce was very slow for obvious reasons like internet penetration, distrust for virtual dealings, poor logistics infrastructure, huge capital requirement and low disposable income.
These resulted in the low patronage that, in turn, accounted for the high fatality rate of the many e-commerce platforms that ventured to open shop in the country. In order to overcome most of these challenges, the e-commerce platforms had to find their own way out by singlehandedly creating the environment they needed to thrive.
Jumia Nigeria, Africa’s leading e-commerce platform, and a couple of other e-commerce platforms that survived found a way to navigate this less-than-desired rate of patronage to stay afloat. For example, with regards to the issue of logistics, that is, moving the merchandise from their warehouses to their customers, these e-commerce platforms moved away from their traditional buying and selling to logistics operations. Jumia Nigeria, according to its chief executive officer, Massimiliano Spalazzi, entered into strategic partnerships with logistics services providers in order to deliver its customers’ orders to them.
“Most of our peers abroad ride on the back of the existing logistics infrastructure in their countries of operation. For example, Amazon, on inception, relied on the US Postal Service for their delivery needs until they were able to develop their own channels. We, in Nigeria, do not have such a luxury as the local postal services are unable to meet our desired speed so we had to create our own logistics infrastructure, albeit the huge capital costs,” Spalazzi said.
To address the country’s logistics needs, the government could do well and provide more funding for the revitalization of the Nigerian Postal Services (NIPOST) for greater efficiency. If this is done, NIPOST could provide logistics support to the e-commerce platforms at a much-reduced cost. This will, in turn, deliver greater value to the customer and boost the e-commerce sector in general.
On the issue of trust in the e-commerce sector, the Central Bank of Nigeria (CBN) and the fintech companies are working to enhance the level of trust in the sector by ensuring that transactions are concluded as fast as possible and that, in the case of failed transactions, refunds are made within 48 hours. Although this is an improvement of the seven days it used to take for the resolution of such issues in the past, it is still below the expectation of these customers, who want an immediate refund. To this end, Jumia, according to its CEO, has created its own payment platform, JumiaPay, for more efficient, secure and convenient payment experience.
According to Spalazzi, “Jumia customers, who use JumiaPay for payment of their orders, get instant reimbursement if their transaction fails to go through unlike their peers on other platforms, who would not have to wait for 24 to 48 hours for their refund.”
Another area the government can help to boost the e-commerce sector is to grow internet penetration in the country. For a sector that largely depends on the internet for its operations, a 42 percent internet penetration is a big snag. Worse still, the internet services are poor and unstable at times, and come at very high costs to the users. The government, through its regulator, the Nigerian Communications Commission, should work with the internet service providers to build more infrastructure that will enhance data carriage across the country, and to ensure that such services are delivered at cheaper costs.
A major reason many service providers don’t last for long in business in the sector is the huge capital requirement for e-commerce operations. In Nigeria, access to finance is highly limited or comes at a high cost, especially for start-ups. This, coupled with lack of logistics and internet infrastructure, makes the e-commerce business a nightmare for existing and prospective operators. To address this access to financing issues, the government may consider creating financing windows for operators in the sector.
Although some of these challenges, especially that of access to finance, are not peculiar to the e-commerce sector, the call for some kind of special intervention in this sector is based on the country’s coronavirus disease (COVID-19) pandemic experience. The e-commerce sector contributed heavily to the measure of success the government achieved when it issued restriction orders on movement and economic activities in its bid to contain the community spread of COVID-19 in the country. These e-commerce platforms took their customers’ orders during the lockdown period and supplied the same to them in the comfort of their homes. They still do this now that we are in the post-lockdown era.
The period of the lockdown was actually an eye opener as to the role the e-commerce sector could play in the life of Nigerians, on the one hand, and on the economy on the other. Although some Nigerians had partially converted to e-commerce before the COVID-19 pandemic lockdown in the country, the lockdown gave the biggest incentives for the conversion of many Nigerians to online shopping. Restricted by the force of the law and the safety concerns, many Nigerians turned to e-commerce for the supply of most of their essentials.
Consumers were not the only group of people that benefited from e-commerce during the lockdown, and the period after. Some global brands including Coca-Cola, Procter & Gamble, Mastercard etc moved their products and services to the Jumia platform, either showcasing their products on the Jumia Mall or advertising their products on the Jumia Marketplace and benefiting from the Jumia’s wide reach and logistics operations.
From the roles that Jumia and other e-commerce platforms played during and after the lockdown days, and the fact that the pandemic is still with us, it is evident that the e-commerce sector deserves a special attention to assist it in achieving its potentials of keeping Nigerians safe, at least, until the pandemic has been defeated.
*Emmanuel Nwachukwu, a Business and Communication Strategist, writes from Lagos
E-commerce’s contribution to Nigeria economy, the challenges and need for government intervention
BY: Ezedi Udom
E-commerce platforms have proven to be critical enablers of economic growth and social development for Nigeria in spite of the myriad challenges occasioned by the tough operating environment.
A key player, Jumia is fostering cashless and financial inclusion by encouraging Nigerians to move from brick-and-mortar malls to selling and shopping online and making payment for goods online thereby promoting the digital economy.
With Jumia online marketplace, usage of electronic transactions in Nigeria continues to increase, banks are becoming more innovative with electronic banking products and services while more fintech companies are investing in the economy.
Jumia is promoting the growth of MSMEs and large businesses by offering sellers its online marketplace, logistics, and last-mile platforms to increase their customer base, reach the target market faster and become more competitive, profitable, and sustainable.
Support for enterprises and the Jumia system are solving the critical high unemployment problem, especially among the youth by creating direct and indirect jobs. Jumia’s over 5,000 employees form a significant critical mass of employment.
National Bureau of Statistics (NBS) reported that SMEs in Nigeria contributed about 48% on average to the national GDP in the last five years and accounted for about 50% of industrial jobs and nearly 90% of activities in the manufacturing sector.
E-commerce is becoming a potent tool for the government to optimize digitalization as a key component of economic diversification, and also to meet the new compelling need of enforcing social distancing as a key measure in flattening community transmission of COVID-19.
The Presidential Task Force on COVID-19 has issued several warnings of increasing number of unsuspected asymptomatic carriers of coronavirus with Nigeria now at “active community transmission” stage.
Thus, online shopping, digital payment/virtual transactions and online interactions hold the ace for the future to promote social distancing and avoidance of crowded places such as brick-and-mortar shopping malls, supermarkets, open markets and banking halls where the possibility of contracting the virus is high.
COVID-19 outbreak has significantly disrupted global supply chains among other activities. The Economist indicated that online retailers including Jumia boomed in the wake of the Ebola outbreak in Nigeria, in 2014, as more consumers shopped online for fear of contracting the deadly disease. Orders on Jumia reportedly tripled due to increased demand for hygiene products like hand-wash, bleach and other cleaning products.
The same trend also played out recently during the peak of lockdown in Nigeria. Scarcity of protective items like hand sanitisers, facemasks, gloves and reagents, and hoarding and price gouging of essentials like tissue paper and sanitary products was reported in some parts of Nigeria due to surge in demand amidst supply shortages.
Through its online marketplace and partnership with sellers such as Reckitt Benckiser, Procter & Gamble, Unilever, The Coca-Cola Company and other sellers, Jumia helped to mitigate supply crisis by facilitating movement of inventories from the factories to its warehouses and online marketplace and then to the consumers.
Jumia also ensured the sellers maintained fair pricing policy while it reported some sellers to the Federal Competition and Consumer Protection Commission over price gouging.
Jumia defied constant harassment of its field workers transporting groceries and other agricultural produce from the hinterland to the cities, by security agents enforcing interstate border movement restriction, who ignored government’s designation of e-commerce and logistics operators as essential service providers.
Jumia Food was on the move delivering food packages to millions of Nigerians observing lockdown, thanks to partnership with third parties like QSR outlets and kitchens.
With JumiaPay and Contactless Delivery platforms, social distancing and cashless transactions were significantly promoted, thereby limiting person-to-person contact and containing further spread of COVID-19.
Jumia’s Q1 2020 financials indicated that the e-commerce and e-payment system indeed increased demand for brands and caused uptake in delivery of essentials to more people. Sellers also sold faster while more brands and sellers were eager to join the Jumia marketplace and logistics/supply value chain to boost access to market.
There was also strong demand from offline convenience retailers to join the Jumia on-demand platform and increasing advertisers’ interest for online channels as a result of consumption shifting online.
Visa in a June 2020 survey affirmed that 71% of consumers interviewed among the banked population in Nigeria shopped online for the first time as a result of the pandemic.
However, despite showing high growth potential and occasional spikes in online shopping in crisis times, these cannot be interpreted as long-term sustainability for Nigeria’s retail e-commerce.
E-commerce operators are faced with challenges that are inimical to their growth and the larger economy given the interplay between e-commerce and MSMEs.
Dearth of critical infrastructure like roads, inefficient transportation and insecurity inhibit movement of groceries from rural areas where food crops are planted to the cities and movement of goods across distant locations. Erratic electric power supply and multiplicity of tax also increase the cost of doing business in Nigeria.
PricewaterCoopers in its June MSME Survey 2020 with the theme, Building to Last: Navigating MSME Growth and Sustainability – A New Decade, noted that lack of infrastructure, inadequate skilled manpower, multiplicity of taxes, high cost of doing business among others still persist and hindering SMEs growth and development.
Barriers to obtaining bank loans is a major obstacle to small businesses including e-commerce operators thereby limiting their capacity to expand their infrastructure. “In emerging markets and developing economies, 55% to 68% of formal SMEs are either unserved or underserved by financial institutions, leading to a total credit gap estimated to be USD5.1 trillion,” PwC noted.
It estimated the financing gap for Nigerian MSMEs to be about N617.3 billion annually (pre-COVID-19 pandemic), adding that, based on analysis of data from the CBN annual statistical bulletin, small businesses accounted for less than 1% of total commercial banking credit in 2018. The NBS added that less than 5% of SMEs have been able to access adequate finance for working capital and funding business growth/expansion.
Low consumer trust about the quality of online goods and the activities of cyber fraudsters as well as low purchasing power of Nigerians as a result of loss of income or job due to COVID-19 inhibit new customer acquisition and retention. Many times, ROI for huge marketing and advertising spend on customer acquisition is nil.
E-commerce platforms’ fatality has been recorded within the last eight years. For example, Efritin.com, an online marketplace, shut down after barely 16 months in Nigeria. Its Swedish investor, Saltside, attributed that they “didn’t get desired returns on their investment.”
Nevertheless, the time looks good to spur e-commerce growth in Nigeria. Forecasts show that online retail stores will grow due to expected influx of online shoppers due to post COVID-19 new normal.
But governments must promote an enabling environment for e-commerce and MSMES to thrive. Fix critical infrastructure such as roads, transportation, power and telecommunications. Ease of doing business initiatives including tax incentives for MSMEs, harmonisation of taxes, improved security and increased access to credits must be implemented.
Encourage adoption of online shopping and electronic payment among Nigerians, and digitisation of businesses to strengthen cashless and financial inclusion policy.
In light of the expected take-off of Africa Continental Free Trade Agreement (AfCFTA) regional trade market come January 2021, the growth of e-commerce directly impacts SMEs capacity, competitiveness and quality of services they render.
With Nigeria’s current online commerce estimated at $12 billion, and projection to reach $75 billion in revenues per annum by 2025, according to McKinsey, the economic outlook for the country looks good post COVID-19 and beyond. But removing barriers in the way of e-commerce and SMEs is exigent.
*Ezedi Udom, a Business and Communications Expert writes from Lagos
[OPINION] Pantami: Finally, the knives are out
BY: Desmond Ekweme
The knives are out. The hangman’s noose has been weaved. The pit is dug. The enemies of state are at work. They are poised to strike. They are hell bent on pulling down the system. Their targets are close allies of President Muhammadu Buhari.
What is the bone of contention? What is their grudge or grouse? What do they want? Why are they desperate? Why are they mischievously wicked? Why are they on manhunt of Buhari’s close friends, trusted hands or loyalists?
Simply put, it is all about 2023. The race is on. “Operation bulldozer” may have been secretly launched. It is to bring down all those or anyone likely to be considered by Buhari (in the imaginations or thoughts of the enemies of the system) as a possible successor outside them.
The real enemies of Buhari’s administration are out in a dog eat dog battle. They are not outsiders. They are not members of the opposition Peoples Democratic Party (PDP). They are not from the South East perceived to be foes of Mr. President…and they are not from the military. They are insiders and members of this government…Yes, his government.
They are sworn enemies of Mr. President who have been hiding under the guise of friends, associates and party loyalists cum chieftains. They are now ready to show their true colours as Buhari is gradually winding off his send tenure. Their days of pretence are over. They are now poised for war. They have put on their armour of war. They feel that Buhari may not consider them fit to replace him. They want to create anarchy.
Three weeks ago, Yours Sincerely did a piece on this space titled Who Is Afraid of Pantami? I tried to paint a picture of the ordeal of a young, vibrant, enterprising, brilliant man in the person of the Honourable Minister of Communications and Digital Economy, Dr. Isa Ali Ibrahim Pantami.
His closeness to Buhari is a pain in the neck of his detractors. Despite his result-oriented reforms in the Communications and Digital Economy ministry, he remains the target of his enemies who indirectly are enemies of Buhari himself.
His sin is why should his name be mentioned among the six persons earlier considered as replacement for the Late Chief of Staff to President Buhari, Abba Kyari. His sin is that he is even being considered in a proposed joint presidential ticket of Osinbajo/Pantami come 2023. His sin is giving Nigerians leverage by reducing the crazy tariffs of telecommunications network providers. His sin is quietly creating employment opportunities for young qualified Nigerians in his ministry
I raised the alarm that Pantami is the target of these highly influential and powerful group who have employed all manners of ancient and modern, analogue and digital….and crude and refined means of nefarious acts including employing a section of the media to pull him down.
Nigerians who have been following the malicious story of Pantami and the purported houses he bought for his three wives must have understood the rational, sense, motive, mindset, target and intension of its sponsors. Sheer wickedness, cheap blackmail and mere witch-hunting.
Nigerians should wonder when it has become a crime for a Muslim to marry three wives? Nigerians should wonder why the wives of the Minister should be dragged into the acquisition of properties? Of course, their story will not sell if they fail to attach the wives angle to it. Nigerians should wonder why owning properties if true becomes a crime especially if the said properties were not corruptly acquired.
But ironically, the man says, the properties are not his. He added that since he became a minister he has not bought any property in Abuja or elsewhere. Yet, despite this clarity, many are forced to believe that the properties are his even when the architect that designed one of the properties has confirmed that Pantami is not the owner.
But is it a crime if a minister legitimately acquires a property or properties without tampering with public funds or misappropriating funds under his or her care? Are all properties acquired by public office holders gotten through embezzlement of public funds? If yes, is it no longer the duty of anti-graft agencies to investigate?
Are the sponsors of this malicious report playing the role of whistleblowers? Has any petition been written against the Minister in connection with missing funds in his ministry? So what is or are the basis for this report? These and many more are the questions well-meaning Nigerians should ask the sponsors of the report and the medium or reporter(s).
Perhaps the reporter(s) should furnish Nigerians with a dossier of all the properties and family background of all the cabinet members of Buhari’s administration or government. Picking on Pantami alone to discuss and disclose his number of wives is not only an amateurish job, it is equally a myopic, naive and childish act….and as well a clear witch-hunting exercise especially in a situation when and where there is nothing negative to say or write about him.
Mr. President should be watchful as his second term cruises very fast thus, approaching 2023. The knives are out. His loyalists are targets. His party men are his foes. The spoilers are at work if not at war. They want to wreck the sailing ship. If they don’t get it, no one else should. They are desperate predators out to feast on loyalists of Mr. President as potential preys.
Mr. President should beware of the Isle of March! He should equally warn the enemies to leave Pantami alone! The enemies are within his government!
*Desmond Ekweme wrote from Abuja
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