Connect with us

Opinion

Digital Economy: Why Nigeria must pursue more investments in technology

Published

on

Digital Economy
Nigeria is a very unique country for many reasons. With her plentiful gifts as a nation, the country is continuously plagued by bad leadership in almost every sector.

How else does one explain a nation where leaders continuously spend on bogus contracts and projects while the citizenry just go about their business like men that leave the house when the roof is on fire?

Our heavy dependence on oil has drawn us back for many years and the corrupt leaders continue to borrow huge sums of money to line their pockets, that will take us decades to pay off.

In a time like we are due to the coronavirus epidemic, it is more important than ever to look inwards to solve our problems. The current oil prices are indicators of what is to come if we don’t shift our focus away from oil.

We have heard calls for diversification for decades without any administration being responsible enough to do the work.

Well, whether we adjust or not, nature and indeed the world has a way of paying us in our coin. And I must remind the reader that nature does not ever like vacuums.

The technological sector in Nigeria is a sector that the Nigerian Government should be backing with both measurable investments and good governmental policies that will help businesses in the sector thrive and provide employment to our young people.

With little or no investment in the sector, innovative Nigerians are already making huge strides, leaving one to wonder what we can achieve if the government puts the sector in its peripherals.

In many developed nations, technology played a vital role in the development of their economies, and Nigeria will be the better for it, if it adopts economy as a tool for economic development.

NITDA

Minister of Communications and Digital Economy, Dr, Isa Pantami speaking during the virtual commissioning of NITDA training and research academy.

In this post on Economic Discussion, the author makes a case for the relationship between technology advancement and economic development. The author holds that “technology can be regarded as primary source in economic development and the various technological changes contribute significantly in the development of underdeveloped countries.”

In a research paper by Uguru Uchechukwu et al.2016, an argument is made for the place of information and communication technology in economic development. The authors say, “The Information and Communication Technology (ICT) has become an important component of the modern world. Its importance can never be overemphasized.  Rapid advances in information  infrastructure  are  dramatically  affecting  the  acquisition,  creation, dissemination,  and  use  of  knowledge,  which in  turn  affects  economic  and  social  activities,  including  how  manufacturers,  service providers, and governments are organized, and how they perform their functions.”

ALSO READ  Nigeria recorded N3.94tr trade deficit in Q1 - NBS reports

In the abstract for his research paper “Information and Communication Technologies in the Nigerian Economy,” Sunday Mauton A. Posu, an economy researcher says, “Technological advancement is known to impact fast rate of economic development.” agreeing with the observation that technology and economic advancement are same-road travellers.

In this post for Fair Observer, the Head of Communications for Africa at the UK Department for International Trade, Lee-Roy Chetty, says; “Technological innovation and Information Communication Technologies (ICTs) represent a way for developing world nations to foster economic development, improve levels of education and training, as well as address gender issues within society.”

These positions and many more not mentioned here have all pointed to one central idea: for a nation like Nigeria to scale up its prowess in the committee of nations, it has to embrace technology as a tool for driving the economy.

But unfortunately, the country has been dependent on crude oil for decades and looks set to be in the same position for at least another decade if something drastic is not done to bring about a shift.

On Nigeria’s dependence on crude oil, Ibukun Falade, a Business Consultant who currently works with VTpass, a payments platform driven by tech, said, “The period when oil was the icing on the cake is past as that was in the times of our fathers.”

Agreeing with Ibukun, Obasesam Okoi, writing on “The Paradox of Nigeria’s Oil dependency” for Africa Portal chronicles  Nigeria’s dependence on oil thus, “The most provocative policy of the Nigerian government was the dependence on oil resources as a source of foreign exchange earnings to the detriment of agriculture. However, the collapse of oil prices in 1986 produced severe consequence such as a shift in the global economy that triggered a crash of the stock market, soaring inflation, and high unemployment rate in Nigeria. By implication, the dependence on oil revenue to finance national development has made the Nigerian economy highly susceptible to oil price volatility.”

Reacting to the recent fall of crude oil prices due to the coronavirus epidemic, Dr Nonso Obikili, the Director at Turgot Centre for Economics and Policy Research said, “”Nigeria is still hopelessly dependent on crude oil and so anything the impacts the price or demand for crude oil impacts us. And because we have no fiscal buffers or significant foreign reserves the impacts will be significant.”

The truth is that the Nigeria government itself realises that there is a problem of overdependence on oil, but the question has always been what they should do about it.

ALSO READ  7 Things you should know before starting an online business

ICT and indeed technology will be the best sector for the Nigerian government to focus its attention on due to a plethora of reasons.

The first, and most important reason, as I earlier discussed is because there is a parallel between technology growth and economic diversification.

Schumpeter, an economist widely regarded as one of the 20th century’s greatest intellectuals, in his theory of innovation, as quoted by Business Jargons “posits that innovation in business is the major reason for increased investments and business fluctuations.” Innovation as used here refers to technology advancements that help make doing business better.

Moreso, technology advancements do not just affect the economy directly. They also affect the society at large.

One reason why Nigeria must focus on technology is that it will in turn make production and manufacturing easier in other sectors. Agriculture, textile, mining, textile and trading are all sectors that can be affected positively with technological advancements.

Hülya Kesici ÇalÕúkan,agreed with this in his paper titled “Technological Change and Economic Growth” where he posits that “The use of new technologies paves the way for production of new cheaper goods and for capital accumulation and,for that matter, for an enhanced international competitiveness of individual countries, as well as to an enhanced quality for scientific research institutions, while, on the other hand, contributing to cultural and political development of societies.”

Also agreeing with the point, Hardeebusiness.com wrote “Technology can save the time it takes to produce a good or deliver a service, contributing to the overall profits of a business. Technology can contribute to the efficiency of a business’s output rate, allowing for larger quantities of products to be moved or of services to be rendered.”

Another reason why Nigeria must invest in technology is that it allows you to play on a level playing on level grounds in international politics. If you take a cursory look at third world countries that grew into second world countries and in some case first world countries, one theme is always present, technology advancement.

Countries like China, Hong Kong, Indonesia, Malaysia, Singapore, South Korea and Thailand have scaled up their economic development through investment technology.

Noting the role that technology played in the development of China, Ruchir Sharma writing for India’s Economic Times said, “By 2017, tech accounted for as large a share of output in China as in Germany. A Tufts University survey ranked China the world’s most rapidly evolving digital economy. Visa’s CEO quoted a Beijing regulator saying 18 months earlier, the tech giants “were way too small to worry about, and now they’re way too big to do anything about”.”

ALSO READ  Power, poor transportation, port facilities killing Nigeria’s manufacturers - Adesina

Joel Campbell, writing for Brookings.edu also examines the role that technology played in the development of post-war South Korea. He writes, “Underlying Korea’s remarkable post-1961 economic development has been the development of a strong science and technology capacity. During the authoritarian regimes (1961-1988), the state created a rudimentary research capacity, primarily focused on creation of government-run research institutions, a technical university, and a central research park, as the private sector gradually began to muster its own applied research capacity. The late 1980s to late-1990s saw a change of direction, as Korea’s chaebol conglomerates became the lead actors in R&D. The well-funded National S&T Technology Program became the focus of state efforts, later superseded by the 21st Century Frontier Program and specified research funds. By the turn of the century, Korea had achieved strong aggregate performance in terms of numbers of researchers and funds spent on R&D, and has continued to build on that for the past decade.”

The arguments above and many more are reasons why Nigeria must invest technology to drive national development as a matter of urgency. The nation’s refusal to do more around technology is baffling because there are a lot of innovations in the area.

Which is why Ibukun says “Nigeria has a vibrant economy and a very adaptable one. It would interest you to know that  Nigeria is the largest technology market in Africa and has the largest telecom subscribers.”

“If Nigeria as a whole can embrace tech more and the government can allocate more budget to it, it will create more employment whereby we will have more employment and more independent workers who do not necessarily need office spaces or have to spend on transport to go to work.”

Nigeria must stop paying lip service when it comes to investing in the technology sector. Putting money in the sector will help but it will not do a lot.

If the country is serious about building a solid technology capacity, it must invest in a solid research and development institution, strengthen the research capacity of the country’s brightest minds, and create policies that will encourage an atmosphere where technology will flourish while encouraging the interest in science and tech at the grassroots.

Also giving access to controlled funds with which entrepreneurs can build capacity and innovation is key.

Ibukun Falade, a Business Consultant who currently works with VTpass, a payments platform driven by tech, said “To start with I’ll say the future is technology and the future is now.”

Saviour Adugba is a journalist by day and a poet by night. He is fascinated by the internet of things, virtual reality and connecting the dots for brands. Saviour is the Lead, Content Development at TechEconomy.ng.

Advertisement
Click to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Advertisement
Advertisement
Advertisement

Facebook