With a budget of $500 billion over the next four years, the project aims to enhance computing capacity, create hundreds of thousands of jobs, and strengthen national security. 

An initial $100 billion will be deployed immediately, starting with a flagship data centre project in Texas.

SoftBank and OpenAI are the lead partners, with SoftBank handling financial responsibilities and OpenAI overseeing operations. 

Masayoshi Son, SoftBank’s CEO, has been named chairman of Stargate, with major stakeholders including MGX, NVIDIA, Arm, and Microsoft. Speaking about the scale of the project, Oracle co-founder Larry Ellison said, “Each building is a half a million square feet. There are 10 buildings currently being built.”

The Stargate initiative has already begun construction in Texas, marking the launch of its first data centre, which will eventually expand to other states. These facilities will include cutting-edge AI computing systems developed collaboratively by OpenAI, NVIDIA, and Oracle. 

The partners have also announced plans to scale up to 20 data centre installations by 2029, evaluating additional sites across the country to accommodate future expansion. Reports reveal that these data centres will include innovative AI chips designed by OpenAI, with semiconductor giants Broadcom and TSMC involved in chip production.

A Network of Collaborations

The project builds on longstanding partnerships. OpenAI and NVIDIA have collaborated since 2016, while OpenAI’s relationship with Microsoft has grown through its extensive use of Microsoft Azure for AI model training. Oracle’s existing agreements to supply AI computing resources also strengthen its role in the venture.

SoftBank’s deep involvement in OpenAI predates this project as the company previously committed $500 million to OpenAI’s funding round and an additional $1.5 billion to facilitate a tender offer for its employees. Again, Middle East AI fund MGX, which has invested in OpenAI, will also be leveraged in Stargate.

While the Stargate Project has good prospects, issues about environmental and social impacts haven’t been ignored. Data centres, known for their heavy water usage and high energy consumption, could stress resources in regions with limited infrastructure. Issues about the long-term job creation promised by similar large-scale projects have also been raised.

Nonetheless, experts like Goldman Sachs projects that AI-related data centre demand will account for nearly 19% of total power consumption by 2028, noting the sector’s quick expansion. A McKinsey report forecasts that spending on data centre infrastructure could exceed $250 billion within the next five years.

OpenAI CEO Sam Altman has called for fewer regulatory limitations to accelerate the development of critical infrastructure projects in the United States. Highlighting challenges in an interview, Altman said, “The thing I really deeply agree with [President Trump] on is, it is wild how difficult it has become to build things in the United States… Power plants, data centres, any of that kind of stuff. I understand how bureaucratic cruft builds up, but it’s not helpful to the country in general.”

Nonetheless, the Stargate Project has garnered support from stakeholders and government officials. Hence, with a focus on re-industrialisation and innovation, the initiative is expected to bolster AI infrastructure and boost the United States’ innovation in global AI leverage.

With the country’s natural resources, youthful population, and growing entrepreneurial sector, Nigeria has lots of prospects but achieving this target requires addressing structural and collaborative challenges while leveraging opportunities.

Recently, the approval of a new minimum wage of ₦70,000 and the operational progress of the Dangote Refinery, have presented opportunities for economic change. Simultaneously, Nigeria’s participation in the African Continental Free Trade Area (AfCFTA) opens doors to expand trade. 

Doubling Nigeria’s GDP by 2030 is a necessity for global competitiveness and achieving this will help in meeting the United Nations Sustainable Development Goals (SDGs) and bringing millions of Nigerians out of poverty.

Understanding Nigeria’s Current Economic Situations

Overview of Current GDP

Nigeria’s economy is mixed and unevenly developed, comprising four key sectors which contribute as follows:

• Oil and Gas: While it contributes just 5.70% to GDP, it accounts for over 90% of export revenues. The Dangote Refinery’s imminent operations seek to reduce reliance on fuel imports and enhance export capacity.
• Agriculture: Contributing 28.65% to GDP, this sector employs a majority of Nigerians but is limited by outdated methods.
• Services: Covering telecoms, banking, and trade, this sector contributes about 53.58% to GDP, with fintech leading in digital financial inclusion.
• Manufacturing: Contributing only 8.21% to GDP, it remains underdeveloped despite its prospect for driving job creation and value addition.

Challenges

• Low Productivity: Particularly in agriculture and manufacturing, worsened by inadequate mechanisation and training.
• Policy and Infrastructure Gaps: Poor roads, erratic electricity supply, and inconsistent regulations deter investors.
• Financial System Issues: Recent changes in digital banking, such as Opay and PalmPay’s increased transfer fees, have made customers flare up with complaints, underlining the need for financial sector optimization.

Opportunities

• Tech and Fintech Growth: Valued at over $27.75 billion, Nigeria’s tech industry is made up of innovative startups attracting global investments. The fintech sector alone attracts over $2 billion in investments.
• Agricultural Modernisation: Leveraging tech-driven solutions to boost productivity and exports.
• AfCFTA Participation: Nigeria is capable of leading in regional trade, particularly by processing raw materials into value-added exports.

To understand how Nigeria can achieve this target, it is useful to look at successful economies that have achieved commendable economic growth. 

Countries like China, India, and Vietnam have shown that focused investments in infrastructure, human capital, and export-oriented policies can lead to huge economic scale-up. 

China, for example, focused on manufacturing, export-driven industries and infrastructure development, while India leveraged its IT sector and human capital, the country also focused on policy reforms. Vietnam, on the other hand, attracted foreign direct investment (FDI) and implemented export-oriented policies, which contributed to its growth. 

Nigeria can replicate these achievements by prioritising infrastructure, policy consistency, and workforce development.

The Pillars of Growth

To realize the goal of doubling its GDP by 2030, Nigeria must focus on several pillars.

Infrastructure Development is necessary for Nigeria’s growth. With over 85 million Nigerians lacking access to reliable electricity, the energy sector needs urgent reform. Industrial productivity is limited without a stable power supply. 

Again, improving transport networks, including roads and rail, is essential to reducing business costs and improving the efficiency of trade. Digital infrastructure, including the rollout of 5G and enhanced broadband penetration, will also help in advancing the tech-driven growth Nigeria needs.

Human Capital Investment is another major area. Education reform, particularly in science, technology, engineering, and mathematics (STEM), along with vocational training, can provide Nigeria’s youth with the skills necessary for the changing job market. 

A healthier population, supported by improvements in the healthcare system, will also contribute to increased productivity. Added to these, engaging the Nigerian diaspora, which sends home about $22 billion annually in remittances, can support investments in innovation, education, and technology.

Diversifying the Economy is essential for reducing Nigeria’s dependence on oil. The country must modernize agriculture through the adoption of technology, mechanisation, and improved irrigation systems. 

Also, boosting the fintech sector, which has already shown strong growth, can drive financial inclusion, while clean energy solutions can promote sustainable development. 

Manufacturing also holds a huge impact, especially if the sector focuses on value-added production, thus reducing import dependence and expanding export capacity.

Policy and Governance Reforms are necessary for creating an environment conducive to growth. Political stability and transparency in governance can bring in more investments, while anti-corruption measures will help secure billions of dollars in funds that have previously been misappropriated. 

Simplifying bureaucratic processes will also be required to attract foreign investments. Regulatory clarity will be necessary for businesses to operate smoothly, particularly in sectors like fintech and e-commerce.

Trade and Export Growth through participation in regional trade agreements such as the African Continental Free Trade Area (AfCFTA) can help expand Nigeria’s markets. In processing raw materials locally for export, Nigeria can increase its export revenues significantly.

Financial System Optimization is important for ensuring that small and medium enterprises (SMEs) have access to funding. Strengthening microfinance institutions and venture capital will provide the necessary capital for businesses to grow. 

At the same time, ensuring that inflation is kept under control and stabilizing the naira will improve the overall investment climate.

Technology and Innovation

Technology, particularly in the areas of fintech and e-commerce, will serve as one of Nigeria’s strongest stimulants for growth. Lagos has already become a leading hub for tech innovation in Africa, attracting investments from global firms. 

Startups in Nigeria are scaling internationally, while innovations in agriculture, healthcare, and education are improving productivity across sectors. The rollout of digital initiatives such as the National Digital Economy Policy and Strategy 2020-2030 will further reorient Nigeria’s economy toward digitalization, enabling it to capture new opportunities in the global digital economy.

Challenges and Mitigation Strategies 

Even with the many opportunities, Nigeria still has several challenges it needs to deal with to double its GDP by 2030. 

Funding gap for large-scale infrastructure projects is a big issue, with an estimated $100 billion needed annually.

Plus, there are risks associated with policy resistance, particularly from entrenched interests that may oppose necessary reforms. 

Global economic conditions, such as fluctuating oil prices and rising interest rates, could also cause risks to Nigeria’s economic stability. However, public-private partnerships, transparent governance, and revenue diversification can mitigate some of these challenges.

The Economic and Social Benefits of Doubling Nigeria’s GDP

Doubling Nigeria’s GDP by 2030 would yield benefits that if well maintained, will build a resilient economy. They include:

• Job Creation: Millions of new jobs across sectors.
• Improved Living Standards: Reduced poverty and higher per capita income.
• Regional Influence: Strengthened leadership in African economic affairs.

Doubling Nigeria’s GDP by 2030 looks like a challenge now, but is possible with collective efforts from the government, private sector, and citizens. 

Being strategic about creating reforms, investing in infrastructure, human capital, and diversifying the economy, will enable Nigeria to gain sustainability and become unshakable. 

The nation’s success tomorrow depends on the decisions and actions taken today, so the time to act is now. Nigeria can achieve sustainable growth and become a strong economy competing globally.

The goal is to support over 70,400 young women and girls who face financial and social limitations to education and building a livelihood.

Through these initiatives, an estimated 3.3 million young women and men are expected to benefit, creating broader opportunities for education and empowerment across the continent.

The Mastercard Foundation will support young women in their pathways through education, entrepreneurship or entering the world of work with an additional $360 million investment over the next seven years.

The investment to CAMFED over the next six years will support the transition of 62,000 girls in Tanzania, Zambia, Zimbabwe, Ghana, and Malawi into secondary and tertiary education, employment, and entrepreneurship while partnering to improve education systems for millions of young people.

The extended seven-year FAWE and Mastercard Foundation partnership will bolster access to tertiary education, post-secondary technical vocational and educational training (TVET), and job opportunities for over 10,500 young people, primarily in Uganda, Rwanda, Zambia, Ethiopia, Malawi, Ghana, Liberia, Tanzania, Zimbabwe, and Senegal. 

The program includes bursaries for participants starting new businesses or innovating within existing businesses. The expanded partnership will increase the number of post-secondary school programs supported by FAWE to over 500 accredited tertiary institutions in Africa, benefiting an estimated 1.2 million young women.

“We’re incredibly proud to deepen our collaboration with CAMFED and FAWE, building on years of shared commitment to supporting girls across Africa to complete their education and gain the skills they need to become transformative changemakers within their communities,” said Tina Muparadzi, Executive Director of Education & Transitions at the Mastercard Foundation.

“Currently contributing just 11 percent of Africa’s GDP, the continent’s young women have huge potential to drive its economic transition. We believe this partnership will be pivotal in establishing the inclusive and equitable environment required to fully unlock this opportunity, enabling the most vulnerable and underserved girls in society to thrive.” 

This partnership expands more than a decade of collaboration between the Mastercard Foundation and CAMFED, which have worked together to improve access to secondary and higher education for over 35,000 young women facing the highest financial and social barriers. It has also created opportunities for a further 35,000 young women to access dignified and fulfilling work.

Reflecting on this continued partnership, Angeline Murimirwa, CEO, CAMFED, said, “CAMFED is thrilled to embark on the next phase of our long-standing collaboration with the Mastercard Foundation. This investment supercharges our ambitious vision for 2030 as we support millions more girls in rural Africa to thrive in secondary school, graduate into secure livelihoods and leadership, and in turn, mentor and support the next generation, multiplying partner investment. 

“With the commitment of every member of our global movement, we can transform education systems and economies across Africa, driving progress towards the Sustainable Development Goals.” 

The Foundation launched its partnership with FAWE in 2013 as part of the Mastercard Foundation Scholars Program. The partnership was established to provide 1,200 secondary education scholarships for girls in Rwanda and 600 girls in Ethiopia. 

Since then, over 70 percent of the Mastercard Foundation Scholars have transitioned into tertiary education, and 300 enterprises have been established through the Mastercard Foundation Scholars Entrepreneurship Fund.

Martha Muhwezi, executive director of FAWE Africa, underscored the importance of continuing this work: “This collaboration reaffirms FAWE’s shared vision with the Foundation’s Young African Works strategy and the Africa Union strategy for employment of the youth. We are particularly thrilled to see this program expand from three countries to 10, a clear testament to its impact and potential. 

“We are confident, with support from partners such as the Foundation, we will scale to reach all our 34 chapters across Africa. Education, skills development, and leadership will remain our priority to prepare the current generation to lead, innovate, and drive positive change across the continent.” 

These partnerships with CAMFED and FAWE will significantly accelerate the Mastercard Foundation’s Young Africa Works strategy, which aims to enable 30 million young Africans, especially girls, to access dignified and fulfilling work by 2030.

According to the 2023 Multidimensional Poverty Index (MPI) released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) at the University of Oxford, some 534 million people live in poverty across the region.

We still fall behind on other developmental indices too. Data from the World Bank shows that nearly half the region’s population doesn’t have access to electricity and, according to the World Economic Forum, just 39% of people in the region have water connected to their homes.

Mobile internet connectivity rates are similarly low, at 40%, according to GMSA. While it’s important that governments and private sector partners across the region work to address those infrastructural challenges, additional action is required too.

It’s equally critical that people, particularly in low-income communities, are given the skills they need to build sustainable jobs and livelihoods.

Doing so is crucial not only to lifting people out of poverty but also to the long-term future of these communities.

A sustainable path out of poverty 

The absolute key word, when it comes to building livelihoods that help people escape poverty, is sustainability.

While initiatives like public works programmes can help provide income boosts, particularly in poorer areas, the work is often temporary. That means that, once a road is repaired, trees are planted, or a park is cleaned up, the work goes away until the next project comes up.

In many cases, these programmes also don’t come with skills development components. That, in turn, means that people are left dependent on these programmes, rather than being able to build sustainable livelihoods for themselves.

Fortunately, it doesn’t have to be that way. The right investments, made in the right ways and the right places, can help create sustainable jobs and develop skills that offer people a sustainable path out of poverty.

In fact, companies across the region are desperate for skilled workers. While more current statistics are difficult to find, it’s telling that a majority of private African companies, according to Statista, reported losing out on revenue because of skills shortages in 2019.

These skills shortages are keenly felt even in the region’s most industrialised economies. In South Africa, for example, the Mail & Guardian reported that there were more than 77,000 jobs available but which couldn’t be filled due to a skills shortage. That’s in addition to the 300,000 jobs that have been outsourced to people who live overseas.

It’s critical, therefore, that investors in the region look at ways of building skills development into their investments.

Inclusive empowerment 

It’s also important to note, however, that it’s also critical to empower and upskill people across the region from an entrepreneurial perspective.

Take East Africa’s boda-boda drivers for example. Along with their motorbikes, these drivers fulfil numerous roles, from acting as single-person taxis to delivery services. From the urban centres in Uganda to the most remote villages, boda bodas are quick, inexpensive, and readily available to get the people where they need to be.

They also provide a huge boost to small business owners who make substantial savings while using boda bodas to transport goods across the country.

For many people struggling to earn a sustainable livelihood, the boda boda business has enabled them to become entrepreneurs and indirectly offers employment opportunities to many others. With properly structured loan investments, these drivers can grow their businesses, and boost their income.

Over time, they may even be able to employ other drivers, which not only aids with job creation but also in boosting local economies.

We’ve witnessed how powerful the right credit-based approach can be with our own portfolio company Watu Credit.

To date, Watu has created over 3,000 direct jobs and has provided over 600,000 loans across seven countries, which have positively impacted the lives of more than 3.6 million people.

Unleashing Africa’s full potential 

Ultimately, what these examples show is how powerful the right approach to African investment can be. By focusing on long-term sustainable job creation and skills development, many more people will be pulled out of poverty, to the benefit of both themselves and the communities they live and work in.

And given the immense potential waiting to be unleashed across the continent, it’s an investment approach that could deliver seriously rich dividends.

[Featured Image Credit]