Jan. 29, 2022
Nigeria provides a good example of digital solutions tackling hitherto insoluble problems. Across the economy ICT is the fuel of the myriad startups working to end participation shortfalls and traditional resistance to innovation. The country remains an appealing address for IT investors due to these shortfalls, but also for its talent pool, and increasingly tech-savvy population of around 200 million. Nigeria's telecoms sector boasts the biggest subscription rate of any sector, on which vital fintechs piggyback their services. Today, social media is a key platform for businesses to brand building and talk to the consumer. Notably then, Nigeria's recent suspension of Twitter for flagging comments by the President was criticized as unwise censorship of technology.
The IT Crowd
From entertainment to retail, education and healthcare, IT is honig the Nigerian consumer of tomorrow. The achievement of this task falls increasingly to the startup. Examples touch every corner of the economy, too, and Lagos, a hub for the tech investor, has already claimed the monicker of Africa's Silicon Valley for its potential to tap skillsets, chase a return on investment and achieve scalability. A magnet for seed-capital it continues to turn promising ideas into commercially viable services.
In January through the UK-Nigeria Tech Hub the UK government launched the iNOVO Accelerator Programme for 10 early-stage startups; a springboard for innovative solutions that address the challenges of the pandemic in the three sectors of education, agriculture and health. These 10 startups, mentored by investors, receive the potential for scale. Startups are also standing on the shoulders of established enterprises, an example from the online retail arena being Supermarket.ng. Its directors hailed from the country's preeminent online retailer Jumia Nigeria, itself backed by Rocket Internet GmbH, the world's biggest internet startup conglomerate.
Outside Peering In
Financial inclusion is essential to economic growth, and Nigeria's National Financial Inclusion Strategy (NFIS) of 2012 was a Central Bank of Nigeria (CBN) that targeted 80% of the adult population being financially included by end-2020. Yet, the banked population has actually seen fluctuations over the intervening years, declining from 60.3% in 2012 to 58.4% in 2016, for example. Over half of adult citizens remain excluded. Enter fintechs to fill the gap. This is a continent-wide reality, and data for 2020 confirms that fintechs claimed over 25% of the roughly USD1.5 billion raised by African startups. Recent local notables are Flutterwave, which offers payment solutions for businesses, and which garnered an investment of USD170 million from a foreign consortium. Paystack, delivering the same, as well as customer analytics, secured USD200 million from established US payments business Stripe. Both today are 'unicorn' enterprises, with a valuation north of USD1 billion; hence, theoretically more valuable than most of Nigeria's conventional banks.
(F)IT for Business
IT continues to make diagnosis and treatment more accessible. The COVID-19 pandemic prompted more than the quest for vaccines, with the need for telemedicine prompting greater investment in African healthtech startups. The Techpoint Africa Nigerian Startup Funding Report 2020 points out that the healthtech sector raised USD32.5 million in seven deals last year marking a 404% YoY rise.
Digital healthcare provider CribMD, established in 2020 to inculcate the idea of preventative medicine, recently raised USD2.6 million in seed investment. According to co-founder and CEO Ifeanyi Ossai, “CribMD brings doctors and medicines to people's home, and we are building a comprehensive care system that aligns incentives so when you're well, we all benefit." With a service that spans family medicine, gynecology, endocrinology, cardiology, optometry, pediatrics, and general practice, a basic plan starts at USD7.3 per month, while the premium rises to USD12, and the family plan to USD46. With close to 3,000 patients currently on its books, it has a waiting list of 50,000 people.
Agriculture accounts for around 25% of Nigeria's GDP, and IT seeks to address persistent inefficiencies. Resistance to new techniques and the lack of finance have curbed many small-holders from maximizing on their potential. These account for 80 percent of local food supply. Tech providers in this vital sector have therefore looked beyond just providing funds without targets. In an interview Toyosi Ayodele, the founder and CEO of agtech platform Agrorite explained how his firm also renders advisory services and market access. “The major opportunity for us here is to drive technology, increase collaboration in the tech, financial, warehousing, logistics, freight, and off-taking space." The platform today targets doubling its clients to 250,000. “We provide insurance for farming activities, as well as health insurance, and make sure they are financially included and even able to make investments," he added.
Just as electricity revolutionized the industrial era, IT today is no longer optional in closing social gaps and advancing Nigeria's social wellbeing and economic performance.