Nigeria’s consumer market, with its great potential, has attracted significant investment both from private and public sectors in a wide range of industries. One example of this are local and international retailers such as SPAR and Shoprite who has announced plans to open ‘hundreds’ of stores across Nigeria within the next few years. This will exercise pressure for modernization in order to spur the adoption of solutions for effective customer management and efficient service to gain competitive advantages. Parallel with this there is an ongoing development towards increased e-commerce as network infrastructure is improved. With 300,000 online orders being made on daily basis Nigeria’s e-commerce market is valued at around 10 billion USD a year. This increase in e-commerce will be an important demand driver for IT solutions such as transaction processing and online security systems. Financial services, retail, and aviation sectors are therefor expected to ramp up their IT investments to remain competitive.
This development is very much aligned with the governments’ strong will to develop e-services, which constitute opportunities for foreign players since there is deficiency of skilled domestic workforce in these areas. These services include e-government, cloud computing, e-healthcare, e-learning, e-agriculture, e-education, e-commerce, m-payment and services in charge of fighting cybercrime. There is also a growing demand for mobile enabled high-definition video, gaming services and internet based television in the middle-class market segment. Whereas the country may lack domestic skills in the development of e-services, the production of end user devices has remained stable with five PC assembly plants in Nigeria and a total production of 130,000 units, which indicates that 30% of all PCs sold in Nigeria are assembled in the country.
The Nigerian government is spurring the development of a stronger ICT sector by, for example, providing tax incentives and seed capital to ICT startups, a 120% tax deduction for R/D expenses incurred by ICT training companies and 5 years import duty waiver on computer components used for assembly of hardware. Apart from the government’s willingness to invest, there is also an expected increase of IT spending in Nigeria’s telecom sector. The telecom sector has shown strong subscriptions and value growth since the liberalisation of the market in 1999 and telecoms operators are presently the biggest users of BPO services in Nigeria.
Nigeria is still virgin land for IT Sectors. Nigeria and west Central Africa needs lot of integration of Information Technology in their traditional standard operating procedures. Now we are in Era of Automation and Cloud which is making enterprise level operation easy and provide better control. As Nigeria can adopt South Africa and Kenya ICT model to grow its economy which will bring lot of employment to young Nigerians.
By Ajay Tripathi