Tuesday, May 28, 2024

Leveraging on Nigeria’s digital drive to boost economy – By: . .

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Renowned modernization theorist and professor of economics, Walt Whitman Rostow, in the 1960s, postulated that for Africa and third world countries to develop and achieve economic sustainability, they needed to undergo five stages, which are: traditional society, preconditions to take-off, take-off, drive to maturity, and age of high mass consumption.

Every country, according to Rostow, goes through these stages. The traditional society stage is characterized by subsistence farming, a poor monetary system, and a lack of technological innovation. The pre-condition for the take-off stage prepares the stage for growth. The country develops a standardized monetary system, changes the socio-political system, and the investment level grows above five per cent of the national income. At the take-off stage, investment goes from five to 10 per cent concentrated growth, industrialization, and then diversification of the economy occurs. At the drive to maturity stage, there is an improvement in living standards, technological advancement, and economic prosperity. At the last stage, the economy is fully developed with a high level of consumption and mass production.

Even though Nigeria’s economic growth cannot be said to have followed the Rostow stages in its entirety, we can draw valid conclusions from the model in terms of Nigeria’s current economic growth. It can be argued that Nigeria is currently at the take-off stage.

It is not news that Nigeria is the largest economy in Africa. Statistics show that in 2021, Nigeria’s Gross Domestic Product (GDP) was $514.05 billion, well ahead of close contender Egypt with $394.28bn and South Africa in third with a GDP of $329.53bn. The rating largely remains the same in 2022, with Nigeria, Egypt and South Africa leading the top three largest economies in Africa in that order.

It is instructive to note that Nigeria and Egypt share similarities in terms of the quantum of oil production. But aside from being oil producing countries, they are also safe investment destinations. South Africa, however, had an edge as the most technologically advanced, diverse, and industrialized economy on the continent.

Nigeria, like many other African countries with crude, relied so much on oil in the past. But as the world is moving toward cutting down on fossil fuel, so do the majority of the oil-producing nations. In Nigeria, the indicator of the country’s take-off is the digitization of its economy.

As the most populous black nation on earth, Nigeria is blessed with a teaming young population, the majority of whom are tech-inclined. The Nigerian young population provides a perfect opportunity to invest in and enhance its digital economic potential. As Rostow argued, the take-off stage is signified by diversification of the economy, industrialization, and the concentration of institutions and workers around a new industry. Nigeria is currently undergoing a revolution in its digital economy drive. Structures, systems, and processes are being put in place to fast-track digital prosperity in the country.

The ministry of communication was renamed the Federal Ministry of Communication and Digital Economy with the mandate to ensure the smooth transition of the country’s digital economy journey. This has resulted in the development of a digital economic roadmap titled National Digital Economy Policy and Strategy (2020–2030). The National Digital Economy Policy and Strategy focused on eight key areas: developmental regulation, digital literacy and skills, solid infrastructure, service infrastructure, digital services development and promotion; soft infrastructure, digital society and emerging technologies, as well as indigenous content development and adoption. These are in line with the government’s Economic Recovery and Growth Plan.

To this end, the World Bank recommends heavy investment in five critical areas to position the country as a digital economic powerhouse on the continent. These are: digital infrastructure, digital platforms, digital financial services, digital entrepreneurship, and digital skills.

No doubt, beyond policy and tokenism, the digital economy drive is already yielding fruit. The Galaxy Backbone was set up to manage digital operations in the country and digitize governance, cut costs, and maximise profit. The telecommunication and ICT sectors also contributed 13.85 per cent to the GDP in 2019 and 17.92 percent in 2021. Also, there is a decline in the rate of underserved areas from 31 million in 2019 to 28.8 percent in 2021. To improve the quality and broadband penetration, around six submarine cables are on their way to the country, with the most recent being the Google undersea cable.

Abdulhameed Olaitan Ridwanullah writes from the Department of Mass Communication, Skyline University Nigeria, Kano

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