ECONOMY - 10 JUL 2020

The new broadband plan and Nigeria's digital future

The new broadband plan and Nigeria's digital future
A cell tower. Source: USDA via Flickr

“Few inventions have changed society as radically or as rapidly as the internet,” words from the editorial board of the Financial Times in a clarion call to close the world’s digital divide back in May.

Their agenda was to increase the access and usage of digital services such as phone calls, SMS, Whatsapp and other internet-enabled communication platforms. They fear that more than three billion people in developing countries could still be unconnected to digital services by 2023.

Thankfully, Nigeria is part of this conversation, as the government has created a National Broadband Plan that seeks to accelerate the benefits of a digital economy.

The country already has an 83% mobile phone penetration, which translates to an enhanced way of living: communication, access to education, health services, transportation etc. are now easier. 

Research shows that for every 10% increase in mobile penetration, total factor productivity, (a measure of efficiency) increases by 4.2 percentage points in the long run; leading to better economic growth. 

There is, however, room to grow other aspects of digitalisation. Internet penetration in Nigeria is still hovering around 40%.

A better internet access, for instance, can boost economic growth by 7% to 10% says Dr Isa Ali Ibrahim (Pantami), Nigeria’s Minister of Communications and Digital Economy.

Despite the low internet access, the sector contributed about 14% to GDP as at Q3 2019. Matching Kenya’s 87% would not just hasten the country’s pace of advancement; It would boost the entire continents’, considering that one in every four Africans connected to the internet is still in Nigeria. 

 

Nigeria’s 90%, five-year plan

In the new Broadband plan, Nigeria wants to ensure internet penetration reaches 70% and that adequate coverage is available to at least 90% of the population by 2025.  

The plan is for speed to be a minimum of 10 megabits per second (Mbps) in rural areas and 25Mbps in urban areas. It should also be affordable at ₦390 per 1GB of data. For context, an MTN user in 2015 had to fork out ₦4000 to get 1GB of data. From 2018 till date, the average Nigerian spends about  ₦1000 for 1GB broadband mobile data.

There was a similar plan in 2013 which recorded significant strides. However, industry players had mentioned how the absence of a harmonised strategy hindered its effectiveness. Internet services are still limited to 2G, 3G and more recently 4G networks. 

Achieving improved services and an effective execution of the new five-year plan still requires a harmonised strategy between the government and the private sector. 

More importantly, it requires $3.5- $5 billion -almost ₦2 trillion. Money that cannot easily be raised without bringing in private pockets.

 

The youthful pathway for economic growth

While the steps taken by the government to deepen internet penetration are commendable, the youth remains a critical factor that will shape the trajectory of growth in the country in the coming years. 

Research shows that across the world, youth (ages 15–24) are the most connected age group – worldwide. 71% are online compared to 48% of the total population. 

Fortunately, Nigeria doesn’t lack on that front - the median age in the country of over 200 million people is pegged at 18 years. 

Increased efficiency in digital infrastructure will ultimately translate into the growing critical sectors like agriculture, transportation and even education. 

The responsibility should, however, not stop at securing funds for the digital infrastructure to enable this, other barriers to private investment has to reduce.

There ought to be a constant improvement in the ease of doing business and a drive to create partnership incentives for companies. 

For instance, Google’s commitment to CSquared has led to investment in broadband infrastructure projects that aim to "fiberise" the continent and ensure that the most vulnerable have access to the internet.

Kenya has also been able to harness the potential of a productive digital economy to drive its education sector. Companies such as Brck are connecting off-grid schools to the internet through solar-powered routers and tablets. 

The government needs to create a business environment where these types of initiative can thrive.

Historically, Nigeria has not hit the mark on that.

 

Efficient governance

Poor access to government services such as drivers license, international passport and electricity is also part of the motivations for the government’s new plan. Not only would it improve service delivery, but it would also help with revenue management and enable transparency. 

Kenya has shown the importance of this move that drove an expansion of its tax base following a digital-driven data collection and management system. 

The country offers a range of digitised services such as renewing a driving licence, applying for health insurance, registering a business and paying for parking, through its Huduma e-centres.

This has increased the ability to identify, as well as reduce fraud and misuse of public services.  

The East African nation is also taking the lead with e-governance and begun the development of smart cities which utilise Information and Communication Technology (ICT) solutions to improve the provision of a range of public services such as transportation. 

Creating digital skills through a reform of curriculums in schools and encouraging digital entrepreneurs through techno-parks and tech-enabled innovation hubs are highly essential to the kind of economic growth Nigeria needs. 

More importantly, Nigeria will only experience this digital revolution through a deliberate collaboration between the public and private sectors, coupled with a focus on bridging the growing "digital divide." 

The reformed approach to the digital economy would unlock new pathways for rapid economic growth, local content development, innovation and further employment creation. 

 

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Adaobi Oni-Egboma

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