One of such presentations were made by the Head of Economic Development Team, UK Department for International Development (DFID Nigeria), Richard Ough, at the event held at Shehu Musa Yar’Adua centre, Abuja.
1. Ough’s personal story about Nigerians
Back in 2014, my wife and I employed a man called Saidu to drive for us on weekends. Saidu is a lovely guy, honest, hardworking, very capable. One week, Saidu came to us for permission to come late to work on Saturday.
He had a job interview in the morning and it was a great opportunity to nail down a formal sector job. We of course agreed but asked him to come over once the interview was finished. But this turned out to be no ordinary interview. Saidu had gone to Abuja Stadium for the 2014 Nigeria Immigration recruitment process.
I know many of you will remember it. Stadiums across the country had been filled with young job hunters, in over-crowded conditions, and a poorly organised process.
Saidu recounted his experience to us that evening of the stampede he was caught up in. Seeing people trampled to death, and the general indignity of the process.
The photographs that came out showed the sheer numbers of job hunters, desperate for an opportunity. That event shocked the world. Saidu was lucky to escape with his life.
2. Nigeria needs more jobs and it needs better jobs
Every year Nigeria needs to create 2.3 million new jobs, just to meet up with demographic trends1. Most of the jobs Nigeria creates are in the informal sector, limiting the income prospects of those that end up there.
Oil, traditionally seen as the ‘goose that lays the golden egg’ does not create jobs at scale. It is a capital-intensive industry. Oil is great for generating revenues and foreign exchange – but limited use for solving Nigeria’s jobs problem.
3. Nigeria needs diversification and it needs multiple engines of job-creating growth
I believe that innovation can play a key role in this journey, and if we get it right it could be transformational, solving problems that once seemed intractable in Nigeria.
4. Nigeria and the UK are strong Commonwealth partners with a shared interest in developing a prosperous Nigeria
I’m delighted to talk to this theme of innovation and partnership between our two nations. Not only is it a subject I’m very passionate about, but it also featured heavily in our Prime Minister’s visit to Nigeria in August. During this visit there were a number of key announcements made around the UK / Nigeria strategic partnership on innovation and jobs as well as the Prime Minister’s ambition that the UK becomes the number one investor in Africa by 2022.
5. Ten years ago the World Bank first published a report that identified what it termed the ‘binding constraints’ to Nigeria’s economic development
The key barriers they identified are familiar friends: infrastructure (power and roads), access to finance, business environment, and skills.
There has been some important progress made on a number of these areas over the last decade, but not enough to say that these binding constraints have been eased. I suspect that if we re-ran the World Bank’s diagnostics today we might end up with a similar set of constraints, perhaps though with insecurity playing a greater role.
What excites me about innovation and the role of tech in Nigeria is the ability to work around some of these deep-rooted challenges, and there are some great examples of where this is starting to happen.
6. For every deep-rooted barrier to job creating growth in Nigeria, there is a Nigerian entrepreneur thinking about creative and innovative work-arounds.
With tech and innovation, these very challenges become business opportunities. We took the Prime Minister’s Business delegation to Ventures Park- a place I know that you commenced your summit yesterday, and represents exactly this sort of entrepreneurial spirit.
During this visit, we had a tent set-up with 7 of Nigeria’s most innovative businesses showing how they were helping Nigeria to overcome deep- rooted problems.
Farmers cannot get access to finance to fund agricultural inputs? Don’t worry there is a Babban Gona, a Thrive Agric or a FarmCrowdy that can crowd-source financing and provide agricultural extension services. Farmer cannot get funds to buy a tractor? Why buy a tractor when you can hire a tractor for the specific time you need through companies like ‘Hello Tractor’.
This is stuff that already exists and the potential for the future is absolutely mind blowing. Imagine for instance if we could start tapping into the distribution systems for e-commerce platforms to make key inputs for businesses more widely available with greater choice in terms of quality and price. Jumia tell me they can get a fridge freezer delivered to Maiduguri.
Beyond consumer products though, imagine if businesses were able to use these types of distribution systems to access spare parts, or fish feed or whatever else they needed. Suddenly the uncompetitive markets that drive up costs across Nigeria and choke off growth and jobs could be positively disrupted.
On the back of the Ventures Park event our Prime Minister announced the UK providing new UK support to Nigeria which will deliver 100,000 jobs and raise incomes for 3 million Nigerians.
This seven-year DFID programme, called ‘Links’ aims to harness the twin powers of innovation and investment to help create new engines of job creating growth in some of the most deprived urban centres of the country.
Driving down poverty, building on exactly the types of innovative approaches I mentioned earlier.
The Prime- Minister also announced a programme to set-up innovation hubs across Africa, including in Nigeria.
7. Nigeria, and Lagos in particular, is at the forefront of African fintech innovation
The UK is a globally recognised hub of fintech excellence. The opportunities for partnership here are substantial. There is huge innovation and energy of Fintech within Nigeria.
A lot of this energy though is challenged towards overcoming regulatory blockages that constrain growth- this innovation is important but regulations are very much within the gift of the nation, much easier to solve than decades of under-investment in infrastructure. A far better approach would be if the regulator and Fintech industry had a collaborative approach, with Safe Spaces to test out innovation and a regulatory framework that evolved and adapted to meet the new challenges and opportunities the tech presents. If this happened the engine of innovation of the Fintech sector could be channelled into key issues like financial inclusion- 40 million Nigerians remain unbanked limiting their prospects for pathways to prosperity.
There are great lessons to be learnt from the UK’s Financial Conducts Authority’s regulatory sandbox. The Prime Minister announced a new Africa FinTech Partnership to connect UK fintech investors, business mentors and regulators at the Financial Conduct Authority with their Nigerian counterparts– providing both the finance and the expert advice needed to start-up and scale-up.
The UK also announced a new fund to support emerging fintech in Nigeria through its work through EFINA
8. We need to think about how digital access can be improved along with making sure the skill sets can be improved to ensure that tech led growth is inclusive as possible
We are currently exploring ways the UK may be able to help Nigeria on this front too in the future with ideas currently being developed.
9. Finally, I wanted to talk about the importance of innovation going to scale
Transformation in Nigeria’s economy will not happen on the back of one or two innovative apps, it’s about the whole tech ecosystem and ensuring there are pathways for innovative ideas to go to scale and expand.
Kola and his colleagues at Ventures Platform will often talk about the financing Valley of Death where new tech businesses need to go beyond accelerator funding and start needing investment of $500,000 + .
Nigeria needs to expand its financing eco-system for these tech companies. I’ve already seen promising examples. The UK’s CDC has invested in private equity funds such as Synergy Capital, that in turn are supporting many tech companies and putting equity investment to help them grow.
The City of London and the London Stock exchange is continuing to innovate new ways that Nigerian companies can tap into UK financing. This is brilliant, and we need to see more of it happening – it would be amazing to see a supporting tech eco-system emerge in Nigeria in a similar way to what exists in places like Silicon Valley or Shoreditch in London.
There may also be collaborative approaches which see a number of the innovative companies start working closer together both domestically and internationally. For example, if you have three companies working in agri-tech, can they start sharing commercially important information and customers together that can help them grow beyond their current prospects.
It is tough to be a tech-start-up wherever you are in the world, but particularly so in Nigeria.
10. I think back to the Nigeria immigration recruitment scandal and this type of situation cannot be part of Nigeria’s future. I strongly believe that Nigeria’s greatest asset is not the oil in the ground, it is the talent and drive of its people
Through tech and innovation Nigeria has the opportunity to harness this, and channel it in ways that can help overcome traditional challenges to job creating growth. I believe that for tech and innovation of the future there is no better partnership than that of the UK and Nigeria.