Nigeria – The Good, The Bad and The Tech

Africa



Nigeria – The Good, The Bad and The Tech

Nigeria is often referred to as the Giant of Africa, and with good reason. The country has a population of about 173 million, is rich with mineral and human resources, and has been identified as one of the most entrepreneurial countries in the world.

However, despite having the largest economy in Africa, Nigeria’s Bureau of Statistics reports that the country has a 10% unemployment rate in 2016. Economic reforms over the past decade brought about by declining oil revenues and the weakening naira have seen cuts in the civil service, and the economy’s inability to absorb qualified graduates means that and one in five young people in Nigeria are unemployed.

The main driver for entrepreneurship is the lack of formal employment opportunities and a rise in poverty, which has left Nigerians with few other options, so they’re getting it done themselves. Although the situation is made more difficult by a lack of resources, there are organizations such as the Tony Elumelu Foundation and Fate Foundation that are dedicated to promote entrepreneurship through providing access to funds.

Challenging Environment

There are many in Nigeria as well as from outside the country who are looking for untapped opportunities, but there are major challenges as well. One of the major challenges is the lack of reliable electricity supply. Nigeria has the capacity to generate 12,000 megawatts of power, but the country produces only about a quarter of this, less than 3,000 megawatts. Lagos is constantly abuzz with the noise of generators. This is a great cost to consider in doing business as it needs to factored in your pricing.

Another challenge is corruption in both the public and private sectors. It’s hard to do business when everyone demands a bribe everywhere you go. When you’re a foreigner, like myself, people expect things from you, starting at the airport when you arrive. The fact is, it’s hard for businesses to grow when you start having to consider factoring in corruption as a cost of doing business.

Lastly, and in general, Nigeria’s infrastructure from roads to the public health system is underdeveloped, with very little public funding going into this sector over the years. Like providing your own electricity, as a person living in Nigeria you end up having to look to alternative services to those that the government is supposed to provide as a result of underdeveloped infrastructure. There’s a saying among those who live in Nigeria that “the people are their own government” i.e. you supply your own services from electricity to looking for private health facilities.

In order to overcome these challenges, there is need for comprehensive reform. The government needs to do more to remove barriers to business, while at the same time the people need investments to grow these businesses.

Overcoming Challenges

The original entrepreneurial spirit must innovate and take risks. When all goes well and all efforts put in translate to revenue and social change, then they improve the general public’s standard of living.

With the decline in oil prices, Nigeria’s economy is diversifying, with entrepreneurship driving growth and development at the moment. This explains why the government has put an emphasis on the need for Nigerian citizens to acquire vocational skills and start up small businesses instead of relying on the state for assistance.

In an effort to address the economic and social challenges that business people are facing when they start out, the government has introduced a policy for Nigerian universities to provide entrepreneurship education for undergraduates so that they can start their own businesses and create job opportunities for others after graduation.

One factor that has greatly boosted the growth of enterprise in Nigeria is the internet, which has disrupted how business is done. While it has made a number of enterprises irrelevant, the Internet has given rise to new businesses, with young Nigerians venturing into e-commerce, creating smart apps and developing all sorts of digital-focused brands to solve everyday problems while simultaneously generating income for themselves and creating jobs for the masses.

Land of Opportunity

Nigeria’s entrepreneurs are opening up the country to new opportunities that are restructuring and positively disrupt existing markets. To support this ecosystem, incubators and hubs such as the Co-Creation Hub have emerged. CcHub is Nigeria’s first open living lab and pre-incubation space that welcomes entrepreneurs, inventors, technologists, change agents, hackers and impact investors from all over the world to create products and services that help simplify life.

CcHub has positioned itself at the heart of Nigeria’s technology innovation by encouraging the use of technology to promote social accountability and facilitating creative thinking and collaborative problem solving. This space has given birth to many tech startups and ventures like BudgIT, WeCyclers, with the most notable being Andela.
With headquarters in the USA and operations based in Nigeria, Andela was founded in 2014 by Jeremy Johnson, who is currently CEO, Christina Sass who is the COO; Ian Carnevale who is the brand director; and Iyinoluwa Aboyeji, who’s in charge of recruitment.

Andela’s mission company’s mission is to recruit and train talented developers from across Africa and then place them into full-time, outsourced positions. They recently raised $24 million in Series B funding led by the Chan Zuckerberg initiative, whose goal is “to advance human potential and promote equality,” and Andela is doing just that.

In the two years that they have been operational, Andela has trained over 300 highly skilled software developers in Kenya and Nigeria, who have gone on to work remotely for employers ranging from startups to Fortune 500 firms like IBM and Microsoft.

The training is done at Andela’s facilities in Kenya and Nigeria, and the programme is extremely competitive. Only one out of every 100 applicants is accepted for training and job placement.
By recruiting and training promising tech talent across Africa, Andela provides companies around the world with skilled developers, and they ensure that these developers know their stuff by running training programs in-house, and turning recent graduates into IT professionals.

Aboyeji notes that Nigeria is a fantastic place for startups. “Andela is a story of people from all over the world coming to Nigeria to solve a problem,” he said. “This is one of our primary strengths as a company.”

“We live in a world where talent is evenly distributed, but opportunity is not,” Mark Zuckerberg said in a statement announcing the Series B investment, “and Andela’s mission is to close that gap.”

Andela is not the first Nigerian startup to make great leaps. One that also comes to mind is iROKO TV which has not only raised millions of dollars from international VCs such as Kinnevik but it has expanded across the continent and internationally thanks to various distribution deals struck with the likes of France’s Canal+ among others. Although iROKO TV, an online video streaming service for Nollywood (Nigerian) movies, was initially started outside Nigeria by its founder, Jason Njoku, to cater for Nigerians and other Africans in the diaspora, it has now focussed its operations in Nigeria and Africa in a bid to capture market share as Internet infrastructure improves.

Iyaboyeji and Njoku are not the only Nigerian who came from the diaspora and saw the opportunity and potential in doing business in Nigeria, many Nigerians and foreigners, like myself, packed and left for Nigeria to start businesses thanks to the country’s potential.

Venturing Into Nigeria

I first ventured into the Nigerian hotel business with Jovago, a subsidiary of the Africa Internet Group, which enables people to book hotels online. During my time in the country, I got a nickname, ‘Chinedu’, which translates to ‘God leads’ in Igbo, a language from the south of the country.

I left Jovago to start my own project, HotelOga, a service designed to help hotels and others in the hospitality industry in Nigeria to get an online presence for free.

The reason why I thought HotelOga would take off was because the internet presence of hotels in Nigeria and much of Africa is lacking. In other parts of the world, you can literally search for a hotel, get their prices, book a room, and then show up with your reservation details. It’s that straightforward. However, in Nigeria, you have to find the hotel’s contact information, call them, ask if they have rooms available, and they aren’t able to confirm whether you will get a room during the time you want. You will have to show up on the day, pay cash and get your room, which often looks very different from the brochure.

HotelOga is one example of how a well-designed product can create a niche for itself in Nigeria. Similar businesses are using the internet to gain a foothold in the rest of the continent, taking advantage of improved connectivity and a growing middle class that has more money available to spend on holidays and travel, things that were previously considered luxuries.

What remains clear is that Nigeria’s entrepreneurship and startup scene is flourishing, meaning that there are lots of opportunities coming up every day for young Nigerians and enterprising individuals from outside the country. Nigerian society is very accommodating, and they are able to collaborate to make things work, even when the challenges seem insurmountable.

Nigerians are working together to build their country, and there are people from all over the world, like myself, coming in to do what we can to help. This reminds me of an Igbo proverb, Otu onye tuo izu, o gbue ochu, which can be translated into ‘Knowledge is never complete: two heads are better than one.’

The unstable state of the Nigerian economy and devaluation of the Naira may discourage potential business owners to explore entrepreneurship, but Nigerians are transcending this challenge by continuously exploring new financing models to keep their businesses running.

ABOUT THE AUTHOR



Marek Zmysłowski

I build companies outside the First World, so it becomes First.

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