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Despite challenges, tech businesses in Nigeria plan local expansion

By Adeyemi Adepetun
07 December 2022   |   5:55 am
Despite various challenges confronting the Nigerian economy, businesses are planning local expansion. This was contained in the Equinix 2022 Global Tech Trends Survey, where 100 business leaders in Nigeria were interviewed about the opportunities...

• 58% of IT decision makers in Nigeria rue shortage of tech skilled personnel
• Supply chain, cyber security and recruitment challenges confront businesses

Despite various challenges confronting the Nigerian economy, businesses are planning local expansion. This was contained in the Equinix 2022 Global Tech Trends Survey, where 100 business leaders in Nigeria were interviewed about the opportunities and challenges their organisations are facing – and their plans for the future.

As Equinix’s survey data highlights, there are huge opportunities for Nigeria’s businesses to successfully expand into new markets and reach new customers.

The survey in Nigeria revealed that 54 per cent of respondents are planning on expanding in an existing country in the next 12 months, 34 per cent into a new region and 33 per cent into a new country. It pointed out that 93 per cent of IT leaders in Nigeria said enhancing customer experience is a priority.

However, a number of potentially limiting factors were identified by businesses when it came to global growth, including concerns and challenges in supply chain, cyber security, and staff retention and recruitment.

The identified challenges include, supply chain gaps, cyber security, staff retention, tools to grow business, among others. On the challenge of staff retention, Equinix, which acquired earlier in the year, noted that despite having one of the youngest populations and workforces in the world, 58 per cent of IT decision makers in Nigeria view a shortage of personnel with IT skills as one of the main threats to their business.

The survey showed that among the most common concerns for businesses in Nigeria are candidates with the wrong skill sets applying for jobs (56 per cent), pay and compensation (49 per cent), changing expectations around ways of working (41 per cent), and the retention of current talent (38 per cent).

Additionally, in Nigeria, Equinix said the most in-demand tech employees are those with skills in areas such as AI/machine learning, data analysis, cloud computing specialists, data protection, security software development, IT technicians and security analysis.

Speaking on supply chain challenges, the report observed that 55 per cent of respondents said their businesses were plagued by global supply chain issues and shortages, while 50 per cent specified the global microchip shortage as a threat to their business.

On cyber security, Equinix said there are huge concerns around it in Nigeria. According to it, ensuring expansions are supported by resilient digital models is business-critical, particularly at a time of increasing volatility and emerging global threats.

“As part of their digital-first strategies, 85 per cent of respondents in Nigeria confirmed a key priority is improving cybersecurity. 88 per cent said complying with local market data regulations is critical, while 85 per cent highlighted the need to futureproof their businesses. According to IT specialists in Nigeria, the most feared threats were cyber attacks (73 per cent), security breaches and data leaks (68 per cent),” it stated.

To help grow their businesses, 77 per cent of IT leaders in Nigeria said they plan to move more business functions to the cloud including business-critical applications and security functions.

Equinix revealed that hybrid cloud models were the preferred approach for 36 per cent of respondents in Nigeria, although 18 per cent still rely on a single cloud provider and two per cent not using the cloud at all.

It pointed out that 40 per cent in Nigeria said they plan to facilitate global expansion plans by deploying virtually via the cloud, with over a quarter (26 per cent) – 21 per cent among IT decision-makers in Nigeria – doing so using a bare metal solution.

Meanwhile, 47 per cent globally (46 per cent in Nigeria) said they expect increased spending on carrier-neutral colocation solutions to facilitate the planned rise in digital deployments, while even more (59 per cent at global level, 70 per cent in Nigeria) said they intend to increase investment in interconnection services as they plan to progress digital transformation and build resilience.

Businesses also rued the impact of COVID-19. Equinix noted that the pandemic also continues to have a significant impact on businesses’ digital strategies. It stressed that more than half of IT leaders in Nigeria (64 per cent) said they are accelerating their company’s digital evolution because of the COVID-19 crisis.

Indeed, over half (64 per cent) confirm their IT budgets have increased as a direct outcome of its legacy—an insight into the now broadly acknowledged necessity for robust digital infrastructure to pivot to evolving business needs in an instant.

Commenting, Managing Director, MainOne, An Equinix Company, Funke Opeke, said: “The acceleration in digital transformation in Nigeria reinforces the need for businesses to have access to single points to interconnect locally. Increased speed of connectivity, increased flexibility of connectivity, and reduced cost of connectivity were identified by IT decision-makers in Nigeria as the most beneficial aspects of interconnection. MainOne provides a rich interconnection ecosystem that allows customers connect to each other multiple telecoms networks, and Cloud, Payment and Content Providers in a single location.’’