‘Nigeria must address systemic challenges to dominate regional tech ecosystem’

Nkem Nweke has over 15 years of dynamic involvement in the technology sector, and is an advocate for innovation, with expertise in problem framing, design sprints, and product development. Having held diverse roles in both business and technical capacities at renowned organisations such as Hewlett Packard, Dimension Data and recently Microsoft where for almost 10 years, he crossed consulting, sales, strategy and innovation roles with the African Development Centre. In this interview with ADEYEMI ADEPETUN, Nweke captures the state of Nigeria’s tech ecosystem and what needs to be done to ensure more growth and contributions to GDP.

Nigeria’s tech ecosystem is fast emerging, what will you say are the driving factors?
NIGERIA’S tech ecosystem has thrived due to a combination of youthful energy, entrepreneurial spirit, and an increasingly digital population. The country’s demographics work in its favour—over 60 per cent of Nigerians are under 25, and they are digitally savvy. Social media and mobile connectivity have become part of the Nigerian identity. But let’s not forget the significant role of adversity and the prevalent hardship: high unemployment rates force many to innovate as a means of survival; statistics say 80 per cent of people live in multidimensional poverty to the tune of earning about $2 per day. There are a huge number of people at the bottom of the pyramid who sometimes of no fault of theirs are under immense pressure, but the Nigerian spirit interestingly is indomitable and has led to somewhat of a natural crucible for entrepreneurship.
  
This sheer determination leads to success against the odds. Nigerian tech companies like Paystack, Flutterwave, and Andela have emerged as major players not because the environment was conducive, but because they were able to identify opportunities in a chaotic, fragmented system. The country’s infrastructure challenges and lack of policy support from the government have paradoxically bred innovation—look at how mobile payments became the de facto financial infrastructure due to poor banking services so that such challenges are what people see and take the opportunity to step into innovation.

Can we say Nigeria is doing well innovatively when compared to other countries, especially within the region?
Not necessarily. The latest innovation index report doesn’t put any African country on the impact map sadly and there are a few reasons for this. One of which is the number of patents that are registered due to research that’s coming out of institutions and or organizations and the lack of this cannot register formally that competitive innovation is coming out of a country or region. Yes, Nigeria has success stories, but it is a mistake to equate a few unicorns with systemic innovation. Countries like Kenya have built an innovation culture with M-Pesa and continue to push boundaries in fintech. Egypt or Morrocco, with its government-backed startup initiatives, is pulling in more investment than Nigeria. And South Africa’s relatively better infrastructure makes scaling businesses easier.
   
So, while Nigeria may dominate the headlines naturally due to its size and the giant of Africa nomenclature which is a potential, it’s not enough and shows the possibility that so much more can be done as we lag when it comes to creating a sustainable, scalable innovation ecosystem. Now hats off to the young boys and girls, who are doing their utmost best, given the circumstances but a few startup success stories do not necessarily mean we’re doing well as a country—there is a tendency to over-hype every small win. From my perspective, innovation must be sustainable. If you cast your mind to Japan, China, USA you will see a track record of innovation and that’s what we should aspire to.

What are the bases for your answer to question two?
First, the metrics! Countries like Kenya, Morrocco and South Africa are drawing more consistent venture capital and are seen as more stable environments for tech investments. Nigeria often attracts attention, but our political instability and inconsistent regulatory frameworks deter long-term investment. I’m sure you are aware of how many organizations have left Nigeria in a year due to the unfavourable policy, business practices and recent currency fluctuation challenges, with this you can see where investments will flow towards for obvious reasons.

Looking at the ecosystem, where will you say Nigeria’s strength lies innovatively or what should be the country’s focus?
Nigeria’s strength lies in its young people. This is its most potent force with a median age of 19 – 25, there is so much ability and potential to solve hyper-local problems. There is an urgent need to focus on educating our young people. STEM has to be a basic minimum for every child going to school as we live in a world that demands critical thinking, and problem-solving as we enter the 5th industrial revolution which is led by Artificial Intelligence, quantum computing and Gene technology for us to thrive and contribute in this new world, our young people need to come ready and prepared else we risk being slaves to those who know and create! There’s also incredible potential in developing innovations that solve specific local African-specific challenges. This is important as most times, and unknowingly to people, the solutions we engage have come from the Western world and they are not context specific but due to need we continue to use and patronize solutions that are not designed for our environment

What is your assessment of Nigeria’s ICT sector?
Nigeria’s technology sector holds immense potential but remains underutilised and underperforming due to several structural and systemic challenges. On one hand, the sector has demonstrated incredible growth over the past decade, driven by mobile telecommunications, fintech, and e-commerce. Nigeria is home to some of Africa’s most valuable tech companies, and its youth population is highly engaged in the digital economy. However, this promising trajectory is being held back by significant gaps in infrastructure, regulatory inconsistencies, and the absence of a clear national digital strategy.
   
The telecommunications industry has been a major driver of ICT growth, providing millions of Nigerians with access to mobile internet. Yet, despite this progress, the cost and quality of internet services remain a significant barrier. Broadband penetration is still low, especially in rural areas, and many Nigerians cannot afford consistent access to high-speed internet. This digital divide not only limits the reach of innovative tech solutions but also hinders economic inclusion for large segments of the population.
  
Regulation in the ICT sector is another area of concern. The sector is often subject to conflicting policies, with different governmental agencies imposing contradictory regulations on companies. For example, fintech companies have faced hurdles due to overlapping jurisdictions between the Central Bank of Nigeria (CBN) and other financial regulatory bodies. This creates an unpredictable business environment, where startups and established companies alike must navigate a regulatory maze, stifling innovation and growth.
   
Further, Nigeria lacks a coherent national ICT strategy. While individual initiatives like the National Broadband Plan have been introduced, there is no overarching, long-term plan to harness the sector’s full potential. This absence of vision is a missed opportunity, especially considering the role that digital technologies could play in sectors such as agriculture, health, and education. Countries like Rwanda, for instance, have made significant strides by implementing a clear national digital agenda, and Nigeria should follow suit to remain competitive.
    
Another challenge is the sector’s reliance on imported technology and expertise. In the past, companies like Tara Systems and CSA were local companies that led and powered the financial service sector via locally built software solutions but today, the country is awash with foreign OEMs thereby frustrating local growth of technology solutions, hence there is little focus on developing homegrown solutions which will invite not just foreign exchange but technological dominance in the region and beyond.

Stakeholders believe the minister has focused solely on innovation at the expense of other arms of the ICT ecosystem, especially the telecoms. What is your take on this?
So, while innovation is undoubtedly crucial to the future of Nigeria’s digital economy, it cannot be developed in a vacuum. Telecoms remain the foundational infrastructure that supports virtually every other aspect of the ICT sector, from internet connectivity to mobile services. Ignoring or under-investing in this critical sector risks undermining the very innovations the minister seeks to promote.

Innovation without strong telecom infrastructure is like building a skyscraper on an unstable foundation. The telecoms sector in Nigeria still faces significant challenges, such as high operational costs, inconsistent service quality, and a lack of penetration in rural areas. While urban areas may enjoy decent coverage, vast parts of the country remain under-served or entirely disconnected. For Nigeria to truly embrace digital transformation, these issues must be addressed. Without reliable telecom services, innovations in areas like fintech, e-commerce, and digital health will struggle to reach their full potential.
     
I also feel that the telecoms sector itself is ripe for innovation. Today, telecom firms are pushing disruptive technologies such as 5G deployment, fibre-optic expansion, and satellite internet services for remote areas. These advances would not only improve the telecom infrastructure but also create new opportunities for startups and established companies alike.
     
The minister’s focus on innovation also risks creating a fragmented ICT landscape, where cutting-edge technologies are developed but cannot scale due to basic infrastructural deficiencies. For example, Nigeria’s broadband penetration remains well below the global average, and until this is rectified, even the most promising innovations will be limited in their reach. The emphasis should be on creating a holistic ICT ecosystem that addresses both foundational needs and future-facing innovation.
     
Moreover, innovation should not be limited to startups and digital services. Telecom companies themselves should be incentivised to innovate, perhaps through regulatory reforms or public-private partnerships that encourage the deployment of new technologies. A thriving telecom sector would support not just innovation in other industries, but also the broader economic growth of the country.
   
So, while innovation is critical, it cannot come at the expense of telecom infrastructure. The government must adopt a balanced approach that ensures the growth of foundational industries like telecoms, while also promoting cutting-edge innovations as only then can Nigeria’s ICT sector reach its full potential.

Who should lead Nigeria’s transformation journey, the government or the private sector?
This is an interesting one but thinking through, I feel that the private sector should take the lead in Nigeria’s transformative journey, with the government acting as a key and pivotal enabler. The private sector thrives on innovation, competition, and agility, all of which are essential for driving a fast-paced technological transformation. The truth is that technology moves faster than policy and it’s been proven over and over that governments, by their very nature, are slower to move are hindered by bureaucracy, and are often more concerned with political interests rather than economic growth or innovation.
  
The private sector has already shown its capability to drive change, evidenced by the tech boom across Nigeria. Companies in fintech, e-commerce, and agriculture have rapidly evolved, solving critical problems and bringing new opportunities to previously underserved populations. However, their efforts are often stymied or hampered by poor infrastructure, inconsistent policies, and a lack of basic governmental support. It’s essential therefore to recognize that for the private sector to lead effectively, the government needs to provide the foundation—a stable power supply, consistent policy frameworks, and a regulatory environment that is not hostile to innovation.
   
However, it would be naive to suggest that the private sector can achieve everything on its own. The government’s role as a facilitator is crucial. For instance, governments can introduce public-private partnerships (PPPs) that drive large-scale infrastructural projects and digital literacy campaigns. These are areas where the private sector may lack the motivation or resources to invest without government intervention. Take, for example, the need for a nationwide broadband infrastructure; while telecom companies could drive this, it requires government collaboration to ensure accessibility across rural and urban areas.

Looking at the startup ecosystem, how can Nigeria become a powerhouse within the region?
By our sheer size and human resource spread, Nigeria is already a powerhouse but to dominate the region in the startup ecosystem, we need to address several critical structural challenges. The first is infrastructure because, without a reliable power grid, efficient transportation systems, and accessible Internet, startups face uphill battles in scaling their operations. Infrastructure is the backbone of any thriving tech ecosystem, and Nigeria’s current deficiencies in power outages and internet connectivity are one of the largest obstacles to its development.
   
The second is access to funding. I would be fair to say that Nigeria has seen some high-profile funding rounds, the reality is that these are exceptions rather than the norm. Many startups still struggle to raise early-stage capital, and Nigeria lacks a robust venture capital culture, especially from a local perspective. I think that while we embrace capital from outside which is great and has a good flow, we need to build a culture of investing in our solutions to solve our problems. It’s also important to note that existing funding mechanisms are often short-term focused, looking for quick exits or immediate returns. What Nigeria needs is an ecosystem of long-term funding that understands that true innovation and scaling require time. This is where government incentives or policy shifts could help attract more long-term investors willing to commit to Nigerian startups.
    
Another crucial factor is talent development. While Nigeria has an abundance of young, eager talent, there is a significant skills gap when it comes to advanced technology and business acumen. Many Nigerian startups find it difficult to hire qualified engineers, data scientists, or experienced executives. To become a powerhouse, Nigeria must invest heavily in upskilling its population through educational reforms, vocational training, and partnerships with international institutions. Developing tech hubs and innovation centres that focus on grooming the next generation of entrepreneurs and developers is also crucial.
   
The regulatory environment is also a significant barrier. In Nigeria, the rules governing startups are often inconsistent or poorly enforced. Startups in Nigeria must navigate a maze of unclear regulations, especially in sectors like fintech or e-commerce. To foster a conducive environment, the government should create a startup-friendly regulatory framework that is transparent, consistent, and supportive of innovation. Regulation must be adaptive, allowing startups the flexibility to experiment and iterate without being overly penalized.
   
To become a powerhouse, Nigeria needs to address these key issues: infrastructure, funding, talent development, and regulatory support. It is a multifaceted challenge, but if Nigeria can tackle these areas head-on, its startup ecosystem can rival that of any country in the region.
 
Startups in countries including Egypt, Kenya, and South Africa are raising significant funding more than Nigeria. What is the challenge with our ecosystem?
The challenge with Nigeria’s startup ecosystem, especially when compared to Egypt, Kenya, or South Africa, stems from several deep-rooted issues. One of the most pressing concerns is infrastructure. Egypt and South Africa, for example, have more stable electricity, transportation systems, and broadband infrastructure. This stability allows startups to focus on innovation rather than firefighting operational issues. In contrast, Nigerian startups often face debilitating power outages, poor internet connectivity, and logistical challenges that make scaling more difficult. Investors are naturally more inclined to invest in environments where operations can run smoothly without constant external disruptions.

Political and economic instability in Nigeria also plays a significant role. Investors are cautious about pouring money into a country where the political landscape can shift abruptly, or where economic downturns can result in sudden currency devaluations. The security situation in parts of the country, particularly in the north, further exacerbates this risk. Countries like Egypt and Kenya have their challenges, but they offer more political stability and predictable economic conditions, which are crucial factors in attracting significant venture capital.
   
In essence, Nigeria’s startup ecosystem is hampered by poor infrastructure, regulatory uncertainty, risk-averse investors, and political instability. Addressing these issues will require coordinated efforts between the private sector and government to build a more stable, supportive environment that can attract the level of investment seen in other leading African countries.

Do you think the Startup Act can sufficiently reposition the ecosystem?
The Startup Act was a great work championed by Oswald Guobadia and his team and this is a positive step toward repositioning Nigeria’s tech ecosystem, but it is not a panacea. Legislation is just one part of a much larger puzzle, and while it creates a framework for fostering innovation, its impact will depend heavily on how well it is implemented and supported by other crucial elements such as infrastructure, talent, and regulatory consistency.
  
One of the key benefits of the Startup Act is that it provides much-needed clarity on issues like company registration, tax incentives, and intellectual property protection, all of which are essential for startups to operate in a more formalized, secure environment. In the past, Nigerian entrepreneurs have often struggled with the ambiguity surrounding business registration processes or faced crippling tax burdens that stifled growth. The Act addresses some of these concerns by simplifying procedures and providing tax breaks, which is a welcome relief for startups operating on tight margins.

How do you think regulations and policies can aid innovation, especially for a country like Nigeria?
Regulations and policies, when crafted thoughtfully, can serve as powerful enabler of and for innovation, particularly in a developing country like Nigeria. However, the key lies in creating a regulatory environment that is flexible, transparent, and supportive rather than restrictive. Nigeria’s regulatory landscape has historically been one of the largest obstacles to innovation, with inconsistent policies, bureaucratic red tape, and conflicting interests among various governmental agencies.

For regulations to aid innovation, they must first provide clarity and predictability. Entrepreneurs and businesses need to operate in an environment where the rules are clear, stable, and consistently applied. In Nigeria, regulatory ambiguity often discourages both local startups and international investors. For example, fintech companies have faced challenges due to unclear rules from the Central Bank, which has stifled growth in an otherwise thriving sector. Its worthy of not that clear, well-communicated regulation would allow startups to focus on building their products and scaling their operations, rather than constantly worrying about regulatory hurdles.

Flexibility is another critical aspect of innovation-friendly regulation. Technology is evolving at a rapid pace, and traditional regulatory frameworks often struggle to keep up. In sectors like artificial intelligence, fintech, or digital health, it is essential to have adaptive policies that can evolve alongside technological advancements. A regulatory sandbox approach, where startups can test their products in a controlled environment without fear of immediate regulatory reprisals, is one way to achieve this. This model has been successfully used in countries like the UK and Singapore and could be highly beneficial in Nigeria as well.

Moreover, regulations should be designed to foster competition and protect intellectual property. Startups thrive in competitive environments, and Nigeria must ensure that its regulatory framework does not favor established players at the expense of new entrants. Policies that support fair competition, such as anti-monopoly laws or measures to prevent market consolidation, will help create a level playing field for smaller companies.

Intellectual property protection is another area where regulation can aid innovation. Nigerian entrepreneurs often struggle with inadequate IP laws that make it difficult to protect their inventions and ideas. Strengthening these laws and ensuring that they are enforceable will give innovators the confidence to bring new products to market, knowing that their intellectual property is secure.

Finally, regulation must be seen as a partnership between the government and the private sector. Regulators should work closely with the tech community to understand the needs and challenges of the industry, ensuring that policies are not only well-intentioned but also practically effective. A collaborative approach, rather than an adversarial one, will help build trust and create a more conducive environment for innovation.

Repositioning the ICT sector going forward, what should be the focus of the country?
Repositioning Nigeria’s ICT sector requires a multifaceted approach, but the primary focus should be on these three core areas: infrastructure, human capital development, and regulatory reform. These pillars are essential for creating a sustainable and competitive ICT ecosystem that can drive the country’s economic transformation in the years to come.

First and foremost, Nigeria must prioritize the development of its digital infrastructure. This includes expanding broadband access, improving mobile network coverage, and ensuring reliable electricity supply. Currently, Nigeria’s ICT infrastructure lags behind regional leaders like Kenya and South Africa, limiting the potential for digital innovations to scale. A strong digital infrastructure is the backbone of any ICT sector, enabling businesses, startups, and consumers to engage with the digital economy seamlessly. The government should work closely with private sector players to encourage investments in infrastructure projects, particularly in underserved rural areas.

Human capital development is another critical focus area. Nigeria has a large, young population that is eager to participate in the digital economy, but the country faces a significant skills gap. Many Nigerian universities are not equipped to teach the advanced technical skills required in the ICT industry, such as software development, data science, and artificial intelligence. To reposition the ICT sector, Nigeria must invest heavily in vocational training programs as everyone doesn’t need to go through the university system and there should be a pathway for sundry skilled work.

Regulatory reform is the third essential area of focus. Nigeria’s ICT sector is often hampered by inconsistent policies and regulatory uncertainty. The government must streamline the regulatory environment, making it more transparent and predictable for businesses and investors. For example, fintech companies have faced significant challenges due to overlapping regulatory bodies and unclear rules. A coherent, adaptive regulatory framework will not only encourage innovation but also attract foreign direct investment into the ICT sector.

In addition to these core areas, Nigeria should focus on fostering a culture of innovation and entrepreneurship. This can be achieved by creating innovation hubs, providing tax incentives for startups, and encouraging public-private partnerships. Governments in countries like Israel and Singapore have successfully positioned their ICT sectors by fostering such ecosystems, and Nigeria can learn from their models.