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Positioning Nigeria’s digital ecosystem for growth


Uzoma Dozie, Group Chief Executive of Diamond Bank Plc

The digital economy is the worldwide network of economic activities enabled by information and communications technologies (ICT). It can also be defined more simply as an economy based on digital technologies.

Multiple definitions for the term exist, with variations in what should be included in this new economic paradigm. There are several key components that enable the digital economy. There’s the technology infrastructure itself – the hardware, software and networks. There are the digital processes by which business happens, in other words, the e-business component.

Another key component is e-commerce, the digital transactions through which customers buy and obtain products and services from organisations.


One key infrastructure that has been fuelling this change has been the Internet. Recent statistics published by the Nigerian Communications Commission (NCC), highlighted a greater diffusion of Internet technology in Nigeria, signified by a sharp increase in the use of mobile, which has risen to 91.6 million in 2016.

The report also stated that Nigeria’s Internet penetration percentage now stands at 51 per cent. The foregoing outlook presents an auspicious landscape for digital businesses.

Against this background, thought leaders across Banking, Payments, Health and Retail converged at the “Interswitch Connect 2017” Conference tagged “Digital Transformation Imperatives: Innovative Evolution or Disruptive Innovation?,” in Lagos, to discuss way forward for Nigeria’s digital ecoystem.

Tagged Interswitch Connect, the conference examined how businesses can leverage digital transformation for future industry growth, shining light on an ecosystem that has become an inroad into a vast landscape of financial, commercial, and social opportunities.

Founder/Group Managing Director, Interswitch, Mitchell Elegbe, said: “It was essential for us to bring together key stakeholders in Nigeria’s digital financial ecosystem to discuss, debate and evaluate the future of transactions. Digital disruption is a reality that has come to stay; it is redefining industries and business models.  We believe it is time for Africa and Nigeria, to understand how we will evolve and innovate in payments, commerce and beyond. Technology is constantly changing the way we all transact today and we cannot ignore it.”

Impact of Technology   
Indeed, as technologies evolve, customer taste and lifestyles also changed, prompting the development of technology solutions that will meet customers’ needs and lifestyles, as they relate to financial transactions.

Corroborating this view in his keynote address, one of the speakers, Brett King, an Australian entrepreneur and author, who co-founded a New York mobile banking company called Moven, and published several books, and nicknamed the ‘King of Disruptions,” gave analogy of new technology trends that are shaping the entire globe.


King said technology would rule the world and develop more robots that would take the jobs of humans. He focused more on artificial intelligence (AI) in technology evolution, and explained that given the rate of technology growth, Africa and the entire globe would soon be ruled by AI applications.

He advised all sectors, especially the banking sector, to be prepared to embrace the disruptive innovation that would come with artificial intelligence.

King posited that financial transactions have moved from Bank 1.0, 2.0, 3.0, to 4.0, and advised banks to adapt to the changes through collaboration with FinTech, or lose their bank customers to FinTech players that are already creating apps that enhance banking transactions.

Founder, CWG Plc, Austin Okere, an Entrepreneur in Residence at the Columbia Business School, New York, who spoke on regulation as an aftermath of the emergence of technology disruptions, said: “The world is tilting towards digital currency, a situation where banks will no longer be custodian of physical cash, and this calls for a new regulatory framework that will enable FinTech thrive in the financial sector.”

The Chief Executive of Officer, Diamond Bank, Uzoma Dozie, was of the opinion that the traditional method of banking acquired from the western world, are becoming too expensive to the banks, owing to the increased size of bank customers, and that the new wave of banking is digital.

He therefore, admitted that banks must coexist with FinTech to provide more efficient and cost-saving services to bank customers.

To a Sterling Bank Director, Dr. Omolara Ololade Akanji, in her presentation titled: “Breaking Down Barriers: Unlocking Africa’s Economic Potential Through Digitisation,” digital platforms enables cross-border trade and exchange.

Akanji noted that digital technologies are remarkably accelerating globalisation through the creation of online platforms that facilitate cross-border exchanges of goods, services, money, and even labour. She stressed that cross-border transactions were traditionally conducted only in large volumes by large companies and other organisations, such as governments.

“Today, the Internet effectively enables a broad range of ‘micro’flows including individual purchases of a good, or micro-loans and micro-payments, and even micro-work through individual freelance contracts,” she stated.

Economic role of Digitisation
Akanji said Booz & Company’s analysis revealed that an increase of 10 per cent in a country’s digitisation score fuels a 0.75 per cent growth in its GDP per capita. Accordingly, in 2011, East Asia, Western Europe, and Latin America received the greatest total GDP per capita impact from digitisation, surpassing North America.


She said the impact of digitisation improvements in East Asia, and Latin America, was higher than that in North America, and Western Europe, even though these regions have lower gross domestic product (GDP) impact co-efficient. This is because the economies in East Asia, and Latin America are still at the transitional stage and were able to achieve the biggest digitisation leaps. Eastern Europe, and Africa benefited the least from their digitisation gains in terms of their impact on GDP.

According to her, digitisation creates jobs, with a 10 point increase in the digitisation score leading to a 1.02 per cent drop in the unemployment rate.

She informed that by contrast, digitisation has more significant employment effects in emerging markets for three main reasons, which are the digitisation gain in some emerging regions is higher than it is in the advanced.

Secondly, some of these regions have large populations, which mean that a marginal improvement in the unemployment rate leads to a significant number of jobs, and finally, off-shoring grows in tandem with digitisation.

She disclosed that as companies in digitally advanced countries improve their productivity thanks to digitization, they transfer jobs to digitally emerging countries.

Policymakers’ influence
To better channel the outcome of digitisation, policymakers need to plan for how they digitise specific sectors, and encourage the development of capabilities, and economic enablers to help achieve maximum impact.

According to Dr. Akanji, policymakers should shape the impact of digitisation by becoming digital market makers. She said they will need to do more than set policy and regulations. Instead, they will have to encourage digital activities that benefit companies and society.


She said that in designing sector digitisation plans, policymakers, need to develop competitive advantage, and generate jobs in sectors that are already critical to the national economy.

“Policymakers have to comprehend the trade-offs that occur between productivity increases and employment, and take steps to mitigate any potential loss of jobs.”

She argued further that policymakers should foster the development of capabilities and enablers necessary to achieve these digitisation plans, while urging governments to decide whether they want to be developers, financiers, or facilitators of digital capabilities, a choice that they can only make if they understand the ICT ecosystem’s multiple layers.

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