There are several opportunities inherent in Google’s investment in Nigeria’s digital economy, as internet connectivity turns the world into a global village. What are the accruable benefits?
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Global internet technology giants, Google has revealed at a recent Google for Africa event that it plans to invest $1 billion over the next five years to support digital transformation in African countries. The company added that this investment would lead to a 21 per cent drop in internet prices, and a five-fold increase in internet speed in Nigeria. Managing Director for Google in Africa, Nitin Gajria enthused that Google remains committed to being helpful to African people and businesses and building global infrastructure to help bring everyone online. This includes Equiano, a state-of-the-art subsea cable that will connect Africa with Europe. He stated that they were making tremendous progress on the construction of branches landing in Nigeria, Namibia, St Helena, and South Africa. Named after Olaudah Equiano, a Nigerian-born writer and abolitionist, Equiano will provide bigger network capacity to serve Africa. He added that between 2022 to 2025, Equiano would indirectly create 1.7 million jobs in Nigeria and South Africa because of the expansion of the digital economy and related sectors.
These investments will support the continent’s digital transformation in five key areas: It will enable affordable access for every kind of African user, it will help businesses with their digital transformation, it will offer increased funding of entrepreneurs to spur next-generation technologies, it will also support non-profits organisations working to improve lives across Africa and most importantly, it will speed up the Digital Economy for Africa (DE4A) initiative of the African Union, which aims to digitally connect every person, business and government in Africa by 2030.
The announcement expands Google’s ongoing support for Africa’s digital transformation and entrepreneurship. In 2017, Google launched its Grow with Google initiative with a commitment to train 10 million young Africans and small businesses in digital skills. To date, Google has trained over six million people across 25 African countries, with over 60 per cent of participants experiencing growth in their career and business as a result. Google has also supported more than 50 non-profits across Africa with over $16 million of investment, and enabled hundreds of millions of Africans to access internet services for the first time through the provision of affordable Android devices.
Furthermore, the company has also been contributing to technology development in the continent through its Google for Start-ups Accelerator Africa program and the Black Founders Fund. In the past four years, the accelerator programme has supported more than 80 start-ups in seed to Series A stages, providing equity-free mentorship and resources. Google for Start-ups Accelerator Africa has accepted companies like Twiga, Paystack and Piggyvest and collectively, these 80+ start-ups have raised over $100 million in venture capital. On the other hand, the Black Founders Fund gives non-dilutive cash awards to black-led start-ups in three regions. In the U.S, the Black Founders Fund operates a $5 million fund; in Africa, a $3 million fund; and in Europe, a $2 million fund.
Google has also rolled out a special credit facility in collaboration with a not-for-profit organisation named Kiva, which is US-based but fully operational in Africa and Asia. The programme will see Google providing $10 million in low interest loans to help small businesses and entrepreneurs in Ghana, Kenya, Nigeria and South Africa so they can get through the economic challenges occasioned by the COVID-19 pandemic.
Additionally, $50 million dollars was committed to developing tech and entrepreneurial start-ups and so far, 50 start-ups have been selected to participate in the Africa program which started on October 13, 2021. Each will receive up to $100,000 in equity-free capital along with credits from Google Cloud, Google.org, Ads Grants and additional support. Of the 50 start-ups, Google says 40 per cent are women-led, and was selected from an initial pool of nine countries and 12 entrepreneurial sub-sectors. The company said that the development fund would be allocated in a way to carry along all the countries in Africa.
The Nigerian young population is full of many budding entrepreneurs who are in dire need of capital inflow to take their business ideas to the next level, and it also boasts of an array of underground vibrant innovators who have consistently shown their prodigious talents in creating something wondrous out of scrap and basic household items as publicised in several BBC-Africa broadcast features, science-expo programmes and exhibition fairs organised by the Federal Ministry of Science and Technology from time to time. The ministry will do well to take optimal advantage of this window of opportunity to attract investments into its activities while also securing robust entrepreneurial support and tech grants to help this pool of talented creators.
The initiative for broader internet access is well-timed as internet connectivity and reach has been a problem in Africa where less than a third of the continent’s 1.3 billion people are connected to broadband, according to data by the World Bank. More data from internetworldstats, a global website for internet usage and population statistics revealed that as at January 2021, Nigeria has an approximate 154 million internet users, the highest number in the African continent which is estimated to grow by 10 per cent in 2026. Egypt in second place has 54 million users, Kenya in third with 46 million users, while South Africa and Morocco complete the top five with 34 million and 25 million users, respectively.
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In Africa, mobile technology has evolved rapidly, but same has not happened to internet access. Despite the internet development in Africa which has made great progress since the outset of the new millennium, the traditional challenges such as environmental inhibitions, cultural biases, economic realities, government policies and regulations have done little to expedite the growth as expected. By December 2020, the World Bank data showed that internet penetration in Africa was around 30 per cent, which significantly pales in comparison to other continents; North America boasts of 81 per cent, Europe has 78 per cent, South America is at 47 per cent, Asia parades 73 per cent and Oceania has 63 per cent reach. The internet rate in Africa is limited by a lower penetration rate; with parameters such as number of Internet service provider subscriptions, overall number of hosts, Internet exchange point traffic, and bandwidth indicating that Africa is far behind the digital divide. More alarming is the fact that on an average, only one in 10 African households is connected to the internet. The ability to produce software, applications and tools is not developed enough because there is a lack of critical mass that incorporates knowledge. Most African countries produce very few professionals and there are minimal tech investment strategies and infrastructure. There is a growing concern that Africa is not changing as fast as the rest of the world and the gulf is widening. Until 2005, the only way to connect to the world from Africa were through satellite connections, which were very expensive and low in capacity. The new submarine connections led to a remarkable increase in data transmission and significantly reduced the transmission cost and time. Today, there are more than 16 submarine cables linking Africa to other continents and internet connectivity is no longer an issue which has allowed countries to share information on a global scale and in a direct way. It has created more space for innovation, research and innovation as networks have ended the isolation of African scientists and researchers. There is now access to information from more developed countries and this is changing the way that people think. It is up to governments and regional economic communities to implement policies that will allow countries to benefit from the international connectivity and long-term projects such as this one sponsored by Google. In Africa, companies have a very limited commitment to the expansion and deepening of internet services and when there are not enough opportunities, vision is short-sighted and interest in collaborating is practically non-existent. There must be a political environment that will help these telecom companies to focus on what is most important like regional development.
Historically in Africa, governments have traditionally left telecommunications and internet infrastructure in the hands of the private sector but with the future prospects and potential economic benefits that digitisation brings, there has been an increased government interest and political commitment to the issue over the past decade; with many African governments leveraging public-private partnerships to enhance the growth of the sector in their countries.
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Coming at a time when the digital economy policy of the Federal Government led by the Ministry of Communications and the Nigerian Communications Commission (NCC) is in full gear, the investment programme by Google provides a veritable avenue for the Nigerian government to key into and maximise full benefits from the programme which aligns with its domestic drive. The digital economy policy was hinged on the evidence that Nigerians are a highly innovative people and a thriving digital economy will create employment opportunities for its population and improve the standard of living. With the digital globalisation of the world transforming every aspect of modern life, the policy was created to take advantage of them to make Nigeria a leading player in the global digital economy and act as a catalyst to facilitate the diversification of the economy and the attainment of major national objectives vis-a-vis ease of doing business, creating employment opportunities, improving security, reducing corruption and expanding the economy. The pillars of the policy were carefully selected to include all the key aspects that the country needs to focus on in order to actively participate in the global digital economy. Special consideration has also been given to the nation’s areas of strength and comparative advantage as a country.
To consolidate on the gains recorded in the internet reach in Nigeria and as part of its digital economy drive, the Federal Executive Council approved the national policy on 5G (5th generation) network for Nigeria having gotten assurances from the World Health Organisation (WHO) and the International Telecommunications Union (ITU) that the deployment of the network leaves no adverse health effects on the environment. The 5G network offers significant advantages over the current technologies in the areas of much lower latency, higher bandwidth, greater device density, longer life for nodes and enhanced network flexibility. The NCC recently disclosed that it has attained a 97% readiness for the implementation of the 5G network in Nigeria. The commission said it was working with operators to implement certain initiatives to ensure network expansion, with ongoing plan to auction spectrum in 3.5GHz band to operators for the deployment of 5G network in Nigeria.
As a country with one of the largest enterprising, entrepreneurial and tech-savvy youth population in the world, Nigeria is well-positioned to develop a strong and lasting digital economy which would have positive transformational impacts on the country. In order to reap the benefits from the programme, the country needs to focus and strengthen the five main pedestals upon which a digital economy stands namely; digital infrastructure, digital platforms, financial services, digital entrepreneurship and digital skills.
With its position as the most populous nation in Africa and its biggest economy, Nigeria cannot afford to lag behind in this developmental stride that has the potential to open more vistas of digital expansion and launch wider frontiers of technological advancement in the continent. Wide-range collaborations, consultations and governmental interest towards harnessing the opportunities for growth inherent in this investment strategy towards a broader accomplishment of our own national digital economy drive will be a venture that will yield substantial returns for the country in diverse areas.