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What Nigeria Can Learn from India: A Comparison of India and Nigeria's Tech Industries

Power

Published: 8th Jul, 2024

Author: Ebosetale Oriarewo

Duration: 5min Read

Nigeria and India are different countries. Yet a quick Google search of ‘Nigerian and Indian tech industries’ will produce several articles comparing them.

Recently, the Director-General of the National Information Technology Development Agency (NITDA) mentioned in a media briefing, plans for the Nigerian tech sector to surpass India’s in technological exploits, indicating that India’s sector is a benchmark for the Nigerian one.

An in-depth look into both countries reveals why they are sometimes compared to each other. Starting from similarities in social factors, for example:

  • Population size: India is currently the most populous country in the world, with over 1 billion people, while Nigeria is the most populous country in Africa, with over 200 million people. It is clear that the numbers are not close, but they represent the size of human capital available in both countries. Youths also form a large proportion of the population in both countries.

  • Ethnic and religious diversity: India has 780 languages, 2,000 ethnic groups, and eight major religions. Similarly, Nigeria is also a multicultural country. It has 525 languages, 371 tribes across 250 ethnic groups, and three major religions.

  • In both countries, over half of the total population has access to the internet. According to Statista, this is 51.5% for India and 55.4% for Nigeria, making both countries the second and seventh countries with the most internet users in the world.

These similarities establish a common ground between India and Nigeria, explaining why they are usually compared. When you also look specifically at Nigeria’s tech sector—from having over 3,360 startups in the country, the highest number on the continent, to being home to five of the seven unicorns in Africa and consistently receiving the highest amount of investor funding—it looks a lot like India’s tech sector a few years ago, making India a good model for Nigeria’s tech development.

Where Nigeria is still booming or developing, India is more advanced, providing a picture/guide for what Nigeria could look like in the future with the proper investments and efforts. Here are some necessary data on the Indian tech sector’s performance in recent years:

These are only a few pointers to the strengths and achievements of the Indian tech sector. Many strategies and policies have made it one of the strongest tech hubs in the world today. If the Nigerian tech sector is to attain similar feats, there are vital features to replicate. 

Three Things India Has Done Well That the Nigerian Technology Sector Should Emulate 

The advancements and successes of India’s tech sector can be attributed to several factors, including a supportive regulatory environment, education, high technical/digital literacy skills, and the quality of technological innovations. While there may be more factors, these are the three key areas this insight will cover.

Supportive Regulations

Government regulations can either harm or improve the conditions of businesses, including tech startups. In India, over the years, the government has set and implemented policies and funds that inspire not just growth and innovation for locals but also motivate foreign companies to set up in the country. The country ranks as the world’s third largest startup ecosystem after the US and China, with more sprouting yearly. In 2023, Statista recorded 489 new technology startups.

Some of these favourable regulations or policies in India include:

  • Digital India Initiative: The Indian government launched this programme in 2015 ‘to transform India into a digitally empowered society and knowledge economy’. It has three key vision areas: digital empowerment of citizens, digital infrastructure as a core utility for every citizen, and governance and services on demand. This initiative has impacted the growth of India’s digital infrastructure.

  • Small Industries Development Bank of India (SIDBI) Fund of Funds for Startups Scheme: This scheme started in 2016 with an initial fund of Rs 10,000 crore, equivalent to $1,195,851 USD today. The fund was started to serve as a partner to emerging startups by providing them with needed funding. This scheme has also been recognised as part of the funding of 18 unicorns in the country, including ShareChat, Slice, and Mamaearth.

  • The Indian government also motivates foreign companies to set up in the country with tax reductions.

These are only some of the few existing supportive regulations. In Nigeria, however, government schemes like the Startup Act and the 2023 $618 million startup funding have yet to be seen or implemented. As of the time of writing this, there is no list or data on how the fund was disbursed or its beneficiaries. Aside from this, there are sometimes poorly planned policies that affect startups, such as the impromptu ban of bikes in Lagos State ending Gokada or the new KYC address verification method that could cost Fintech startups $1 million to implement. This lack of well-thought-out policies could affect the growth of startups while discouraging foreign companies from building or investing in Nigeria.

Education and High Technical/Digital Literacy

According to a survey run by GetBundi, a Nigerian-based Science, Technology, Engineering, and Mathematics (STEM) EdTech platform, 85% of Nigerian graduates have no digital skills outside their use of social media. This survey included 100 National Youth Service Corps (NYSC) members who are all graduates; only 19 had some form of digital skill. According to their report, ‘Even that skill was mostly Microsoft Excel and basic knowledge. All seven with a basic knowledge of programming, machine learning, and data science studied outside Nigeria – five in the UK, one in the United States, and one in Malaysia.’

When compared to India, things are entirely different. From the early introduction to experiential sciences to the importance placed on Mathematics from middle school, the Indian education system was previously point-based, where a higher score in maths was rewarded above others. The country also has several Engineering schools, 23 Indian Institutes of Technology (IITs) and seven Indian Institutes of Science Education and Research (IISERs). Yearly, India produces about 2 million STEM graduates and over 25,000 students from the IITs in 2022-2023.

What these investments do for technological advancements is produce a large talent pool of highly innovative and skilled people who understand technology and are equipped to not only create tech solutions but also adopt and adapt to emerging technologies. It is also an attractive asset that draws companies to set up operations in the country either because of easy access to technical talent or because it makes them outsource jobs to talents in such countries.

India is one of the two largest exporters of Business Process Outsourcing (BPO) services, a tech/ICT sector subsector. This industry jointly comprises 60% of the country’s service exports. India handles 56% of the world’s BPO demands with an earned value of $51bn in the fiscal year 2021-2022. It is expected to create six million jobs and reach $225-250bn by 2025.

Nigeria has the potential to be a top player in the BPO industry because of its increased access to the internet and its youth population. However, the quality of growth depends on several factors, including Nigerians' ability to compete with other technical and digitally skilled talents worldwide.

The following chart shows a breakdown of the Indian IT industry, including the contributions of the BPO to the sector in 2018.

Quality of Technological Innovation 

Innovation is another critical area that can accelerate Nigeria's tech performance locally and globally. The Indian tech sector is known for its innovative technologies, which are present even in emerging tech areas like the Internet of Things (IoT), AI, Blockchain, etc. However, innovation is greatly affected by the two players mentioned earlier in Nigeria.

Regulations like the government circular released on 5 February 2021 that banned all cryptocurrency transactions immediately, ending all innovations in that space and sending out all possible investments to other more enabling environments like Ghana and Kenya is, a symptom of this problem. These bans can lead to what may soon become a trend given the current business climate in Nigeria—foreign companies ignoring Nigeria to set up in other African countries. A recent example is Microsoft closing its Nigerian facility to build a $1 billion data centre in Kenya, Google’s AI Research Lab in Ghana, Google’s Product Development Center in Kenya, Visa’s Innovation Center in Kenya, and IBM’s Research Centers in Kenya and South Africa.

Another factor affecting the quality of innovation in Nigeria’s tech sector is the lack of understanding and technical knowledge by most people about how emerging tech like AI can benefit society and have the potential to scale globally. In a previous insight, the fears of Africans generally towards AI were covered, including data and possible solutions.

Nigeria has the potential to be one of the world’s top players in the technology industry, from the youth population to the current strides made so far. However, to achieve such status, the country must look at the progress of industry leaders and adopt key measures to produce similar growth. It must build a tech sector renowned globally for impact and innovation and even locally as a source of employment.

References

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