Rapid digital changes are redefining our world economy and activities today, penetrating practically every sector and element of daily life and shaping how we study, work, trade, socialize, and access public and private services and information. The backbone of the digital economy is digital platforms. The advantages of digital media stem primarily from their capacity to technologically connect people and things, facilitating digital transactions and interactions, including exchanging data and other commodities. Digital innovations have the potential to become an engine of economic transformation in Nigeria and place the nation on an upward growth trajectory, given its significant youthful and enterprising population.
Digitalization can potentially be a powerful force for socioeconomic development in Nigeria. With a population of over 200 million people, the largest population of young people, and the biggest and fast-growing economy in Africa, digitalization can play a critical role in driving growth and development in Nigeria, which would, in the long run, have a transformational impact on the country. Digitalization can impact Nigeria's socioeconomic development by increasing access to information and communication technology (ICT) services. This can lead to increased connectivity and access to digital services, such as e-commerce, and online banking, which can help drive economic growth and improve financial inclusion and access to critical services in areas such as healthcare and education.
A key impact of digitalization on economic growth and development in Nigeria is the increase in access to digital services, such as e-commerce, online banking, and other financial services. This can help businesses to reach new markets and customers, leading to increased sales and revenue and creating. It can also help reduce transaction costs and increase efficiency, leading to increased productivity. Leveraging the opportunities presented by digitalization, Nigeria can accelerate its development and create new opportunities for its people.
Digitalization can open up opportunities for business development and employment growth. In 2016, the global digital economy was around $11.5 trillion, or 15.5% of the world's GDP. In less than ten years, it is predicted to surpass the entire economy's growth and reach 25%. Nations like Nigeria, which currently only account for a small proportion of this development, must strategically invest in the core elements of their digital economies to keep up. Nigeria can develop into a hub for technological innovation and entrepreneurship, which could drive economic growth and add new opportunities due to a growing pool of professional employees with expertise in the IT sector.
The impact of digitalization on economic growth and development in Nigeria can be significant, as it has the potential to drive innovation, increase productivity, and create new opportunities for businesses and individuals. However, there are also challenges to digitalization in Nigeria, including limited access to reliable and affordable internet services, inadequate digital infrastructure, and a lack of digital literacy among some segments of the population. Additionally, a significant gap in digital literacy keeps the most underprivileged from taking advantage of digital benefits. Nigeria's general education standards are poor, and the quality provided at all levels is consistently impacted by inadequate financing and declining teaching capacity. Nigeria's educational system has a quality score of 2.8, lower than the continent's average of 7 and the global average of 3.8, according to the World Economic Forum Executive Opinion Survey. Additionally, Nigeria is said to spend one of the least on education (5.4% in 2022). These challenges must be addressed if digitalization is to be fully leveraged for socioeconomic and inclusive digital economy development in Nigeria.
Despite some progress on the implementation of the goals of both the E-government Master Plan and ICT Road Map and the need for a digital-led strategy to make the Nigerian economy more competitive in the 21st-century global economy as recognized in Nigeria’s Economic Recovery and Growth Plan 2017–2020 (ERGP), much remains to be done in Nigeria, including institutional coordination, developing a Privacy and Data Protection Act, monitoring the quality of digital services, and fully embracing the Open Government Partnership.
Recommendations
Nigeria must develop a sustainable digital economy by investing in core aspects to have a robust and inclusive digital economy. The World Bank's Digital Economy for Africa (DE4A) identifies the following five (5) pillars as being synergistic and requiring the employment of governmental and private sector solutions.
Digital Infrastructure: To connect to local and international digital services and participate in the global digital economy, digital infrastructure offers internet access for individuals, organizations, and governments, spurring socioeconomic development in Nigeria. Internet connectivity that is both reliable and cost-efficient is a crucial building block for a digital economy in Nigeria.
Digital Platforms: All facets of life are dominated by the products and services offered by digital platforms, accessed via digital channels, including computers, mobile devices, and the Internet. Interacting with one another through digital platforms enables producers and users to create value, leading to an increased digital economy. Commercial organizations offer a growing number of goods and services through digital media. It, therefore, behooves the government to create systems that provide access to Digital platforms and services for the citizens for ease of communication and information sharing.
Digital Financial Services: Digital financial services provide access to various digital financial services, including credit, savings, and insurance, and enable citizens and enterprises to execute transactions electronically or online. Individuals and businesses need access to low-cost and efficient digital financial services to operate in the digital economy.
Digital Entrepreneurship: By fostering new, growth-oriented enterprises and transforming existing ones, digital entrepreneurship and innovation can help build an ecosystem that will further help the economy become more competitive and productive while also fostering net employment growth of the economy at large.
Digital Skills: To support inclusive labor markets and foster innovation, productivity, and growth, it is crucial to ensure all individuals have the skills needed for a digital and globally connected world that is constantly expanding. To create a robust digital economy and competitive markets, the Nigerian economy needs a workforce adept at using technology. Digital skills constitute technology and business skills for building or running a start-up or enterprise. More people will be able to adopt digital products and services due to increased digital literacy. Digital skills are an essential human capital need in Nigeria.
Conclusion
Nigeria's chances of realizing its digital potential depend heavily on adopting a comprehensive approach to the growth of the digital economy. A coordinated and high-level system that maximizes connectivity is required to create an equitable digital economy rather than undertaking numerous dispersed actions. In the long term, this would encourage the creation of high-impact applications for delivering health, education, e-commerce, agriculture, and social services, resulting in socioeconomic development while reducing social exclusion, fraud, and cyber risk.
According to the World Bank’s Nigeria Digital Economy Diagnostic Report, Nigeria only utilizes a small portion of its digital economic potential. It must make significant investments to create a vibrant, transformative digital economy. Nigeria can develop into a hub for technological innovation and entrepreneurship, which could drive economic growth and add new opportunities due to a growing pool of professional employees with expertise in the IT sector. Digitalization can also help to promote entrepreneurship and innovation in Nigeria. By providing access to new digital tools and platforms, entrepreneurs can develop new business models and products that can help drive economic growth and create new jobs.
Nigeria needs to invest more in digital infrastructure and digital platforms, improve access to digital financial services, establish supportive regulatory environments for the digital economy to develop, pursue radical reforms that result in improved digital skills for her young population, and a more competitive digital job market, and as well support public-private partnerships to stimulate economic growth if it is to meet the ambitious goal of creating millions of jobs.
References
World Bank Group. 2019. Nigeria Digital Economy Diagnostic Report. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO
World Bank Group. 2019. Nigeria Digital Economy Diagnostic Report. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO Nigeria-Digital-Economy-Diagnostic-Report.pdf
World Bank Group. 2019. Nigeria Digital Economy Diagnostic Report. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO
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