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Is Nigeria’s Start-up Ecosystem the Key to the Country’s Coronavirus Recovery?

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Start-up - Investors King

A recent report has highlighted the significant potential of Nigeria’s burgeoning tech start-up scene, but also outlined a series of limitations that need to be addressed for the segment to emerge as a true engine of the country’s recovery from Covid-19.

As OBG has explored, Fourth Industrial Revolution technologies have taken root across sub-Saharan Africa, with many states leveraging digital solutions in order to drive their coronavirus recoveries.

Nigeria is a frontrunner in this regard. For example, Lagos is home to one of the three most important tech clusters in the region, with the other two being in Nairobi, Kenya, and Cape Town, South Africa.

Indeed, according to a recent report by fDi Intelligence, a division of the Financial Times, the Nigerian city has the highest number of start-ups in Africa.

Published in April, the inaugural African Tech Ecosystems of the Future rankings put South Africa in first spot in terms of its overall tech ecosystem, as well as in many individual metrics, among them economic potential, start-up status and business friendliness.

Nigeria was ranked sixth overall, with the report also highlighting various challenges that remain to be surmounted if the country’s start-up scene is to become globally competitive: “Although Lagos is renowned for its start-up ecosystem, there is a significant disconnect between the city’s tech ecosystem, its surroundings and the wider country, which suffers from chronically poor infrastructure and education, and recurring political instability and security issues.”

There are also certain regulatory hurdles to overcome.

For example, many of the country’s most prominent start-ups operate within the financial technology (fintech) space, partly in consequence of the limited formal banking facilities available; Nigeria was the leading country for Bitcoin and cryptocurrency adoption last year, according to statistics firm Statista.

However, in recent months the Central Bank of Nigeria has been cracking down on cryptocurrency, despite stating that it is not moving towards an outright ban.

This was intended to bring the booming market under control and prevent the technology’s misuse. But critics have said that it will stifle innovation and limit the potential of tech start-ups.

Driving expansion

Despite such hurdles, there are encouraging signs that authorities are serious about boosting the Nigerian digital sector.

At the end of 2019 the Ministry of Communications was rebranded as the Ministry of Communications and Digital Economy. This was followed in early 2020 by the launch of the National Digital Economy Policy and Strategy 2020-2030.

This signal document lays out eight pillars that will be used to transform Nigeria into a leading digital economy. These are: developmental regulation; digital literacy and skills; solid infrastructure; service infrastructure; digital services development and promotion; soft infrastructure; digital society and emerging technologies; and indigenous content development and adoption.

Meanwhile, a 5G network is set to be rolled out across the country, following successful trials in the cities of Lagos, Abuja and Calabar.

While the onset of the coronavirus pandemic came shortly after the launch of the new policy, it would seem that the vision it enshrines is already yielding results: in the fourth quarter of 2020 the Nigerian digital sector grew by 40.7%, a trend that continued into the first months of this year.

A further incentive to growth of the digital sector is that – in common with many oil-producing countries – Nigeria is seeking to limit the prominence of hydrocarbons in its GDP mix, following a very troubled year for oil prices. An increase in the GDP contribution of digital companies could stand to pick up some of the slack when it comes to diversification.

Lasting changes

While much work remains to be done, there are already countless success stories of innovative start-ups that are changing the face both of Lagos’ tech ecosystem and Nigerian society as a whole.

For example, in one of the biggest pieces of Nigerian tech news in 2020, local fintech start-up Paystack was acquired by US-based giant Stripe in October, in a deal that was reportedly worth more than $200m.

Founded in 2016, Paystack processes more than 50% of payments made in Nigeria, and will now spearhead Stripe’s African expansion.

Elsewhere, Arone – based at the Roar Nigeria Hub of the University of Nigeria – builds drones that deliver medical supplies to more remote regions. This is particularly useful in the case of certain Covid-19 vaccines, which must be kept at low temperatures.

But the potential applications of drone technology go beyond health care. As Emmanuel Ezenwere, CEO and founder of Arone, recently told OBG, “drones can broadly improve logistics in places with high traffic congestion, such as Lagos and other big cities in Nigeria, as they can bypass traffic jams and deliver goods, household items and food supplies within 15 minutes. This will have a great impact on e-commerce.”

This is a prime example of how the increased digitalisation effected by coronavirus is being leveraged post-pandemic to drive innovative approaches to business in general.

Meanwhile, Nigerian start-ups are also driving renewable energy, a key component of the world’s “green recovery” from Covid-19.

At the start of last year Lagos-based company Rensource Energy raised $3m in equity investment from Proparco – a development finance institution partly owned by the French Development Agency – with the support of the EU, under the Africa Renewable Energy Scale-Up facility.

The funds will contribute to Rensource’s plan to develop, build and operate over 100 mini-grids, providing clean and affordable electricity to 250,000 small and medium-sized enterprises, and saving 30,000 metric tonnes of CO2 emissions every year.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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E-commerce

Jumia Grabs Opportunity for Black Friday Deals

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Black friday

Black Friday is a concept that originated in the United States, but the yearly retail fever has had a popularity boom across Africa in recent years, with customers moving to take advantage of the best deals that retailers have available.

Jumia, which is a marketplace with its focus placed on Africa quickly grabbed this opportunity when it first introduced the Black Friday event about nine years ago across its markets in Africa, focusing mainly on Egypt and Cairo which are the company’s top two cities when considering volume of orders.

Since its inception, the company has witnessed staggering levels of success with the event, and company data reveals that the love which consumers have for Black Friday has been increasing across the continent every year.

During the 2020 Black Friday event, the top sellers on the Jumia platform saw a 141% year-on-year increase in the amount of items sold, with one out of three clicks on average being a new customer. The company also said that it witnessed an increase in brand appetite across every one of Jumia’s 10 markets during last year’s sale, which lasted every Friday in November.

The trend is expected to continue this year’s version of Jumia’s Black Friday, as it is running from November 5 until November 30.

The company which is based in Nigeria has entered into partnerships with major brands like Adidas, HP, Unilever and Diageo, as well as with thousands of sellers in order to provide consumers the best deals on a very wide range of products.

The CEO of Jumia Nigeria, Massimiliano Spalazzi told Lagos-based Vanguard that the Black Friday programme has been a success every year, and is the biggest sale of the year.

He also stated that the 2021 Black Friday campaign will place focus on strengthening the company’s position as a brand within the African market, and providing support to the sellers.

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Fintech

NQR Payment Solution Excites Nigerians: Everyone Can Now Pay Sharp Sharp

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Since the NQR payment solution was introduced to the Nigerian market in March of this year, it has reached millions of Nigerians across major markets in different states.  Lagos, Ibadan, Abuja, Kano, Uyo, and Portharcourt are just a few of the states that have witnessed the fast seamless, and reliable NQR payment solution.

Business owners and customers across Nigeria have embraced NQR en masse as a result of the market penetration drive, citing the convenience, speed, and reliability of the payment option.

The NQR Payment Solution is a secure QR-code-based payments and collections platform that allows customers and business owners to accept and make payments for goods and services. The payment system will bring together all of the country’s closed QR code schemes for a more consistent user experience and faster digital adoption.

The campaign was led by several popular celebrities who thrilled the market crowds and showcased how the NQR works. Mercy Johnson, Mercy Aigbe, Odunlade Adekola, Real Warri Pikin, Saddiq Sani Saddiq, Bisola Aiyeola, and Nedu were a few of the ambassadors for NQR.  They encouraged business owners to sign up for NQR, and encouraged customers to make payments with NQR.

The NQR payment solution team recently toured Southern Nigeria, with comedians Edo Pikin and Real Warri Pikin leading the train to sensitize the people about how the NQR merchant app works and how customers can #PaySharpSharp with live demonstrations.

NQR agents also went through the markets educating both business owners and customers about NQR’s benefits. Representatives from several commercial banks were also on ground to address business owners’ concerns. Everyone learned about the NQR payment system and had the opportunity to test it out as well as express their satisfaction with it.

NQR is now available in a store near you.

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Technology

Over 100 Million Windows-targeted Malware Developed in 2021 Alone

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Malware
According to data analyzed and presented by Atlas VPN, 2021 marks a record year for the development of new Windows malware. Even though 2021 has another month to go, cybercriminals have already developed a whopping 107.28 million unique threats targeted at Windows devices.
The data for the analysis was provided by AV-TEST GmbH, an independent research institute for IT security. The figures were last updated on November 23, 2021.
Interestingly, the creation of new malware types targeted towards Windows OS devices has been growing steadily since 2012. On average, the quantity of new malicious software samples grows by 9.5 million or 23% YoY.
This year so far, we see 107.28 million new threats for Windows OS, representing a 16.53 million or 18% increase over 2020.
In other words, cybercriminals employed more of their resources towards Windows OS than ever before. To put things in perspective, threat actors developed around 328 thousand malware samples daily in 2021.
Cybercriminals work together to reduce costs
The fact that malicious software is easier to develop than ever before contributes to this unprecedented increase in risks.
Hackers no longer require advanced programming abilities because they can buy ready-made malware code, customize it to their needs with a little coding, and create an entirely new malware type.
Moreover, the wide availability of hackers-for-hire made prices ridiculously cheap. For example, one of our earlier analyses uncovered that hiring attacks on the dark web cost as little as $250 per attack.

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