The need for stakeholders’ collaboration has been highlighted as a major factor in development of digital economy in Nigeria. This was one of the recommendations in a research study carried out by the Emerging Technologies Research Unit of the Research and Development Department for the Nigerian Communications Commission to ascertain the Emerging Role of Data and FinTech in the Development of Digital Economy and the regulatory implications.
According to the research report, NCC needs to drive collaboration toward informed and effecting regulation with relevant stakeholders such as Ministry of Communications & Digital Economy, CBN, NITDA and NOTAP; adding that “constant collaboration would establish information sharing and boost stakeholder involvement.”
Other recommendations highlighted in the report include; “the Commission should consistently engage with the ITU on FinTech standardization efforts for replication at the National level.”
“Collaborate and partner with Academia and Research Institutions and Start-ups to drive constant and intensive research in the field of Emerging Technologies such as FinTech. This partnership would also foster sensitization and educational reform of Nigerian school curriculums to include ICT and digital skills for retool and reskill of Nigerians for this new era of emerging technology.”
“The Commission should encourage investment in local FinTech start-ups.”
“The Commission and CBN should collaborate and organise forum for FinTechs and Banks, on strengthening their digital infrastructure platforms and systems.”
“Financial service players should be encouraged to provide enhanced digital products, as well as personalized services (digitaland non-digital) that could provide significant return on investment.”
“Engage in stakeholder engagement and capacity deployment programmes with SMEs, micro-business, employers, employees, trade groups, among other stakeholders, to enlighten them on the benefits of utilizing digital platforms as a channel for financial transactions and commerce, and as a bridge builder for a digitalised Nigeria”.
The research underlined the significant impact of digital revolution and the growth of Fin Tech Start-ups.
It noted that “the impact of the ICT revolution is now evident in virtually all countries, Nigeria, inclusive.” Adding that, “the phenomenal global transition towards a “digital economy” with an estimated worth of $11.5 trillion globally, equivalent to 15.5 percent of global GDP and which has grown two and a half times faster than global GDP over the past 15 years, calls for urgent policy measures in Nigeria for the purpose of providing the necessary regulatory framework to support the spread of these new digital technologies and ensuring that greater levels of digitalization of Nigeria’s economy and the society at large, are achieved.“
“The year 2017 witnessed a rise in the total global Start-ups’ funding. Globally, up to 45% of all Start-ups focused on financial inclusion and FinTech Start-ups are becoming increasingly attractive. As a result a record $93 million in investment was raised between 2015 and 2017 by Fin-Tech companies globally”, the report said.
The report also commended the effort of President Muhammadu Buhari, for approving the re-designation of the Federal Ministry of Communications and Digital Economy (FMoCDE) on the 17th of October, 2019, among the priorities by the Federal Government for a digitised Nigeria.
It added that “Along with the National Digital Economy Policy and Strategy document 2020-2030, the Federal Government launched an E-Government Plan 2020 with the mission to improve digital operations and services across MDAs in Nigeria. Some key Government digitisation initiatives include the Integrated Payroll and Personnel Information System (IPPIS) platform, and the active role of the development of a Digital Identity Ecosystem by the National Identity Management Commission (NIMC). Others include the Nigerian National Policy for Information Technology (IT), 2000; The Nigeria Vision 20:20 Policy; the National Broadband Plan 2013 – 2018, National Broadband Plan 2020 – 2025; the InfraCo Licence and project, amongst others.”
The report highlighted key challenges facing Fin-Tech startups in Nigeria.
“Today in Nigeria, it is estimated that there are about 210-250 FinTech operators/companies operating in the Nigerian space, and these players brought about the valuation of the industry to $153.1 million in 2017 and are projected to rise up to $543.3 million by 2022.”
“Despite these impressive statistics, Fin-Tech Start-ups in Nigeria still face significant number of problems to their uptake, use and acceptability in Nigeria such as: Bridging existing gap between Fin-Tech firms and traditional banking systems; The Regulatory Environment Remains Challenging’ Collaboration, Partnerships & Funding; Access to Financial Infrastructure; Winning Customer Trust and Access to Talent.”
“These problems pose significant challenges to the data collection and analysis and act as a hindrance to the growth of Digital Economy in Nigeria, and the achievement of the Digital Economy Policy and Strategy of the Nigerian Government.”
“Furthermore, in Nigeria various Agencies of Government and even large Corporations collect data on Nigerians. The lack of cohesion amongst these data generating and storing Organizations also impact the rollout of a digital Nigeria. Some of these data collecting offices include various Agencies of Government and also private entities managing Nigerian data, a critical analysis of its impact on the proposed Digital Economy is needed.”
“Some of them include the Nigerian Immigration Service, the Nigerian Customs, Government hospitals, Telecoms services providers, private Banks, the Nigerian Identity Management Agency, private hospitals, Insurance companies, the Directorate of Road Traffic Services, the Nigerian Communications Commission, NOTAP, the Central Bank of Nigeria, the National Population Commission, the National Bureau of Statistics, the Electricity Distribution Companies, the Federal Inland Revenue Service, the Corporate Affairs Commission, the Federal Ministry of Education and all its Agencies, data collecting bodies in all State and Local Governments of Nigeria, large supermarket chains.”