Digital Economy in Nigeria: 7 Damn Things Every Professional Should Know

Digital-Economy in Nigeria -Diagnostic-Report
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At this point, for most Nigerians, the term digital economy in Nigeria is not something that surprises us. In fact, most would say that it is related to digital, the Internet, and perhaps new technologies. And the truth is that they are not wrong.

But what is the digital economy? What features does it have? Does it offer advantages and disadvantages? 

We tell you everything.

What is the digital economy in Nigeria

First of all, the first thing we want is for you to understand what the digital economy means. The digital economy aims to help an economy to produce and market goods and services. However, to achieve this, it makes use of the Internet and information technologies.

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In other words, the digital economy is a branch of the economy where one of the most important factors, and the fundamental pillar, is the Internet. Without that connection, it wouldn’t be called digital economy.

In this way, digital economy in Nigeria helps connect users with sellers, producers and distributors with consumers to be able to make purchases and sales using technological advances.

Factors that make up this type of economy are:

  • Infrastructure , understood as hardware, software… (Internet, computer, tablet, mobile…).
  • eBusiness, which simply means electronic business technology.
  • The eCommerce, the online stores and marketplaces where buying and selling take place. Here we can also include service pages, forums (if you have a buy-sell-exchange section)…

Is Nigeria a digital economy?

digital economy in nigeria

Actually, the term “digital economy” is not something that has always existed; It’s actually quite modern. To do this, we go back to the 90s, when the Internet began to break into the economy and little by little companies emerged that had more to do with digital goods, services, and way of transacting business deals than with the physical approach.

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Now, this term is something that can be applied in many areas, and it is not as mysterious as it was before. Everything related to artificial intelligence, virtual or augmented reality; and robotics, autonomous vehicles, blockchain, computing or the Internet of things, that are all part of the digital economy.

The Ministry of Communications & Digital Economy

The Minister of Communications and Digital Economy, Dr. Isa Pantami, have vocally re-emphasized their commitment to support a policy of the Federal Government to leverage ICT to make digital economy in Nigeria a reality and striving sector; they hope to transform Nigeria into a full fledge digital economy.

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Nigeria in recent time is one of the fastest economy of the world that is embracing digital economy. Ofcourse, Nigeria has its problem of having elderly people who do not understand much about the digital economy at the helm of affairs.

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However, the younger generation of the country can match up with the knowledge and skills exhibited by nations that runs a digital economy.

The following reasons suggest Nigeria is a digital economy:

  • There are developmental Regulations being put in place to regulate digital economy in Nigeria.
  • Digital Literacy & Skills among its population, especially the youth
  • Digital Infrastructure and Service Infrastructure.

Characteristics of the digital economy in Nigeria

After knowing what the digital economy is so that everything is clear to you, you must make sure you know what the characteristics that define the digital economy in Nigeria are:

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  • The fact that information must always be digital. This means that it is done through the Internet. And it allows not only to transfer it in a matter of seconds but also to be able to send a large amount of information to any part of the world without borders (although in this case, there could be filters or blocks).
  • Traditional resources become obsolete , exchanges are done through “digital” knowledge. This is a problem for many older people, but not so much for young people who increasingly have their first digital knowledge at younger ages.
  • It links users, merchants, suppliers and distributors in a more direct way. An example of this is when we buy from Amazon or Jumia through a third-party store. However, when the order is going to arrive, we receive an email from the ecommerce platform and distributor notifying us of it.
  • There is greater economic globalization. In other words, by making it possible for companies and entrepreneurs to have unhindered access to the foreign market, there is a greater possibility of growing and making businesses globalize throughout the world.
  • Products are developed much faster . Not only because of the competition, but because there is more room for creativity and imagination, especially using new technologies.

Advantages and disadvantages of Digital Economy in Nigeria

Although everything may seem nice, the truth is that the digital economy in Nigeria has its good things and those that are not so good. In addition, everything will depend on the people transacting ( the user, the owner of an eCommerce, etc.).

Among the advantages it has are:

  • Reduce production costs, which makes the product reach more people because it will cost less.
  • There are better prices (because of the above) and that means savings, not only for producers, but also for those who buy it.
  • You have a note or report with very valuable data about your customers when you engage in digital economy in Nigeria. In fact, sometimes these can help you define your ideal client and priorities your authentic customers.
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However, all this also carries something negative. Among them:

  • The fact that the user sees it as an intrusion on their privacy. Imagine that you are thinking of buying something and suddenly advertising does nothing more than show you those products, wouldn’t you feel spied on? This generates distrust in many users.
  • There is also the fact that a product is bought without physically seeing it. Although this is something that has been almost completely demolished, there are still some sectors that suffer from it, such as clothing, footwear, etc.
  • There is a slower obtaining of the product. Normally in the stores you have it immediately, thus satisfying that need, especially if it is an immediate need. But when buying it online, it is normal to wait 24-48 hours (or more) to get it.
  • There are many Nigerian users who do not know how to confidently use technology, which means that they cannot purchase products or that it is very difficult for them to buy online. But for that you can choose to reach consumers in many different ways (for example, by email, telephone, WhatsApp…).

Examples of digital economy in Nigeria

As we know that sometimes seeing examples of the digital economy in Nigeria can be complicated, we wanted to find some that you understand what it specifically refers to. Here are some examples:

  • The online stores. Some stores like konga even combine physical care (in physical stores) with virtual care through the Internet.
  • The cryptocurrencies. Well yes, believe it or not, it is another example. Keep in mind that these currencies are “currencies of the Internet” and that little by little they are becoming very important and indispensable in today’s digital economy.
crypto trading as part of digital economy in nigeria
  • The Internet of things. Do you have a device that is connected to the Internet? All this is part of the digital economy without you realizing it.

There are many more examples that we can talk about but we believe that with these you have an idea of ​​what the digital economy in Nigeria is. 

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Are you part of it yet? Use the comment section to air your view or to report an error.

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