Growing Nigeria's tech talent ecosystem
Nigeria has the youngest population in the world, which can reach 733 million by 2100. It also has the most prominent tech ecosystem in Africa. Yet, there is a shortage of tech talent.
According to the UN, countries with rapidly growing numbers of young consumers will be scarce in the next century. Estimates show that there will be a global shortage of more than 85 million tech workers by 2030 – an excellent opportunity for Nigeria to grow its tech talent; however, currently, 33% of the Nigerian population is unemployed.
As Nigeria’s young population grows, so does the country’s unemployment rate. Nigeria can’t capitalise on its growing population as it is becoming increasingly difficult for regulators to free up resources for education, healthcare and infrastructure. For instance, electricity and transport are not developed enough to meet the population demand, making it even more challenging for the government to provide education and job training opportunities.
Nigeria has the most developed tech ecosystem in Africa and has the potential to accelerate and incubate innovation worldwide. Digital infrastructure and tech talent challenges hinder the country’s tech growth.
One of the main reasons for Nigeria’s attractiveness to investors is its population growth. Companies see it as an opportunity to access a large consumer market and grow their workforces. In a recent report by the tech ecosystem accelerator, Africarena, however, tech investors point out that access to qualified tech talent is a massive barrier to entry. Entrepreneurs also say that it is still challenging to start a business or invest in Nigeria.
Tech companies often raise capital in Nigeria but incorporate their companies in other countries with friendlier investor climates. For example, many incorporate in Kenya, as the legislation is designed to make it easier for foreign investors to deploy capital. Nigeria’s business climate also makes it difficult to set up local investments funds to finance seed-stage companies. For the country’s tech ecosystem to grow, further regulatory support is required to create an investor climate friendlier to local and international companies.
Better tech training and education programmes may be the solution to Nigeria’s employment problem. Stutern’s Nigerian Graduate Report shows that the tech sector is one of the biggest employers of young Nigerians, competing only with traditional industries like education, media, banking and financial services, all of which are now tech-enabled. According to Future Africa, too many compete for jobs in traditional industries such as civil service, agriculture, and banking. This is because they do not have the skills or industry experience required by tech companies. Traditional industries are not growing as fast as tech industries and do not present such substantial growth opportunities.
Where is Nigeria’s skilled tech talent?
Many of the talented and highly skilled Nigerian tech professionals move abroad in search of better growth opportunities. Their success abroad also drives more of their peers to follow in their footsteps. Many others live in Nigeria but work remotely for foreign companies, primarily exacerbated by the Covid 19 pandemic.
In the ’90s, Nigeria’s tech ecosystem was beginning to develop; as software companies grew and partnered with global IT companies, most of Nigeria’s tech talent came from India. In time, Indian training institutions were established to train Nigerian talent to fill in the talent gap. 10 years ago, 50% of Nigerian IT companies’ talent were Indian or South African nationals, says Tosin Faniro-Dada from Lagos State Employment Trust Fund (LSETF). Although more Nigerian citizens are being hired and trained in tech companies today, some companies still prefer to hire foreign talent, decreasing training opportunities for locals.
Tech training and education opportunities in Nigeria will grow as more international and local tech companies are established.
For more companies and investment funds to startup in Nigeria, digital infrastructure and regulatory business improvements are essential to strengthen the country’s tech ecosystem, which would require proactive and collaborative partnerships between the public and private sectors.
To improve the business environment in Lagos, Nigeria’s strongest tech city, the Lagos State Employment Trust Fund is formulating policies designed to improve the city’s attractiveness to investors. The fund is also managing loan programmes to help talent access finance for training and skills development. Companies like Skillup Africa are helping finance tech student loans by pooling capital from individual and institutional investors. Over the past year, syndicates that connect investors to innovators, such as the Future Africa Collective, have been growing, increasing inward investment and helping startups receive financing.
The Nigerian government is focused on creating an enabling business environment, which can support the private sector and bridge Nigeria’s digital divide. As part of this, the government has launched the programme – National Adopted School for Smart Education (NASSE), designed to engage children with technology early on and provide inclusive, safe and practical training. The UK government has recently committed to helping Nigeria in its inclusive digital economic agenda and promoting the country’s tech ecosystem’s growth.
One of the company’s working to bridge Nigeria’s talent gap is the American training company, Andela. The company standardised and diversified the way tech talent was trained, accelerating international market access to African talent development and paving the way for other training organisations. Today, many of Andela’s developers work remotely for foreign clients. Similar Nigerian companies can be created to foster talent training and education. While Andela focuses on software development, the new ones could focus on future technologies such as blockchain and AI.
Nigeria’s most significant talent concentration is in Lagos, where most startups have a presence. Many young professionals move to Lagos to seek better career opportunities, leaving other regions with fewer skilled workers. The Nigerian recruitment company, TalentQL’s mission is to develop talent outside Lagos. TalentQL plans to build campuses that provide co-working spaces, electricity, broadband and even accommodation to help talent find good opportunities outside the leading tech hub.
Nigeria’s tech future could be very bright. The country is quickly advancing in important impact sectors like Health tech and Agri tech. To further scale, Nigeria’s tech hubs need international and local support from the public and private sectors, providing investment, partnership and talent training opportunities.