By Jide Akinsemoyin
At the Nigerian Economic Summit on 23 October, President Bola Ahmed Tinubu told the business community that a $3 trillion Nigerian economy was possible by the end of the decade. If this is to be achieved, the government must make Nigeria’s industrialisation the cornerstone of its plans to grow the economy. It must also look to leverage off the experiences of the world’s leading economies, as well as current global trends, in making key decisions about the type of home grown, globally competitive companies that will be needed to spearhead the country’s leap into the $3 trillion economy club.
The concept of industrial revolutions is based on the introduction of changes to improve the way we live and businesses operate, driven by the technology available at the time. In this respect, it may be argued that Nigeria and much of Africa missed the first three industrial revolutions (i.e., the first industrial revolution driven by coal, the second industrial revolution driven by gas, electricity and oil, and the third industrial revolution driven by nuclear energy and electronics). Klaus Schwab, founder of the World Economic Forum (WEF), used the phrase “Fourth Industrial Revolution” to describe the current era of change, driven by the internet and digital technology. The implementation of President Tinubu’s vision of a $3 trillion economy will therefore come at a time when the world is experiencing rapid technological advancements and innovation. It will require the development of an environment where home grown Nigerian technology companies are able to evolve in the years ahead, to lead the country’s drive towards full industrialisation.
A look at the world’s most valuable companies in the world’s two largest economies (i.e., the United States at $26.9 trillion and China at $17.8 trillion, based on IMF data as at October 2023), tells us that the fourth industrial revolution has greatly influenced the type of businesses dominating global stock markets in the current era. Six of the companies in the top ten most valuable companies in the world by market capitalisation are technology companies, with Apple heading the list as the most valuable company in the world. China’s most valuable company by market capitalisation is Tencent (21st in the world), also a technology company. In 2022, Apple’s annual revenues stood at $394.33 billion, whilst Tencent’s was $82.406 billion, making them both significant contributors to the economies of America and China.
Multinational technology companies like Apple and Tencent operate across national borders, offering technologies, products and services in multiple countries. This raises national security concerns, specifically over personal data collected by such companies. In the case of America, President Donald Trump in 2020, signed an Executive Order preventing US companies from doing business with WeChat, a messaging, social media and electronic payment app owned by Tencent (the order was subsequently dropped by President Biden in 2021). The official reason given was that “the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States.” In issuing this executive order, Americans had the option of using home grown alternatives to WeChat, from home grown American companies. When the Nigerian government similarly banned the American social media platform Twitter (now X) in 2018 “for activities that are capable of undermining Nigeria’s corporate existence”, the impact of the ban on Nigerians was worsened by the absence of home-grown alternatives to replace the banned platform.
Home grown technology companies would enable Nigeria to reduce the dominance of foreign owned multinational technology firms in its technology space, whose priorities may be the promotion of their own interests over and above that of Nigeria’s. Home grown companies would also address potential issues with the cultural misalignment of technologies, products and services offered by these technology multinationals, in the different regions in which they operate. The offerings of Apple and Tencent for example, are expected to broadly align with the cultural nuances of America and China, not necessarily the local culture, contexts or values of Nigeria.
Global technology giants like Google and Meta are making significant investments in the internet infrastructure of Africa. Google is behind the $1billion Equiano undersea cable project, completed last year with 20 times the capacity of previous cables, whilst Meta is the main backer of the 2Africa project, another undersea cable project scheduled for completion in 2024. Both firms are investing because of the compelling investment case for Africa compared to other regions. According to Statista Research, Africa’s population is expected to increase from the 1.34 billion recorded in 2020, to approximately 2.5 billion by 2050, when most of the population is forecasted to be internet users. This presents an opportunity for American technology companies to significantly grow their user bases by increasing access to the internet. Whilst this may be good for the continent as a whole, Nigeria should remain mindful that the strategic interests of the foreign owned technology giants making these investments must align with Nigeria’s own strategic interests, part of which must be the evolution of its own eco-system of home-grown technology companies, competing with the global giants in Africa and beyond.
