COVID-19 And The Growth Of Technology In Nigeria — FBNQuest

Must Read

How To Block Your Bank Account And SIM Card In Case Of Emergency

Losing your phone and wallet or having them stolen can be very frustrating. However, in case that happens to...

FG, States, LGAs share N528.39bn FAAC allocation in Jan 2021

The Federation Account Allocation Committee (FAAC) disbursed the sum of N619.34bn to the three tiers of government in December...

List of United Bank for Africa (UBA) Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...
- Advertisement -

It is often said that the COVID-19 virus has brought an irreversible change in working practices and lifestyle and that the main beneficiaries are the likes of Alphabet, Apple, and Facebook as well as mobile network operators (MNOs).

This has been corroborated in Nigeria’s national accounts, where we see that the only sector to have delivered robust growth through COVID-19 has been information and communications. It grew by 11.1 per cent y/y in 2019, which it managed to push up to 12.9 per cent last year. (Finance and insurance achieved 9.4 percent in 2020 on the back of strong loan book expansion in the first half under regulatory pressure.)

We can see the change in data from the Kenyan Central Bank. When we compare April-December 2020 (life with COVID) with July 2019-March 2020 (pre-COVID), we find a 10 per cent decline in the value of card transactions. For obvious reasons, the fall in point of sales transactions was still lower.

Digital has been the predictable winner: the number of registered digital bank accounts rose by 11 per cent relative to the pre-COVID period and the cash transferred through mobile bank agents at more than twice the pace. We note that the central bank reacted smartly to COVID in March (2020) by cutting the fees, and increasing the upper limit on transactions.

- Advertisement -

The operating environment for MNOs has been more challenging in Nigeria. They were told to halt the sale of SIM cards in December. All new cards must now be linked to national identification numbers (NINs) by 06 April. We had thought that perhaps one reason for the measures was to collect revenue from a soft target but have been persuaded otherwise. The link, which already exists in Kenya, has security implications since the NIN is required for the issue of a passport, opening of bank account and voter registration.

Read Also:  African Equity Market: On The Path Of Recovery

From the operators’ perspective, the best we can say is that the process is finite, that it is proceeding well according to the regulator and that it affects all players in the industry. More generally and again helped by the COVID, Nigeria has seen good volume growth and investment activity across the technology segment, notably in fintech. Two Nigerian payment platforms (one since acquired by US interests) diversified into e-commerce last year, and we read in the local media that another two are in the process of following their example.

The tech sector has been boosted across the world by COVID: we work from home, talk to our colleagues and clients virtually, follow webinars, attend e-school and support e-commerce for our food, clothing and entertainment. Once we are free (not of COVID-19 but the restrictions put in place to control it), we will revert to some of our old habits such as going to the cinema and eating at a restaurant.

Read Also:  COVID-19: So Energy Donates To Tema General Hospital (Photos)

Nonetheless, there has been an underlying shift in behavioral preferences. This has been more marked with the young, who dominate in Nigeria and other emerging economies. The challenge for the tech sector is to broaden access to its products. A minority in Nigeria does not have access to a mobile, often for reasons of connectivity, and a more substantial minority is unbanked. Another result of COVID-19 has been a rise in poverty levels, estimated by the World Bank at more than 15 million Nigerians, which adds to the formidable task of the tech companies.

- Advertisement -
COVID-19 And The Growth Of Technology In Nigeria — FBNQuest - Brand SpurCOVID-19 And The Growth Of Technology In Nigeria — FBNQuest - Brand Spur

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

- Advertisement -


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

COVID-19 And The Growth Of Technology In Nigeria — FBNQuest - Brand SpurCOVID-19 And The Growth Of Technology In Nigeria — FBNQuest - Brand Spur

Latest News

Can Nigeria Achieve Sugar Self-sufficiency?

Nigeria's sugar industry dates back to the 1960s. Domestic production, however, only supplied about c.2.8% of national sugar consumption in...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -COVID-19 And The Growth Of Technology In Nigeria — FBNQuest - Brand SpurCOVID-19 And The Growth Of Technology In Nigeria — FBNQuest - Brand Spur