5 Ways in Which Nigeria can Alleviate the Global Tech Shortage

The global digital skills gap has hit an inflection point, where demand for IT talent is outpacing an already short supply. In 2020, 78% of global IT leaders have indicated that their organizations are suffering from a digital skills gap – a 145% increase since 2016. Almost US$11,5 trillion in cumulative GDP growth will be lost among 14 G20 countries. In a digital-first world, these are alarming statistics.

As Africa’s leading Information and Communications Technology (ICT) market, Nigeria can make a significant contribution to remedying the world’s digital skills gap predicament. In addition, Nigeria’s emerging IT Outsourcing (ITO) sector presents pockets of untapped talent that are readily available to narrow IT staff shortages faced by global organizations.

Based on extensive research, this article will unpack five ways in which Nigeria can play a role in minimizing the world’s digital skills shortage, particularly in tech support and software development.   

1. Nigeria’s burgeoning ICT sector

Nigeria has 82% of Africa’s telecoms subscribers and 29% internet usage. What’s more, Sub-Saharan Africa is projected to enroll an additional 167 million internet subscribers by 2026, 55% of which will come from Nigeria. With 79 million broadband and 187 million voice subscribers, Nigeria has a teledensity of 97.9%.

‘’Huge private sector investment drives and the government’s focus on digitizing the local economy have stimulated Nigeria’s notable growth strides in ICT activity,’’ says Amal Hassan, Global Founder and CEO of Outsource Global. As such, Nigeria’s ICT sector accounts for a considerable 17.83% of the country’s GDP, with a total estimated market value of US$79 billion, the largest in Africa.

2. Nigeria’s untapped ICT talent

Nigeria’s ICT workforce size is a direct reflection of its continental status as an ICT giant, employing an estimated 497,000 ICT workers, dwarfing other leading regional ICT locations.

Estimated ICT Workforce Size for Top Global Business Services (GBS)/BPO African Locations:

Source: 2021 Africa GBS Benchmarking & Market Report and IDC

Of the 497,000 ICT workers in Nigeria, over 114,000 are software developers, most of which are youth between the ages of 18 and 35. To that end, Nigeria presents an ample supply of energized, tenacious software development specialists for global organizations.  

Amal suggests the supply of tech support worker could be substantial: ‘’Although unknown, the number of tech support workers may be significant, due to the practice of rapid tech support training and deployment initiatives. Several Nigerian-based ITOs take on graduates with a degree and upskill them in IT skills through a series of training ‘boot camps’, after which they are deployed in a tech support role. The ability to swiftly deploy graduates at scale into tech support operations is highly conducive to fulfilling global tech support shortages.’’

Feeding Nigeria’s ICT talent pipeline are 62,460 graduates entering the workforce with relevant ICT degrees. Consequently, the strong inflow of young ICT graduates has created an explosion of tech start-ups across the country, particularly in its economic center, Lagos.

A sustainable skills injection has broadened Nigeria’s ICT service capabilities, covering base services, such as IT/tech support, to more complex functions, such as cloud computing, data management systems and business intelligence and analytics.

Source: 2021 Africa GBS Benchmarking & Market Report and IDC

3. Cost benefits

Salary costs for Nigeria’s ICT talent are 77% lower compared to those in major source markets, on average. On a more granular level, a Nigerian IT help desk agent is 81% more cost-efficient, while software developers cost 79% less, on average, compared to source markets.

‘’Nigeria’s attractive cost arbitrage for outsourced tech support and software development roles enables an accessible channel for global enterprises to plug critical digital talent shortages. Simultaneously, they are also able to enhance their bottom-line profitability,’’ says Amal.  

Source: 2021 Africa GBS Benchmarking & Market Report and IDC\

4. Nigeria’s enabling ICT infrastructure

Supporting Nigeria’s ICT market and talent growth has been its developing, yet robust ICT infrastructure. With very little constraining technology legacy issues, Nigeria’s newly rolled-out ICT infrastructure has subsequently ‘’leapfrogged’’ older ones.

Core to Nigeria’s ICT infrastructure advancements is its global connectivity, improving from a single submarine cable with a 340-gigabyte capacity in 2001 to five cable systems with a combined capacity of over 40 terabytes.

More undersea cables are planned to link Nigeria to the global connectivity grid, including the GLO 2 submarine cable and Google’s Equiano subsea cable. These cables will support further growth of 4G, 5G and broadband access to millions of Nigerians and lower internet costs further.

Lower connectivity costs have supported the growth of 14 Special Economic Zones (SEZs) and technology parks across Nigeria. The Abuja Technology Village is Nigeria’s specialist science and technology park, with ICT as one of its focus sectors. A core feature is the technology park’s Techpool initiative, a human capital mobilization program ensuring a sufficient pipeline of skilled ICT workers for tenant tech companies.

Thriving alongside Nigeria’s technology parks are over 90 tech hubs, acting as incubators, accelerators and shared workspaces for digital ventures and tech entrepreneurs. Some of these have been established through global brands, such as Microsoft’s African Development Center (ADC) based in Lagos.

More tech hubs will be sprouting across the country, funded by global brands. Cisco Systems is developing six internet of things (IoT) labs across Nigeria, focusing on building digital skills among Nigerian students. IBM’s Digital Nation Africa (IBM DNA) program will be launching in Nigeria, imparting practical tech knowledge to students to enhance their digital careers, especially in tech support and software development.

5. Nigeria’s ITO strengths and opportunities

Nigeria’s progressive ICT infrastructure development is borne to the efforts of a network of synergized industry bodies and government departments. The forefront body developing the ICT, as well as the broader GBS sector, is the National Information Technology Development Agency (NITDA). The body has coordinated successful partnerships between local ICT companies and global investors, as well as the establishment of government and private sector-led incubator hubs, youth innovation programs, and science-technology parks.

Industry cooperation has fostered the growth of e-services and cloud computing, which have translated into increased demand for data services. Opportunities in major data center offerings have surfaced in Nigeria, particularly in software as a service (SaaS), platform-as-a-service (PaaS), infrastructure-as-a-service (IaaS), and back-up-as-a-service (BaaS).

Another factor shaping Nigeria’s ICT market is its fast-developing FinTech sector. The increasing adoption of mobile phones and rise in e-Commerce users has spurred the widespread use and acceptance of digital financial services.

Conclusion

Nigeria’s vibrant, budding ICT market positions the west African nation as a tech support and software development destination of choice for global organizations. The growing ICT workforce, strengthened by a robust skills pipeline, presents to the world a largely untapped tech support and software development talent pool.

Facilitated by industry bodies and key digital market segments, ICT infrastructure development has been an enabler in nurturing Nigeria’s tech talent.

Nigeria’s momentous headway in its ICT growth path is yet to be fully realized. As Amal points out, ”The fact that Nigeria’s ICT infrastructure gap is still substantial indicates the looming potential for its ICT sector and talent growth, especially in tech support and software development.’’

Sources:

Nigeria – Country Commercial Guide. Information and Communications Technology. (2021, October 13). Retrieved from International Trade Administration.

2021 Key Insights in Africa’s Software Development Sector. (2021).

Mind the [Skills] Gap. (2021, January 2021). Retrieved from McKinsey & Company.

2021 Knowledge Executive Africa GBS Benchmarking & Market Report and IDC.

The Digital Skills Gap Comes at a Cost: 14 G20 Countries Could Miss Out on $11.5 Trillion Cumulative GDP Growth. Retrieved from Salesforce.

Three-quarters of global IT decision-makers facing skills gaps. (2021, November 15). Retrieved from Computer Weekly.