A new report by the World Bank Group (WBG) has canvassed reforms in Nigeria’s digital economy, saying by leveraging Information Communication Technology (ICT), the country has the potential for economic diversification and job creation.

The multilateral financial institution said digital financial services alone could be transformative and capable of creating over three million new jobs in the next few years.

In its latest ‘Nigeria Economic Update’, the Bretton Woods institution said Nigeria currently uses only four per cent of its internet capacity.

The update with the theme, ‘Jumpstarting Inclusive Growth: Unlocking the Productive Potential of Nigeria’s People and Resource Endowments,’ said at the end of 2018, fixed broadband in the country had a household penetration rate of 0.04 per cent, below the Sub-Saharan African (SSA) average of 0.6 per cent and far below the world average of 13.6 per cent.

Citing the International Telecommunications Union (ITU), the Nigeria Economic Update said mobile broadband (3G) coverage reached 54 per of the population against the SSA average of 62.7 per cent, adding that 5G coverage is also very low and concentrated in urban areas.

“According to the State of ICT in Nigeria 2018, there is a serious digital gap in mobile broadband, with just over 29 per cent of Nigerians owning a smartphone, 45 per cent a feature phone and 32 per cent a basic phone.
“The gender gap in mobile phone is also significant, with a higher probability of mobile phone owners among men than women. In 2018, 19.9 per cent of Nigerians used their cellphone to connect to the internet. Overall internet usage in Nigeria stands at 27.7 per cent–above the 22.1 per cent average for Africa (ITU 2018),” the Nigeria Economic Update said.

The multilateral financial institution observed that Nigeria lacks digital skills, ranking 121st out of 139 countries in Global Competitiveness Report’s assessment.

“Thus, the poorest are excluded from the benefits of the digital world. Of the total population of around 200 million, the labour force is estimated to be about 90 million, with a literacy rate of 51 per cent.
“Although Nigeria does not participate in international or regional student assessments, after completing grade 4 only 66 per cent of public school students can read at least one of three words and only 78 per cent can add single digits.

“Nigeria trails Ghana, Kenya, and Senegal in the quality of its Maths and science education. Such shortages of foundational skills will make it difficult for Nigeria to heighten digital literacy and will lower the chances it can take advantage of the opportunities the digital economy offers,” the WBG report said.

It noted that Nigeria’s Economic Recovery and Growth Plan (ERGP) demonstrates government’s intent to support development of the digital economy, adding that the medium-term economic blueprint adopted the Nigeria ICT Roadmap 2017-2020 and the Nigeria ICT Innovation and Entrepreneurship Vision (NIIEV) released in 2018.
The NIIEV, it added, sets up three ambitious goals to achieve in 2025.

Through reforms in the digital economy, the World Bank said Nigeria could catalyse private investments and job creation, noting that such reforms would include deployment of wholesale, carrier-neutral, shared infrastructure to increase 4G deployment, creation of a Wholesale Open Assess Network (WOAN) and simplification of digital rights of way.

Others are digitisation of all government payments, formal teacher training in the use of technology to enhance learning, seeking global partners to gain global standard certification for local ICT and better regulation of mobile money.

On access to finance, the World Bank noted that curbing the use of quasi-fiscal operations by the Central Bank of Nigeria (CBN) would both alleviate distortions in the allocation of credit and improve policy predictability.
It noted: “The central bank has attempted to directly increase the flow of credit to targeted sectors through development finance operations, with the aim to overcome the shallowness of the commercial bank credit market.

“Many of these operations are agricultural development schemes intended to support small rural enterprises and smallholder farmers. Regardless of their merits as development policies, financing these interventions through the CBN rather than the federal budget reduces the transparency of fiscal policy and the effectiveness of monetary policy.”