Nigeria must make deliberate investment to support technology and innovations to enable it achieve productivity, gain required mileage in growth and inclusive development, Uche Orji, managing director, Nigeria Sovereign Investment Authority (NSIA), said on Tuesday.
Speaking during the BusinessDay breakfast meeting that focused on Macroeconomic Outlook, Innovation & Technology in Abuja, Orji said the Authority, which now has technology and innovation as its newest area of investment, had just concluded a $40 million to drive growth and development of tech firms and start-ups in Nigeria.
“We believe that the existence of a developed venture capital sector is very important in driving technology. We are investing in this because we believe that we must drive capital formation at this phase that will help these companies innovate and survive overtime, because these companies will be the future of Nigeria. The tech fund looks at new ventures in Nigeria and NSIA is the leading investment in that,” Orji stated.
According to Orji, the Nigerian technology ecosystem can only grow sustainably and compete globally if there is a developed venture capital sector to provide companies with needed funds to survive overtime.
With the mandate of developing infrastructure and serving as the custodian of economic resources for the next generation of Nigerians through the Nigeria Infrastructure Fund and Future Generation Fund, the NSIA is committed to investing in emerging opportunities that enhance the savings base of the next generation, including technology and innovation, he said.
Recently, the NSIA launched a $200 million Innovation Fund, co-investing with its partners, with a view to investing in start-ups and ventures that seek to optimise emerging opportunities from the changing industries, sectors, and markets.
He said the NSIA was taking a new focus on technology and innovation, considering how countries had leveraged it to drive their economy. His words: “Our view is anchored on a few pillars; first, we believe that innovation and technology present an opportunity for Nigeria to catch up with the rest of the world. We can leapfrog and get more of the fourth industrial innovation, which was largely driven by connectivity.
“Secondly, we believe that we have some endemic advantages in technology and innovation in Nigeria, and this is driven by the fact that we have digital natives, with 50 percent of our population below the age of 20, which means they can be taught easily and they can learn these tech things.
“Thirdly, we believe that the cycle in pendulum of technology is swinging closer to Nigeria, it’s getting more expensive to invest in India, it’s becoming more expensive for outsource programming work in India, so we see people starting to move towards Africa and we should be able to capture it.
“Fourthly, the world is now recognising the potentials of tech in Africa – we have three unicorns but we need to be humble about that.”
Orji noted that the value of US tech companies in stock market had doubled between 2010 and 2020, reaching some $9 trillion, more than the entire market capitalisation of Europe. He noted that in the US in 1998 tech accounted for 7 percent of US stock, but now accounts for 70 percent of US capital market.
“This speaks to you about what has happened between 1998 and 2021 and gives you an idea of what happens when countries decide to invest in innovation consistently overtime,” he said.