FG seeks $500m tech innovation fund from AfDB
• Bank claims mobile ecosystem aids $500b tax generation
As part of efforts aimed at increasing the competitiveness of Nigeria’s Information and Communications Technology (ICT) sector, the Federal Government is seeking the sum of $500 million technology innovation fund from the African Development Bank (AfDB).
The Vice President of Nigeria, Prof. Yemi Osinbajo, disclosed in an interview with journalists, at the just concluded first Africa Investment Forum (AIF), organised by AfDB, in Johannesburg, South Africa.
Osinbajo said the move is part of the plans to further deepen the country’s ICT sector and make it more competitive.
Besides, the VP said the Federal Government had directed the Bank of Industry (BOI), to put in place a $10 billion technology fund to support techpreneurs and start-ups.
“We have also constituted the technology and Creativity Advisory Council, where we have brought together lots of the young men and women in ICT, entertainment and creativity and I have the privilege of chairing.
“That Council at the moment is working on policies. We need new policies to drive new wave of growth, but the right policies are still missing. So, there is money and the readiness of the Federal Government to get things done very fast in the ICT sector.
“Approaching the AfDB for technology innovation fund was another move we are taking, knowing fully well that the bank has invested so much in innovation in Rwanda, Ivory Coast and some other African countries,” Osinbajo stated.
Meanwhile, the VP has urged banks to get more creative because of the disruptions coming financial technology companies (Fintechs).
He said the “Fintech companies, as you know, are challenging some of the old laws on banking and all of that.
“The major issue is that technology is clearly going to disrupt the financial space, and is doing so already, so banks have to reform.
“They have to invest in some of the Fintech companies themselves, and they have to see this revolution as inevitable.
“I think that what we are seeing today is the reform around that space, and many of the banks are looking up and understanding that this is going to happen, and it’s already happening,” Osinbajo said.
Meanwhile, the AfDB disclosed that in 2017, the wider mobile ecosystem supported a total of 29 million jobs (directly and indirectly), and made a substantial contribution to the funding of the public sector, with almost $500 billion raised through general taxation, and $25 billion through mobile spectrum auctions.
According to AfDB, mobile phone subscriptions have grown from 87 million on the African continent in 2005, to a staggering 760 million in 2017, growing 20 per cent per annum. Depending on the country, the bank said mobile network coverage ranges from 10 to 99 per cent with an average of 70 per cent.
It stressed that in 2017, mobile technologies and services generated 4.5 per cent of GDP globally, a contribution that amounted to $3.6 trillion of economic value added. By 2022, this contribution will reach $4.6 trillion, or five per cent of GDP, AfDB stated.
In the mobile money space, the bank said the overall industry direct revenues rose to over $2.4 billion in 2017, and is currently processing an average of $1 billion per day.
AfDB revealed that 7. 66 per cent of the combined adult population of Kenya, Rwanda, Tanzania, and Uganda use mobile money on active basis.
It revealed that in 2017, Western and Middle Africa were the fastest growing areas of sub-Saharan Africa, led by tremendous growth in registered accounts in countries like Ghana, Côte d’Ivoire, and Cameroon.
According to AfDB, the ICT sector received the lowest amount of allocated spending across Africa, with a total of $853 million; the sector had by far the highest level of growth with an increase of 50 per cent between 2015 and 2016.