Enormous Potential for Nigerian Software Industry

Nigeria has an unfortunate global reputation as the home of 419 scams. A typical 419 scam involves sending emails to people around the world in order to extort money from them. Online scams may show an unexpected technical sophistication for a country associated with poverty, but are a sign that some of Nigeria’s plentiful talents are being turned to illegal activities rather than building legitimate businesses.

Many argue that Nigeria is missing its potential to become an African legal software powerhouse. The Institute of Software Practitioners of Nigeria said the country’s annual consumption of software reached US $900 million in 2006, making it possibly Africa’s biggest market.

“Nigeria stands a good chance of dominating both the local and West African diaspora in a thriving global software market,” it argues.

Production of computer software is a major income earner for countries like the United States and India.

Many argue that Nigeria has enormous potential, if it can address some common problems: an absence of software quality assurance, poor investment in software development, poor product standards and a lack of proper documentation. In short: if Nigeria’s software industry takes on board global best practice, then it is sitting on a goldmine of legitimate business opportunities.

Chris Uwaje, president of the Institute of Software Practitioners of Nigeria (ISPON), told Business Day that the country’s software technology, if well retooled and strategically positioned for global competitiveness, could earn about US $10 billion annually from foreign software exchange.

He argued that developing the software industry would have many benefits for the population as a whole.

“Software has … become and will remain one of the fastest growing industries with power to enrich, and sustain national economies,” Uwaje said.

Some estimates put the world software industry and associated markets at US $1,300 billion, with 90 percent of the world’s software exports coming from the United States and Europe. Outside the U.S., U.K., Germany and Japan, the new and emerging countries within the software industry are India and China, and to a lesser extent Singapore and Malaysia.

According to market researcher DataMonitor, the worldwide software industry grew by 6.5 percent between 2007 and 2008.

DataMonitor forecasts that in 2013, the global software market alone will have a value of US $ 457 billion, an increase of 50.5 percent since 2008 (Datamonitor’s Software: Global Industry Guide).

Africa has a high proportion of entrepreneurs because people have next to no social supports to fall back on and need to do business to survive. Nigeria’s large youth population – 43.2 percent of the total – could be the driver of this new economy if used right.

Nigeria mostly imports software solutions despite having an extensive capacity in software development. If developed well, software could surpass oil as a revenue generator for the country.

According to A Profile of Nigeria’s Software Industry by H. Abimbola Soriyan and Richard Heeks, “A typical software company (in Nigeria) had between 11 and 50 customers (the average was 36 though a few firms involved with package installation had several thousand). There was a strong concentration among these customers. Almost all were private sector … There was a surprising lack of government/public sector organizations as customers (reflected above in the limited number of firms found in Abuja).”

Jimson Olufuye, president of the Information Technology Association of Nigeria (ITAN), believes that more needs to be done to support the software developers. And while on paper there is strong support for this sector in information technology policy, “In addition, we need to establish more IT parks with appropriate policies on infrastructure, human resources, incentives and business plan.”

Wahab Sarumi, chief executive officer of Wadof Software Consulting, explains the problem: “Indigenous software developers are an endangered species, abandoned by the government, neglected by its own people and bullied by the poachers from India, to whom Nigerian businesses rush to buy software applications to solve local business problems.”

Already, Nigerian software firms are offering existing off-the-shelf software that they custom package with local services. This recognizes software made in advanced countries isn’t entirely right for developing countries: and this is where business opportunities await for software developers.

But the key to success, at the end of the day, is to be the best solution on offer for the right price. James Agada, managing director of ExpertEdge Limited, believes people buy the best software for the task and don’t care where it comes from.

“If you want to sell software, the buyer does not buy the software alone, he buys the software, buys capacity to support the software, buys your capacity to improve on the software, he buys what he assumes is your mastery of the domain the software … the software must be able to compete favourably with its competitors.”

By David South, Development Challenges, South-South Solutions

Published: February 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Avoiding Wasting Food and Human Potential with ICTs

 

Creative use of information technology in the South is helping to address two very different kinds of waste – of food and of human and community potential.

In Ghana, a mobile phone-driven Internet marketplace is helping to improve efficiencies in farming and selling food. Another initiative is addressing the crisis in India’s villages by drawing on the diaspora of former villagers now living in urban environments around the world.

Finding ways to efficiently trade food is crucial to keeping hunger at bay and meeting the needs of growing populations. In a report earlier this year, the UN’s Environment Programme (UNEP) found that more than half of the world’s food is wasted or discarded.

“There is evidence … that the world could feed the entire projected population growth alone by becoming more efficient,” said Achim Steiner, UNEP Executive Director, at the launch of The Environmental Food Crisis: The Environment’s Role in Averting Future Food Crises.

Ghana is a country that has already gained a reputation as an IT leader in West Africa (www.ghanaictawards.com). Now a clever technology based in the capital, Accra, is using mobile phones to connect farmers and agricultural businesses and associations to the marketplace. By using SMS (http://en.wikipedia.org/wiki/SMS) text messages, information from the field is gathered and collated. This can include tracking what is happening on the farm, how crops are surviving the weather, and the status of food inventories day-by-day. All the data is collected by the TradeNet website and displayed with prices and deadlines for buyers and sellers to get in touch with each other. This reduces the time and cost involved in gathering updates from thousands of people across the country.

Launched in 2007, the service recently won the Information Communication Technology innovations contest by the World Summit Award (WAS) (http://www.wsis-award.org/about/index.wbp) of the United Nations’ World Summit on Information Society (WSIS).

TradeNet is currently collating market data from 13 countries and proclaims itself the largest SMS-based market information service on the continent of Africa. It has more than 12,000 registered users and covers 500 individual markets.

The service’s full name is TradeNet: Market Information on your Mobile (http://www.tradenet.biz/?lang=en), and it tracks products like ground nuts, sesame, tomato, maize and white beans. It offers market information from Afghanistan , Benin , Burkina Faso , Cameroon , Cote d’Ivoire , Ghana , Madagascar , Mali , Mozambique , Nigeria , Sudan and Togo.

Founded by its chief executive officer Mark Davies, TradeNet is run out of the internet start-up incubator Busy Lab (http://www.busylab.com/) in Accra. Busy Lab specializes in building mobile web solutions for companies and projects involved in rural media and computing.

While in India, villages are in crisis: As India’s economy has boomed, its small towns and villages have withered. Home to the majority of the country’s population, they are suffering declining populations and high suicide rates. India’s urban slums are where people are going; they are growing 250 percent faster than the country’s population. Yet so many people share some past connection with the country’s 260,000 ailing villages.

And while the world has become a majority urban place, it is acknowledged the future for the environment and agriculture rests in the health of villages.

The social media website Mana Vuru (www.manavuru.com) seeks to connect people living in cities with the villages they were born in, or where their families came from. It is about restoring the broken connection with the village in order to enhance their future development.

As Mana Vuru declares: “Villages form the backbone of our economy. True progress, growth and prosperity can only be realized when villages become self-sustainable.”

The site points out that “most villages are suffering from crippling infrastructure and some even lack the basic amenities like electricity and fresh water. We believe that every person who migrated to greener pastures and attained success and wealth should feel some sort of moral responsibility and do their bit for their respective villages.”

A project of the Palette School of Multimedia (http://www.palettemultimedia.com/) in Hyderabad – one of India’s technology hubs – the site lets former village dwellers register and start meeting and connecting with fellow members of the diaspora. Together they can network to help the village address its development challenges.

By David South, Development Challenges, South-South Solutions

Published: August 2009

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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African Bus to Tackle African Roads

Roads in many parts of Africa are rough at best, and hostile to vehicles designed with smooth, flat highways in mind. Even in countries like South Africa, where modern highways are common, a quick turn off the smooth highway to visit many communities will mean tackling makeshift dirt roads. In these conditions, buses imported from Western Europe are at a disadvantage when they hit the bone-jarring reality of potholed roads.

In the West African country of Ivory Coast, a manufacturer has decided to tackle the problem head on by designing and manufacturing a long-distance passenger bus just for African conditions.

The engineering arm of the national transport company, Sotra (http://www.sotra.ci/sotraindustries.php) (http://www.sotra.ci/index.php?rub=act), decided it could save money and create a bus better suited to African conditions.

“We want the transfer of technology in Africa,” Mamadou Coulibaly, Sotra Industries director, told the BBC. “And we want to build our own buses with our specification.

“In Europe the technology is very sophisticated with lots of electronic devices. In Africa we don’t need this.

“We just need robust buses because our roads are not very well done like in Europe. This is an African design for Africa.”

The African bus has fewer seats than European ones, and it can pack 100 people inside. It is a successful formula that has now attracted orders from other African countries.

Three buses are already in operation and more are in the works on a production line. They are designed and made in the largest city, Abidjan, building on an existing chassis and engine base made by European truck company Iveco. Sotra plans to build 300 buses a year in three models: coach, urban and tourist.

“I think it’s a good thing,” Isaac Gueu, an Abidjan accountant, told the BBC. “It’ll help students to move about in more comfort.”

Not only is the accomplishment impressive as an example of made-in-Africa manufacturing, but it was also completed while the country was going through a civil war and political crisis.

Sotra is an experienced manufacturer, and built its reputation with reliable boat-buses (http://tinyurl.com/bot6fv) that ply the country’s lagoons.

Africa’s roads lag behind the rest of the world: In 1997, Africa (excluding South Africa) had 171,000 kilometres of paved roads — about 18 percent less than Poland, a country roughly the size of Zimbabwe. As efforts to complete the trans-African highways continue (http://en.wikipedia.org/wiki/Trans-African_Highway_network), the quality of existing roads is deteriorating. In 1992 about 17 percent of sub-Saharan Africa’s primary roads were paved, but by 1998 the figure had fallen to 12 percent (World Bank). More than 80 percent of unpaved roads are only in fair condition and 85 per cent of rural feeder roads are in poor condition and cannot be used during the wet season. In Ethiopia, 70 percent of the population has no access to all-weather roads.

Africa also has an appalling road accident rate, mainly attributed to the use of minibuses and other makeshift buses. Each year the number of road deaths and disabilities due to road accidents rises. It is estimated if things carry on as they are, the number of yearly traffic deaths across the continent will reach 144,000 by 2020, a 144 percent increase on today’s deaths.

A properly designed bus is a safer option than trying to pack passengers into a tippy minibus.

On top of making road passenger travel safer and more comfortable, Sofra is creating jobs in Africa and reducing dependence on imports. Beholden to importing sophisticated goods from outside the continent, Africa’s wealth is spent to the benefit of others, and at the expense of high-value jobs at home.

Coulibaly is confident Sotra will reach its goal.

“We have been to school in Europe and we think that we are able today to build our own buses; there are no special difficulties,” he said.

In Nigeria, Innoson Vehicle Manufacturing Company Limited (INNOVEMCO) (http://innosongroup.com/ ) is, in collaboration with Chinese manufacturers, building a huge auto plant in Nnewi (http://en.wikipedia.org/wiki/Nnewi) where a wide range of commercial and utility vehicles will be produced for the Nigerian market and some countries in West Africa.

By David South, Development Challenges, South-South Solutions

Published: February 2009

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Africa’s Fast-Growing Cities: A New Frontier of Opportunities

According to a new report by the International Institute for Environment and Development, Africa now has a larger urban population than North America and 25 of the world’s fastest growing big cities. Europe’s share of the world’s 100 largest cities has fallen to under 10 percent in the past century.

Counter to common misperceptions about what is luring people to big cities, the report’s author, David Satterthwaite, said it isn’t because governments and aid are attracting them: government “policies leave much to be desired as they tend to neglect the urban poor, leading to high levels of urban poverty, overcrowding in slums and serious health problems. Governments should see urbanisation as an important part of a stronger economy and their expanding urban population as an asset, not as a problem.”

But global perceptions of Africa are changing. The Mo Ibrahim Foundation has listed the most efficiently run African economies, with a strong correlation between good governance and higher growth rates (Mauritius, Seychelles, Botswana, South Africa, Namibia, Ghana and Senegal).

In most of urban French West Africa, extensive interviews with micro-entrepreneurs and micro-finance practitioners found that most operating micro-enterprises in the informal economy are entrepreneurs by necessity, and that their most basic needs drove their business activities and behaviours. Success was held back by lack of capital, poor training, and a general aversion to risk (Faculty of Management, Dalhousie University).

While access to capital has been identified as the key factor in opportunity, entrepreneurs aren’t even waiting for microfinance institutions to help them. “I started this business of selling chips (French fries) two years ago using money we raised as a group of 30 women,” said Mary Mwihaki, 27, who lives in the Mathare slum area outside Nairobi.

Each member of her group of women contributes about US 30 cents a day and the resulting US $9 is given to a different member of the group on a rotating basis, she told IRIN news agency. Mwihaki waited three months to raise the US $27 she needed. She joins many other women across the country taking the same approach to raising capital.

For some entrepreneurs, it is just the proximity to a buzzing urban atmosphere that is a spur to action. One clothes seller told the African Executive he has been able to make enough money to get a house built just selling second hand clothing. Twenty-three-year-old Henry Mutunga in Nairobi, Kenya takes advantage of the high turnover of the city’s Machakos Country bus terminal to sell second hand clothes.

“After months of searching for a job, I asked myself, ‘Why am I wasting the business studies knowledge I acquired in school?’ I was not comfortable being left in the house every morning, with nothing to do, while my uncle went to work in order to feed me and pay the house rent. I got hooked to the urban mentality and tried my hand at selling trousers.”

Now with two employees, he is able to rent his own house, and is able to use extra money to have his own house built. He urges other youth to become employers, not employees.

At the technological end of entrepreneurship, in Nairobi, Kenya, Mumbi’s Dial-a-Cab company is joining 20 fleet firms in the country to adopt a new mobile phone-based vehicle-tracking technology developed by two young African IT entrepreneurs, Waweru Kimani and Paul Mahiaini. The technology allows management to know how low fuel is, which car has gone where, when a car has been hijacked, what car doors are open, how long it has been stopped, and where it is located. Impressively, it also allows management to stop the car at the touch of a button if it has been stolen. It costs US $570 to install, and costs US $40/month to use.

Other entrepreneurs are piggy backing their success on the booming housing markets in Angola, Ivory Coast, Liberia, Nigeria, Congo, Mali, Morocco, Tunisia, Botswana, Ghana, Mozambique, Rwanda, Kenya, Mauritius, Uganda, Algeria, Egypt, Senegal: all creating enormous opportunities for entrepreneurs providing other services, like furniture, appliances, insurance, landscaping, security, architecture etc.

And the giant US internet search engine Google is now setting up operations in West Africa, based in Dakar – a sure sign that they see this as a new boom market. And Indian investment in Africa has also dramatically shot up this year, according to mergers and acquisitions magazine, The Deal. In 2005, US $81 million was invested in Africa. In 2006, US $340 million; and in 2007, US $294 million.

By David South, Development Challenges, South-South Solutions

Published: November 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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