From Connectivity to Competitiveness: How Nigeria’s Telecom Sector Can Bolster a Global Tech Hub

Globally, tech hubs like Silicon Valley in the United States, Bangalore in India, and Tel Aviv in Israel have become synonymous with innovation, entrepreneurship, and technological advancement, attracting talent, investments, and startups from all corners of the world.

A common factor in their success is the presence of a solid telecom infrastructure, providing the essential backbone for communication, data transfer, and technological innovation.

Silicon Valley’s explosive growth in the late 20th century wasn’t just about having innovative, smart and goal-driven entrepreneurs but also by access to early internet technologies and reliable broadband connectivity.

Similarly, Bangalore’s transformation into India’s Silicon Valley was closely tied to investments in IT and telecom infrastructure that enabled seamless global communication. 

Tel Aviv, now a global leader in cybersecurity and digital technologies, owes much of its success to government initiatives that prioritised telecommunications infrastructure, creating a fertile ground for tech-driven growth.

Hence, we can say cutting-edge telecom infrastructure is a non-negotiable foundation for any region aiming to become a global tech hub. It is the conduit through which innovation flows, enabling startups to scale, research to advance, and industries to thrive. Without this foundational infrastructure, even the most talented tech sectors are limited in their potential for global competitiveness.

The Connectivity Foundation for Nigeria: What Has Been Achieved?

The journey of Nigeria’s telecom industry began with the deregulation of the sector in 2001, which brought about private investments and competition. This led to the introduction of the Global System for Mobile Communications (GSM), bolstering mobile telephony in the country. 

Companies like MTN, Glo, and Airtel capitalised on this deregulation, quickly expanding their networks and making mobile telephony accessible to millions of Nigerians.

The launch of the first submarine cables, such as MainOne and Glo-1, further enhanced Nigeria’s connectivity by providing a strong backbone for internet services, enabling high-speed data transmission across continents. This development was a game-changer, allowing businesses, startups, and individuals to participate in the global digital economy.

The proliferation of Internet Service Providers (ISPs) and the subsequent increase in internet penetration was another achievement. By 2019, Nigeria had moved from 270,000 cellular subscriptions in 2001 to 185 million. 

The deployment of 5G technology is the latest leap forward, ushering in a new phase of ultra-fast internet and advanced digital services. This technology is expected to enable great innovations such as smart cities, IoT, and edge computing, supporting Nigeria’s mission to gain global competition when it comes to Africa’s digital growth.

Current Achievements

Today, Nigeria has a mobile penetration rate of over 90.7%, with more than 200 million active mobile connections. Internet access has also grown, with approximately 50% of the population now online, a great improvement in digital inclusivity. 

Federal government Initiatives to improve rural connectivity, such as the National Broadband Plan and Universal Service Provision Fund (USPF), have yielded positive results, bridging the digital divide and ensuring that even remote areas benefit from modern telecom infrastructure.

However, while connectivity is an important component of a thriving tech industry, it is not the sole determinant of global competitiveness. 

There remain issues related to the quality of service—high data costs, relatively low average internet speeds, and frequent disruptions—that need to be addressed for Nigeria to compete effectively with global tech hubs. 

Beyond the infrastructure, other factors such as a supportive regulatory environment, access to capital, and the availability of a skilled workforce are equally of importance.

Beyond Connectivity: The Competitiveness Prospects

The Digital Economy Shift

Transitioning from basic connectivity to a globally competitive digital economy demands more than inclusive internet access. It involves leveraging digital technologies to facilitate economic growth, innovation, and global partnerships. 

Nigeria, with its steadily growing tech industry, stands on the brink of this digital boom, bringing huge opportunities in sectors like financial technology (Fintech), e-commerce, and digital payments.

The Fintech sector, in particular, has been one of Nigeria’s most dynamic success stories. Startups like Flutterwave and Paystack are leading a financial advancement, offering seamless digital payment solutions for both local and international markets. 

Flutterwave has facilitated over 140 million transactions worth more than $9 billion, revealing its enormous potential for digital financial services. Likewise, Paystack’s $200 million acquisition by Stripe reiterates the global recognition of Nigeria’s Fintech sector and its ability to attract major international players.

In addition to Fintech, the e-commerce sector is ripe for growth. Digital marketplaces like Jumia have bolstered access to goods and services, allowing businesses to reach customers beyond geographical limitations. 

This growth doesn’t just boost economic activity but also ensures innovation and entrepreneurship, as more Nigerians leverage online shopping and digital payments. The proliferation of e-commerce platforms, combined with the ease of digital transactions, is changing Nigeria’s retail sector and building a more connected, digital environment.

However, the true competitive edge for Nigeria lies in its ability to move beyond digital access and become a hub for digital innovation, data-driven industries, and scalable tech solutions. This involves a coordinated effort to integrate artificial intelligence, cloud computing, and blockchain into the entire economy, driving productivity and helping the nation gain global recognition in the tech industry.

Talent Development & Retention

To fully attain a successful digital economy and the prosperity it brings, Nigeria must prioritise talent development and retention. While there’s potential in the tech sector, there’s also a m growing risk of losing skilled professionals to international opportunities if local prospects are not sufficiently attractive.

Building a competitive digital workforce starts with strengthening educational frameworks that emphasise STEM (Science, Technology, Engineering, and Mathematics) disciplines. Programs like Andela have already taken good steps in training software developers and building them with the skills needed to thrive in global tech markets. 

However, retaining this talent requires more than just technical education. Nigeria needs to build a supportive ecosystem that includes access to capital, mentorship, and a regulatory environment conducive to innovation.

Preventing brain drain is essential to sustaining long-term growth. The telecom and tech sectors must create pathways for local businesses and startups to thrive, ensuring that skilled professionals see opportunities to grow and innovate within Nigeria. 

Initiatives that connect young talent with investors and seasoned entrepreneurs could be essential in building a thriving local ecosystem. Building innovation hubs, startup incubators, and public-private partnerships will help Nigeria create an environment that incentivises its brightest minds to remain and contribute to the country’s digital acceleration.

Key Pillars for Competitiveness: What’s Missing?

Reliable Infrastructure

Despite progress in expanding connectivity, the country’s prospects as a global tech hub is constrained by the lack of reliable infrastructure. 

One of the most pressing issues is the inconsistent power supply. Frequent power outages, which are a routine occurrence across the country, severely disrupt both business operations and daily activities. 

For telecommunications and internet services to function optimally, reliable electricity is indispensable. Without it, the effectiveness of digital infrastructure is diminished, leading to inefficiencies that affect everything from data centres to mobile towers.

Again, rural areas remain under-served, with limited broadband access increasing the urban-rural digital divide. This lack of inclusion causes a huge barrier to growth in regions outside of major cities. 

Comparatively, Nigeria’s average internet speeds lag behind those of other emerging tech hubs. According to the Speedtest Global Index, as of 2024, Nigeria ranks 99th in mobile internet speed globally, with an average download speed of around 20 Mbps. In comparison, other emerging markets like India are averaging over 35 Mbps. This gap in speed and reliability limits productivity and innovation, making it harder for businesses to compete on a global scale. To fully leverage the possibilities of its connectivity, Nigeria must address these infrastructure shortcomings, particularly in power and broadband accessibility.

Innovation Ecosystem

While Nigeria is known for its entrepreneurial spirit, the country’s innovation ecosystem is still developing and lacks the necessary comprehensive support to facilitate large-scale technological advancements. 

Telecommunications companies must go beyond just providing internet access. They should play a key role in building the foundational infrastructure necessary for innovation—such as investing in data centers, cloud infrastructure, and establishing more innovation hubs.

Data centres, in particular, are essential for supporting the growth of emerging technologies like artificial intelligence (AI), blockchain, and the Internet of Things (IoT). Currently, Nigeria has a few key data centres, such as Rack Centre and MainOne, among others, but the country needs far more to meet growing demand. Without these facilities, Nigeria risks falling behind as other African countries, like Kenya and South Africa, aggressively expand their digital infrastructures.

Moving further, ensuring an innovation ecosystem requires collaboration between the private sector, government, and academic institutions. The success of tech hubs like Silicon Valley and Israel’s Startup Nation has shown the value of building an environment that encourages experimentation, provides funding opportunities, and connects startups with industry mentors. Nigeria can replicate such success, but it must scale up its innovation initiatives, particularly in areas such as AI, health tech, and fintech, to remain competitive.

Policy Frameworks & Regulation

Nigeria’s regulatory sector determines the direction and growth of its telecom sector. The Nigerian Communications Commission (NCC) has taken steps to create an enabling environment, but more needs to be done to keep up with the pace of technological advancement. 

A well-defined, forward-thinking regulatory framework is essential for ensuring innovation, encouraging investment, and protecting consumer rights.

The success of other nations are useful models. For example, India’s Digital India initiative—aimed at making the country a digitally empowered society—has resulted in an explosion of internet access, digital payments, and e-governance. 

Estonia’s e-Residency program is another prime example of how visionary regulatory frameworks can attract global investors and entrepreneurs by providing seamless digital services.

For Nigeria to thrive, the NCC must continue promoting fair competition, especially in the face of emerging technologies. Regulations need to be adaptive to developments in 5G, AI, and fintech, ensuring that the country stays at the fore of digital innovation. 

Policies that encourage private sector participation in building tech infrastructure, while also ensuring consumer data protection and cyber security, will be essential. 

Can Nigeria’s Telecom Sector Set the Pace for Economic Prosperity?

As we reflect on the subject matter at hand, we are inspired by the nostalgia, enthusiasm, challenges, and opportunities that Nigeria has encountered through its telecom industry in recent years.

This inspiration is reiterated in the words of Dayo Oketola, the former Editor of The Punch Newspaper, in his newly launched book, “The Catalyst: Nigerian ICT Evolution Through a Journalist’s Lens.” Oketola emphasizes that Nigeria’s telecommunications sector has attracted over $70 billion in investments and generated over 500,000 jobs in the country.

President Olusegun Obasanjo, who played a key role in the sector’s inception, chronicled the leapfrog development brought forth by this industry. His insights align with the huge opportunities that lie ahead.

Again, the Bill & Melinda Gates Foundation’s report, “Innovating to Zero!” highlights the essential role of digital technologies, including telecom, in tackling global challenges such as poverty and climate change. 

The publication underlines how leveraging innovation can drive sustainable development and economic growth, while improved connectivity enhances access to education, healthcare, and financial services, empowering underserved communities. Continued investment in technology is essential for facilitating solutions that combat inequality and promote progress.

With this context, we must examine the ripple effects of Nigeria’s telecom industry on the economy, particularly in the following areas:

1. Connectivity and Economic Growth

Improving telecom infrastructure can significantly boost economic development in Nigeria. With a growing mobile phone penetration rate—over 195 million active connections—enhanced connectivity enables businesses, particularly small and medium enterprises (SMEs), to access markets, streamline operations, and optimize supply chain management. This connectivity drives productivity and innovation across various sectors, from agriculture to manufacturing.

2. Education and Health

Telecommunications are important in enhancing education and healthcare delivery, especially in rural areas. A significant portion of the population still lacks access to quality education and healthcare services. Mobile technology can bridge this gap; e-learning platforms and telemedicine services provide vital resources, allowing students to learn remotely and patients to receive medical consultations without extensive travel.

3. Financial Inclusion

Nigeria is home to one of the largest unbanked populations globally. Telecom can improve financial inclusion through mobile banking and digital payment systems. Initiatives like mobile money services empower individuals to conduct transactions, save, and access credit, lifting many out of poverty and stimulating local economies, particularly where traditional banking infrastructure is inadequate.

4. Innovation and Entrepreneurship

The telecommunications sector has ignited a wave of innovation and entrepreneurship in Nigeria. Access to the internet and mobile services empowers startups to develop solutions tailored to local needs, such as e-commerce platforms, fintech applications, and agricultural tech solutions. This entrepreneurial ecosystem creates jobs and drives economic growth, positioning Nigeria as a burgeoning hub for innovation in Africa.

5. Global Collaboration

Telecommunications facilitate Nigeria’s integration into the global economy. Improved connectivity allows Nigerian businesses to collaborate with international partners, share knowledge, and access global markets. This interconnectedness is key for attracting foreign investment and addressing challenges such as health crises and environmental issues, where collaboration is vital.

However, considerable concern remains — how can Nigerian universities drive change within the telecommunications industry’s framework when there is a lack of sophistication in curricula and insufficient practical steps toward embracing the 21st century?

Countries like South Korea and Singapore ensure widespread high-speed internet access, enhancing innovation in education and healthcare. Estonia’s e-government model offers nearly 99% of services online, improving efficiency and transparency. 

In Kenya, M-Pesa has revolutionized financial inclusion for millions, while Singapore’s smart city initiatives integrate IoT for improved urban living. India’s Digital India initiative promotes digital literacy, and public-private partnerships in the UAE enhance service delivery.

What about Nigeria? Where do we stand in this global context?

This challenge extends to 5G innovation, where Nigeria has yet to fully capitalize on available opportunities. This issue mirrors the current lack of foreign direct investment, highlighting a pressing need for leadership to act decisively and harness the potential of the telecommunications sector as the “new oil industry.”

Addressing these gaps and leveraging the power of telecommunications will help Nigeria set the pace for economic prosperity.