By Timi Olubiyi, Ph.D.
It is no more news that US-based social media company Twitter Inc. has concluded plans to establish a presence on the African continent in line with its growth strategy. Recall, that Twitter’s founder and CEO, Jack Dorsey, visited Nigeria, Ghana, Ethiopia, and South Africa in 2019 in anticipation of this major expansion and growth strategy. Sadly, to Nigeria and Nigerians, Ghana was announced to host Twitter’s first Africa office. This was communicated in a statement in which Twitter Inc. described Ghana “as a champion for democracy, a supporter of free speech, online freedom, and the Open Internet”.
The social media company joins Facebook Inc. in moving into Africa. However, when I remember that this action plan will improve Ghana’s outlook, improve Ghana-Twitter relations, increase job creation and opportunities in Ghana, improve the country’s technology sector, and yet still serve the Nigerian large market, then I agree it was well thought out even though it ignites a further rivalry between Ghana-Nigeria.
Likewise, when you consider that Nigeria currently has a population estimate of about 206 million and that Nigeria’s population is equivalent to 50 percent of that of West Africa where the population stands at 394,314,367, according to United Nations (UN) data, then it is depressing that we lost to Ghana.
Further recall that Nigeria also accounts for over 50 percent of the GDP of the West African sub-region. Furthermore, Nigerian Internet and mobile penetration continue to grow with high relevance, as at 2020. About 50 percent of Nigeria’s population use the Internet and around 90 percent of the total population have mobile phones according to reliable data. According to a survey online, 39.6 million Nigerians have Twitter accounts, which is more than the entire 32 million population of Ghana. It is on record that Ghana has just about 8 million social media users. All these data on Nigeria should offer tremendous opportunities for any investor particularly in the technology space, but on the contrary, the choice of Ghana over Nigeria for the Africa’s operation of Twitter Inc. might just be due to the perennial challenges that exist in the country, from incessant insecurity, inadequate infrastructure, the severe and irregular regulatory requirements, to high sense of entitlement, high cost of running business, corruption and the current macroeconomic uncertainty among others. In fact, stability, security of life, and assets come chiefly for any investment consideration before viability or returns. More so it is not enough for Nigeria to just be a big market for desirability of investors, FDIs consider much more other factors.
In my opinion, another reason for Twitter Inc.’s decision could be the power/electricity situation in Nigeria which has remained unsolved and this usually increase the cost of doing business. It is a big challenge to businesses and FDIs when competitiveness is considered across borders. Without adequate electricity supply, it is extremely difficult to operate businesses effectively because companies will usually end up committing revenue to generate alternative power supplies which include buying generators and fueling such generators daily, this can drawback investments. If the power concern is addressed in Nigeria, it will contribute significantly to business growth, increase in FDIs, which in turn will contribute to sustainable economic activities and job creation for the citizenry.
To this end, Nigeria needs to do more to attract investments into the country, because this is one of the ways to improve the economy, create more employment and engage some of the teeming youth gainfully in the country. Clearly, by demographics, the population of Nigeria is dominated by youths who are technologically savvy and full of energy, so good opportunities are available through FDIs.
The largest rival of Twitter is Facebook Inc., and its first African office on the continent was opened in Johannesburg in 2015. According to plan, there is a move by Facebook Inc. to have a second office in Lagos State Nigeria before the end of 2021, it is hoped that this decision stands. Ghana appears to be the destination of choice with Google, Microsoft, and Huawei among the international tech giants that have expanded their operations in the small but focused West African country. Sincerely, there are many lessons to be learned to remain a competitive destination for investors and to attract much-needed foreign investment in Nigeria the government, businesses and the populace must do more. In particular, security, the ease of doing business, and rule of law in the country must be rejigged and enhanced for meaningful competitiveness in Africa as it stands.
A greater number of countries strive to attract Foreign Direct Investment (FDI) because of its acknowledged benefit as an instrument of economic development, Nigerian can leverage it too. For instance, a Facebook Inc. office in Lagos State is likely to improve the partnership between Nigeria and Facebook, which is critical for the development of the country’s technology sector. Just like Twitter Inc. and Facebook Inc. other companies and tech giant businesses might be willing to have more presence in Africa to expand their services, therefore Nigeria should be more prepared. There is a large body of knowledge on the benefits that can be derived from FDIs, some of which are the development of human capital, more boosts in employment opportunities and job creation, enhanced competitiveness, access to management expertise, improved employee skills, transfer of technology, knowledge transfer, and above all it will boost perception and have economic effect of the host country.
Historically, Nigeria is one of the countries in Africa with vast demand for goods and services in form of FDIs, sitting in third place behind Egypt and Ethiopia according to the United Nations Conference on Trade and Development (UNCTAD) 2019 World Investment Report. However, Nigeria needs to further improve on this or at least maintain the position by handling and tackling the myriad of challenges in the country as quickly as possible. The current decision by Twitter Inc. to opt for Ghana only shows that more is required from Nigeria in all areas, more importantly in the business, economic, security, and governance landscape. Without doubts, things really need to improve in the country to attract much-needed foreign investment.
Therefore, to attract quality FDIs and significant investments into the country, the government needs to do more on policy formulations and incentives targeted at FDIs including adequate enabling environment for businesses to thrive. Most importantly, the anti-corruption drive of the government needs to be stiffened accordingly.
In conclusion, government and policymakers need to further initiate various policies and incentives to attract FDI inflows into the country as the competition for FDI intensify on the continent. More so the government needs to improve on policies and laws to promote private sector involvement in the economic growth of the country particularly the SMEs, startups, financial technology (Fintech), software and telecoms companies because they are essential in today’s business world. Good luck!
Dr. Olubiyi is an Entrepreneurship and Small Business Management expert with a Ph.D. in Business Administration. He is a prolific investment coach, business engineer, Chartered Member of the Chartered Institute for Securities & Investment (CISI), and a financial literacy specialist. He can be reached on the Twitter handle @drtimiolubiyi and via email: email@example.com, for any questions, reactions, and comments.