New technology innovations from tech startups, enhanced by internet connectivity through the Internet of Things, no doubt defined the ICT landscape in 2016, writes Emma Okonji
Nigeria technology startups in the financial technology space, this year, rolled out a lot of great ideas that were developed into technology solutions for solving immediate challenges.
Paystack, for instance, one of Nigeria’s most anticipated tech startups, which is an online payment platform, developed by two young Nigerians, Shola Akinlade and Ezra Olubi, secured $1.3 million seed investment fund from both international and homegrown investors, according to Forbes.
The achievement is coming after Andela, another Nigerian startup company based in Lagos and New York, blazed the trail with a $24 million Series B funding round from the Chan Zuckerberg Initiative founded by Mark Zuckerberg and his wife, Priscilla Chan.
Paystack, however, initially caught the eyes of industry commentators as it was one the first Nigerian technology companies to be accepted into the world-famous Y Combinator progamme, based in Silicon Valley.
Since then, having taken Paystack through Private Beta, and securing $120,000 early-stage investment from Y Combinator, Akinlade, the CEO and Olubi, the CTO, have quietly been building the company, working to secure this seed investment round, whilst also building a network of partner merchants in Nigeria, over 1,500, who are now using the platform to accept online payments.
Outlook of ICT industry in 2016
According to the CEO of Paradigm Initiative of Nigeria (PIN), Mr. Gbenga Sesan, 2016 was a very interesting year for the ICT industry. Though we saw a lot of new entrants/ideas and investments from technology startups, there was also the unpredictability of the sector. From the emergence of ‘fake news’, which is really the coming of age of a new generation of news consumers who determine what their own ‘truth’ and ‘fact’ is, to the policy summersaults within Nigeria, it was a busy year for the ICT industry even in Nigeria.
According to him, major highlights of the year that made the round in 2016, include slow progress on broadband by the regulator, surprising discussion around Over-The-Top (OTT) services regulation, reversal of removal of data floor price, high profile visit by Mark Zuckerberg to Nigeria, coming-of-age (of sorts) of tech ideas led by young people — as seen through increased investments — and continued lip service by government to the importance of diversification through the opportunity that ICTs provide.
Addressing issues about the biggest investments and achievements in the ICT industry in 2016, Sesan said the biggest achievement is the coming of tech start-ups led by young people. While policy summersault and lip-service continues from government, smart young women and men built products and services that solve local problems, have regional relevance and attracted global support. If there’s a lesson for Nigeria in this 2016 recession, which will continue for a few more quarters if we don’t course-correct, it is that value addition that can come from one of the most neglected demographic and sector. Even in the government projections to generate three million jobs over the next three years, ICT doesn’t have a huge bet. And this confirms that there’s a huge gap between policy expectations and reality of the opportunity that tech start-ups, that are meeting local needs while attracting global resource, offer.
Some of the major drawbacks in the ICT industry, according to stakeholders, could be seen in the area of policy lags, innovation, and broadband. According to Sesan, “We can address the policy/innovation problem if government stops trying to implement projects and allows ongoing work in places like Yaba in Lagos, to inform policy choices. Just like Nollywoood, the tech start-up ecosystem is blooming and this can help government decide how to use policy to support this innovation. Instead of violating digital rights and poising the digital space, Nigeria can actually work towards becoming the innovation hub for Africa through deliberate tech education policy and creating a great environment for these job-spinning and service-producing tech start-ups to thrive.”
“Also, on broadband, we are only two years away from the 30 per cent deadline and while the regulator is busy working towards the answer with mobile access, we need to allow terrestrial infrastructure to blossom as stated in the National Broadband Policy,” he added.
Examining the impact of the passage of cybercrime law, and the significant value it added to ICT development in 2016, industry experts said the cybercrime law that was passed in 2015, added zero value to the ICT sector in the short term. They, however, said it has actually been more applicable outside the ICT sector, and has been used to arrest bloggers or intimidate innocent citizens, in the long term. They alleged that instead of taking advantage of the cyber-law to prepare Nigeria for cyber-readiness, the law has been used by top Nigerians and security agencies to harass people simply expressing their constitutionally guaranteed rights. They said more than five of such cases were recorded during the year 2016, no thanks to sections 24 and 38 of the law.
Mark Zukerberg’s visit
The visit of Facebook founder, Mark Zuckerberg, to Nigeria in August 2016, no doubt, raised the morale of technology startups, who had since then been challenged to develop more technology solutions that will address immediate needs and challenges of individuals, organisations and the society at large.
Shortly after leaving Nigeria with his wife Priscilla, Zuckerberg wrote about his personal challenges for 2016, while developing a simple artificial intelligence (AI) to run his home, like Jarvis in Iron Man.
According to Zuckerberg, “my goal was to learn about the state of artificial intelligence and so far this year, I have built a simple AI that I can talk to on my phone and computer.”
The AI uses several artificial intelligence techniques, including natural language processing, speech recognition, face recognition, and reinforcement learning, written in Python, PHP and Objective C.
“Before I could build any AI, I first needed to write code to connect these systems, which all speak different languages and protocols. We use a Crestron system for our lights, temperature and doors, a Sonos system with Spotify for music, a Samsung TV, a Nest cam for Max, and of course my work is connected to Facebook’s systems,” he said.
Vision and face recognition of Zuckerberg’s AI in 2016
According to Zuckerberg, about one-third of the human brain is dedicated to vision, and there are many important AI problems related to understanding what is happening in images and videos.
“These problems include tracking, object recognition and face recognition.
Face recognition is a particularly difficult version of object recognition because most people look relatively similar compared to telling apart two random objects. But Facebook has gotten very good at face recognition for identifying when your friends are in your photos. That expertise is also useful when your friends are at your door and your AI needs to determine whether to let them in,” he said.
ICT contribution to GDP
Citing the current statistics on telecoms contribution to Gross Domestic Product (GDP) as released by the National Bureau of Statistics (NBS) in June this year, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta said telecoms contribution to GDP, moved from $18 billion in private sector investments, including Direct Foreign Investment (FDI) in 2009, to $30 billion in 2014, to $32 billion in July 2015, before hitting N1.58 trillion as at June 2016. This represents an increase of 1.0 per cent, relative to the first quarter in 2016.
Danbatta quoted the NBS as saying “This is the largest contribution to GDP made from the telecoms sector in the rebased period, which emphasises that growth in telecommunications has remained robust when compared to total GDP.
Communication Tax Bill
One major controversy that ensued in 2016 in the ICT sector, was the debate on the planned introduction of Communication Tax Bill, which seeks to increase telecoms tax by nine per cent.
The Senate had proposed the bill, which has already passed two readings, awaiting public hearing.
The President of the Association of Telecoms Companies of Nigeria (NATCOMS), Chief Deolu Ogunbanjo and the President of the Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola, where among the several Nigerians who protested the planned communication tax bill, and called on the National Assembly members to drop the idea.
They said the bill would be inimical to telecoms growth in the country, as subscribers would be made to pay more for telecoms services rendered by telecoms operators. While NATCOMS threatened to drag the National Assembly members to court to seek redress, should the proposed communication tax bill be introduced, it also assured Nigerians that it would mobilise civil society organisations, Nigerian students, and coalition of Nigeria Consumer Association, for a five million man-match to the National Assembly in Abuja, to protest the proposed communication tax bill.
A major breakthrough for the telecoms regulator, the NCC, aside transparency in its regulatory approach in 2016, was in the area of spectrum sale, especially the sale of two slots of 25MHz in the 5.4GHz spectrum for the delivery of wireless broadband in Lagos State.
Although NCC saw the sale as breakthrough, industry stakeholders widely criticised it, insisting that NCC should have allowed the 5.4GHz spectrum as free spectrum to be used free of charge by smaller operators who have the capacity to provide clusters of telecoms services in remote areas, but could not afford to participate in spectrum auction because of the heavy cost implication.
Faulting NCC for auctioning the 5.4GHz spectrum, the stakeholders, who spoke at a technology forum in Lagos, organised by the Association of Telecoms Companies of Nigeria (ATCON), said NCC was supposed allow certain spectrum as unlicensed, to enable smaller operators use them free of charge to provide services in remote parts of the country.
Giving clarifications why the 5.4GHz spectrum was auctioned for N55 million and won by Cobranet Limited and Swiftnetworks Limited, the Director, Spectrum Administration at NCC, Austin Nwaulune, said: “The 5.4GHz spectrum was not sold because NCC needed to make money for government. It was sold because NCC wanted to encourage smaller operators who needed the spectrum to rollout services, hence it was sold at N55 million, which is far lower that previous licences auctioned by NCC. ”
In spite of the drawbacks in the ICT sector for 2016, industry stakeholders are of the view that 2017 will be a make-or-break year for Nigeria’s ICT sector, especially in the area of broadband penetration.