The Covid-19 pandemic brought the world to a standstill. How did the pandemic impact Nigeria’s tech ecosystem? And what can be done to guarantee future resilience?
KTN Global Alliance and AfriLabs – A synergy
Early in March 2020, Africa’s Covid-19 cases by country were in the single digits, but by mid-month those numbers had spiked, leading the World Health Organisation to sound an alarm. This has led many within the African innovation ecosystems to look for ways to address the impacts of the pandemic.
In order to track the impact of the pandemic on the innovation ecosystem in Africa, AfriLabs and KTN Global Alliance worked together to deliver a rapid analysis of innovation response to the Covid-19 pandemic, with focuses on Kenya, Nigeria and South Africa. Our research looked into the impact of the pandemic on the innovation ecosystem, the response to it, the success and failures, and the opportunities to strengthen the African innovation ecosystem.
What has been the main impact of the pandemic?
The impact of the pandemic in Nigeria is similar to the impact in South Africa and Kenya – the two other focus countries.
Nigeria was among the first countries in Sub-Saharan Africa to identify Covid-19 cases and has since implemented strict measures to contain the spread of the virus. From the onset, enormous effort went into healthcare, ensuring that more people got tested and treated through existing and purpose-built infrastructure, especially in Lagos.
As a way of cushioning the effect of the strict measures, the Federal Government of Nigeria rolled out palliative measures for targeted groups, focusing on supporting the basic needs of the poorest – more people outside of the formal system were hit devastatingly by the lockdown.
On the education front, the education sector was closed physically and resumed digitally (through e-learning) where possible. Some state governments launched television and radio programs while some private schools were able to continue following a remarkable transition to e-learning. However, the greater majority of schools were not able to transition to e-learning due to the “digital divide” in Nigeria where major parts of the society lack digital skills and access to the internet and affordable data.
Many businesses that could provide all or part of their services digitally continued operations while the rest were brought to a complete standstill. Some major organisations closed down for good, while many others laid off staff out of necessity and in an effort to save their overall businesses. Examples of such were innovations in the tourism and entertainment sector.
What are the lessons learnt?
Despite the fact that the Nigerian innovation ecosystem was hit hard by the Covid-19 pandemic, some sectors were able to adjust rapidly. The education sector is one (albeit a small portion of the market). There was also a drive towards medical care gear in the manufacturing sector.
SMEs and entrepreneurs that had the option to adjust their plans and turn their business models to a full or partial online service were the ones that succeeded. While those that felt overwhelmed, bet on a quicker return to normalcy or required an up close and personal relationship to serve their client failed or nearly failed.
The specific impact on innovation funding
The immediate impact on innovators was far less funding available, especially to the already struggling early-stage startups. Furthermore, the prevailing uncertainty meant that businesses turned away from their growth strategies towards newly defined “survival strategies” resulting in fewer opportunities for the innovators, entrepreneurs and SMEs to access institutional funding.
What barriers and opportunities did stakeholders identify?
The key weaknesses recognised by stakeholders include limited funding (particularly for early-stage and pivot innovations), lack of access to digital channels (resulting from a lack of access to affordable internet and data), lack of digital literacy and lack of accessible business mentorship and support. While the Nigerian innovation ecosystem eventually responded by providing many of the above support to innovators, shortcomings exist in reach and timeline of provision.
What direction should future research and analysis take?
Startups need models to help them better forecast their short to medium term fiscal situations during emergencies, as well as help in making quick shifts and alterations in response to them. Many startups struggle to get a firm grasp of financial numbers and how they will evolve with emergencies, changing economic conditions and consumer behaviours. Support organisations can help by providing technical assistance around financial modelling and data-based decision making.
Furthermore, future research and analysis into business support methods to improve or at a minimum maintain the channelling of funds to early startup entrepreneurs in emergency times and for critical survival pivots would be helpful. Also critical is the analysis of infrastructure, access to data, business coaching and mentorship as well as governmental policies required to fuel the continuous growth of entrepreneurs and innovators in the local ecosystem in emergency and post-emergency times in Nigeria.
Recommendations towards greater resilience
Given the extent of the economic impact of the pandemic, there is the need to implement other recovery strategies for future resilience. Resilience is as much a tool for persisting during a crisis as it is for thriving. Now, more than ever, programme design and intervention strategies for players within the innovation ecosystem must be intended at assisting them to build resilience in the immediate to long-term. Implementing the following recommendations would aid such resilience.
- Greater access to flexible and responsive financing support.
- Increased digital literacy and access to affordable data.
- Greater resilience through targeted policy design.
- Identify and facilitate value-driven partnerships.
You can view a slide presentation which analyses the innovation response here.
About KTN Global Alliance Africa
KTN Global Alliance Africa is a six-year project co-funded by the UK’s Foreign, Commonwealth and Development Office (FCDO) and Department for Business, Energy and Industrial Strategy (BEIS) through the Global Challenges Research Fund (GCRF), and with the strategic partnership of Innovate UK to drive networking activities that can help foster long-lasting, strategic partnerships between Nigeria, Kenya and South Africa, the UK and across sub-Saharan Africa. In doing so, it aims to accelerate innovations that promote economic growth and job creation.
Learn more about KTN Global Alliance here: www.ktn-uk.org/programme/africa.