The Chief Executive Officer of FlexiSAF Edusoft Limited and a member of the Nigeria Startup Act 2022 Implementation Committee, Faiz Bashir, speaks with SAMI OLATUNJI on some of the challenges in the Nigerian technology sector and the way forward.
How would you describe the Nigerian tech sector, and what role is your company playing in this sector?
The tech sector, in general, is booming and has a lot of potential. In the whole world, technology has come to stay, and one way or the other, you need to key into it. The tech sector, in terms of GDP, contributes about 17 per cent in Nigeria; that is huge. That is the overall, including the telecom sector and software and so on.
For specifics, in our own case, where we deal more with software, that has also been growing. Though there are a few challenges, there is a very big potential. I compare this opportunity to India’s model, which I think Nigeria has all it takes to be like that, to export ICT and contribute to the GDP. For us, software is really our core, and we try to meet industry standards and international perspectives.
From experience, what would you say are the major challenges faced by tech startups in the country?
There are some challenges that are really obvious, like in terms of enabling environment, even infrastructure and so on. From a business perspective, your operational cost will increase because you have to put some things in place – power, internet and so on, just to make sure the environment is conducive. Also, from the market perspective, since we are into software and technology, our customers must have access to digital tools and the internet and so on. So, having all these infrastructural challenges in terms of power, internet and also even capacity, in some cases, there is low capacity in terms of digital tech skills. Both ways, even for the customer, will reduce the right of adoption of your solution. In terms of the talent of people you will need to work with, that might also be a challenge.
Do you agree that there should be a law that encourages technology-driven learning in the country?
Certainly, I am an advocate for that for many reasons. One: when a trend comes and you don’t key in, you are already limiting yourself, other parts of the world will keep progressing, but you will keep retrogressing. Especially in education, if we don’t close that gap, we will continue to increase the digital divide, where more people who have access to these things continue to be ahead and our own students continue to lag behind. So, a policy to address that is really critical, and the government usually have to step in sometimes to make this policy and create a framework that will make things seamless and easy, which would also involve investment because making the policy is one thing, supporting it is another. That will drive investment in terms of technology in education. Remember, just recently, the bill for student loans has been passed. Some of the concerns that have been raised is how do we even do this thing- is it a manual process, or how do we ensure that maybe these students are in school, and are performing? So, without this technology, it is almost impossible. So, I think it is inevitable; the government needs to continue to look into that and come up with the right policy.
You were recently appointed as a member of the Implementation Committee for the Nigerian Startup Act. What progress has the implementation committee made so far?
I was fortunate to be part of that committee, and we were inaugurated in March or April thereabout. And since then, we have been working. One of the key mandates was for us to help in the implementation, especially in the initial phase to get things on track and set the ball rolling. I mean that is the main secretariat that oversees the activities. So far, the key milestone is the inauguration of the startup council, which was part of the work of the committee to put some things in place. We have some committees already, such as the development committee that will look into what should be the framework in terms of building capacity for the startups. We have the funding and finance, the legal committee that oversees everything and significant progress has been made so far. What has slowed things a bit is the new administration, and we need to wait to see the new direction. I am very optimistic about the Act, and a lot of progress will soon be seen.
The Nigerian Federal Government has allocated an annual budget of N10bn to support young innovators in creating indigenous startups, in a bid to reduce imports and increase exports of Nigerian products.To what extent can this fund help innovators in the country?
Funding is usually critical for any programme to be successful. I think this Act, when it was put together, should paid attention to that. So, that N10bn is already part of the Act, which means that hopefully, every year, there is something earmarked to contribute. But looking at the big picture and overall objectives, we even need more funding from the private sector and so on. But this will go a long way in building capacity. Honestly, we have recorded significant progress. You know about the unicorn in Africa, five of them are from Nigeria, but I think there is a lot of potential we can tap, if we have many more startups that have the capacity. This funding, for me, is one key area that hopefully will add value in terms of creating more capacity for these startups, also working with the hubs and accelerators to provide the training and so on. Support in terms of infrastructure and enabling environment that already has been created with hub and so on. To support this startup, I think this funding can hopefully also go a long way.
The second question, for me, is really about the capacity. The government cannot do everything; it is more about creating an enabling environment. They should pay attention to the hub accelerators so that we have enough capacity to build and trend this startup as much as possible.
What do you believe is the impact of the Nigerian StartUp Act for tech startups?
You know, startups, if you think about it, it is the future, for every country in the world. If you go to the US today, you will see that they take that very seriously and try to create an enabling environment and policy because that is what most of the biggest companies in the world today come from; startups. And if you look at their contribution to the GDP of the economy, it is tremendous. And every serious country has to look into that and I think Nigeria has taken the right steps to establish the policy.
In terms of contribution to the economy, the development of Nigeria is enormous. I look forward to seeing many startups that will grow successfully through this Act and getting the right support, you can estimate the employment it is going to create, the economy and, even export. This solution is the future, and will contribute to our forex reserve. I think it is very huge and something I hope the government will build on the foundation.
What are the likely risks to the Nigerian tech sector with the loss of talents as a result of the rising japa fever?
That is a very good question and coincidentally, I am sure you were aware that recently, Bill Gate had a session with the youth entrepreneurs and a similar question was asked. I agreed to his answer and it is about striking the balance as he said. Being Nigerian, I think I will be even more patriotic about it. But honestly, I align with what he said because the world is a global village. So, how do you keep upping up your standard? I think that is the major area. This is helping us; this migration is helping us up our standard. And in the example he made, they one way or another contribute to the home country in the near future. Even now, some of the unicorns were people who came from the diaspora to support it and make it happen. So, in the next five to 10 years, the experience they get hopefully will all come back and contribute to the development of Nigeria. But as a business, we are also affected. We have so many engineers who have migrated, but there have been a lot of benefits as well. We still work with some of them. You know they gain experience, which we also tap back. That trend has made it clear for many software companies to understand the reality. You have to up the game and improve the standard in terms of salary, to support the cost of living. But you know we can’t compete with the recent rate of forex that has been what made it even more competitive. So far, we have been able to manage that very well.
How can the government mitigate these risks and encourage more young people to stay and thrive in the country?
The banking sector is one of the most affected by this trend and there have been a number of cases where there is a shortage of talent and the system isn’t really working well. You know some insecurities issues. I think this is one of the downsides of this. But in terms of government support, there is no shortcut to these things. The question we should ask ourselves is what is causing the trend? The government has to put a number of things in place, not just directly on this issue. So, the government has to look at security, for example. Many people left not necessarily about the benefits in terms of pay, but insecurity was one of their major concerns. If the government is able to secure the nation, that is significantly going to help in terms of our standard of living. That is also important because many leave because of the poor standard of living. So, the government has to up its game in terms of creating infrastructure and enabling environment so that when we increase or improve our standard of living, it is going to close the gap. For instance, the government should look at training through programs like ITF, SURE P and other programmes . They may collaborate with private sectors to help in training enough talents. Hopefully, that will, in the long run, mitigate the challenge.
How do you see the startup ecosystem evolving in the next few years, especially with the implementation of the Startup Act?
I project that it is going to accelerate a lot of successful startup development in Nigeria and many more success stories. The startup is structured in such a way that it will work directly with startups in terms of building their capacity, and there will be a lot of investments and attraction, which will contribute significantly to the growth rate of startups in Nigeria. For the long time, like I said, it is the future, and any serious nation has to key into that. I am optimistic about the vibrant youth we have who are always with high energy and creative thinking of how to solve our serial challenges. It is a good one, and in the near future, it will contribute significantly to the economy.
