Nigeria to spend $5.3bn on IT

IT spending in Nigeria will top $5.3 billion in 2016 as organizations embrace digital transformation initiatives in a bid to streamline their costs and bolster their flexibility.

This is according to global technology research and consulting services firm International Data Corporation (IDC), which last week hosted an event at Victoria Crown Plaza, Victoria Island, Lagos, to announce a series of ‘IDC FutureScape Predictions’ for the year ahead.

“Some combinations of the technologies of the 3rd Platform – namely mobility, cloud, Big Data analytics, and social business – sit at the heart of most digital transformation efforts across Nigeria,” says Mark Walker, IDC’s associate vice president for Sub-Saharan Africa. “Smart City initiatives, whether greenfield or brownfield, are driving greater adoption of 3rd Platform technologies as well as a deeper paradigm shift on the part of governments, technology users, and vendors. Indeed, the success of Smart City initiatives will play a role in Nigeria’s digital transformation journey in 2016.”

The emergence of the Internet of Things (IoT) ecosystem is another key facet of the digital transformation revolution beginning to take place in Nigeria. IoT applications in the government, retail, transportation, manufacturing, and utilities verticals will offer the greatest growth opportunity for vendors operating in Nigeria, while security is expected to form a key component of any robust digital transformation strategy. And according to Oluwole Abegunde, a telecommunications research analyst at IDC West Africa, cost-optimization efforts and a lack of skills will drive demand for security services in the years ahead, while the proliferation of IoT technologies will push concerns around privacy and physical security to the top of the ICT agenda.

“The adoption of IoT will accelerate the rate of digital transformation in Nigeria as organizations and stakeholders seek actionable insights from the high volumes of data that will inevitably be generated by the proliferation of connected ‘things’ such as mobile devices, wearables, and sensors,” says Abegunde. “These insights will transform the way businesses and government organizations interact with customers, citizens, suppliers, and even employees, helping them to become more agile and innovative than they could have previously imagined.”

Elsewhere across the African continent, public and private sector organizations will shift to tighter, more digitized supply chains in 2016. Regional integration, public-private partnerships, and omni-channel services are expected to accelerate supply chain cohesion, driven by a combination of trade agreements and a reduced reliance on commoditized trade. Babatunde Afolayan, a systems and infrastructure solutions research analyst at IDC West Africa, notes that continued urbanization – together with demographic/social changes – will further drive the need for digital solutions. “eCommerce and mcommerce developments are expected to bolster the African sharing community and mobile, IoT, user experience, security, and analytics will create new experiences and opportunities across the continent,” says Afolayan. “African examples of these trends will become showcases for established and emerging markets around the world.”

IDC’s country manager for West Africa, Bola Adisa, believes that technology in Africa is undoubtedly an equalizer that enables innovation and transparency. “In Nigeria, the democratization of information is preparing the country for a digital future and enabling it to become included in the digital economy,” says Adisa. “While the digital transformation trend signals a positive development for Nigeria’s ICT vendors, a number of macroeconomic factors may nevertheless prevent the ICT market from reaching its full potential. Indeed, a challenging economic outlook, high structural unemployment, electricity supply challenges, and volatile currency fluctuations are all impacting ICT market spend. Despite market headwinds, IDC predicts ICT spend in Nigeria will grow 6.5% year on year in 2016, with mobile devices responsible for much of the increase.”