Nigeria’s Free Trade Zones could unlock Africa’s Digital Economy 

If technology and innovation will change Africa, and there’s no doubt that they will, governance must shift to stimulating opportunity, not stifling it. 

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By Iyinoluwa Aboyeji, co-founder of Andela

We are all waking up to the enormous potential of Africa becoming the emerging giant tech hub of the world.

The evidence is everywhere: from news of a US$360 million Chinese investment in Nigeria’s Fintech industry; to predictions that more than half of the world’s working population will live in Africa by 2035, and news that Twitter CEO Jack Dorsey will spend up to six months a year in Africa because Africa as he says, “will define the future.”

As far back as 2016, Mark Zuckeberg, CEO of Facebook made a similarly bold remark in front of an army of developers in Lagos, Nigeria, “I am here,” he said, “because this is where a lot of the future will get built.

But while smart people the world over don’t doubt that the global future of tech will be built in Africa, the form this building will take remains uncertain. For one thing, the future of Africa’s cities and urban areas need much attention.

By the turn of the century, a third of all people will be African. The population of the continent is expected to grow from its 1.2 billion today to 4.5 billion by the end of the century. Nigeria alone will be home to 400 million people. This is double the number who live here right now.

More than 60 percent of these people will live in cities and urban areas.
At present Africa’s cities are ill-equipped to cope with the huge changes that are coming and that, many would say, that are already upon us. For example, Lagos, a tiny 110 square kilometre coastal city that’s threatened by climate change, is home to more than 17 million people.

The Lagos population is projected to grow to more than 100 million by the turn of the century. Yet, Nigeria with a population of close to 200 million people has only seven cities accommodating more than a million people each. Contrast this to India that has 46 cities with populations greater than a million, or China with more than 100 cities with at least a million people each.

Africa has an opportunity to build more sustainable cities for exponential population growth. However, unlike China and India, African governments lack both the time and the money to build these cities.

It’s for exactly this reason that Andela is working (with a state government backed free trade zone in South Eastern Nigeria) to tackle this problem. We’re building a talent city: a charter city focused on the talent that will drive technology, innovation and the digital economy.

This Talent City (its working name) will be a charter city focused on attracting technology and creating technology enabled jobs and will be run and managed within a free trade zone with its own productivity-focused, entrepreneurial-centered regulations and bylaws.
Whereas the old Nigerian economy was built on agriculture and oil, today trade services and ICT comprise more than half of the country’s GDP. Yet Nigeria’s political class still makes policy as though agriculture and oil comprise the vast majority of our economy.

Africa continues to be poor because its leaders maintain the illusion that Africa’s riches lie only in natural resources. Meanwhile they often ignore the continent’s human resources that have evolved to become the bedrock of its ICT and trade services-centred economy.
If technology and innovation are going to transform Africa, and there’s no doubt that they can, then governance must shift to stimulate talent and opportunity, and not stifle it.
Nigeria’s free trade zone laws give us a blank canvas (free of socio-political and protectionism). We have, in developing this talent city, an opportunity to develop policies that are  data driven and evidence based, making it possible for us to ensure the best of African technology and innovation emerges and flourishes.

This is the model that’s enabled Chinese cities like Shenzhen and Dalian to emerge as manufacturing capitals of the world, and Indian cities like Bangalore and Hyderabad to become the outsourcing capital of the world. Nigeria, despite its immense potential and talent, remains the poverty capital of the world.

There’s no doubt that peripheral industries will develop around our talent cities. Our pioneer talent city is sited in one of Nigeria’s most beautiful and vibrant areas with an active tourism and entertainment sector. With an influx of businesses staffed by upwardly mobile young technology talent, there will be a resultant tourism and economic boom to the surrounding area.

My hope is that this charter city model, already applied to good effect in cities around the world from Dubai to Kigali, will enable governance innovation. This is the most important form of innovation. It unlocks the potential of the continent and will ensure that all of our 4.5 billion people of the future can lead lives of purpose and prosperity.

Aboyeji is co-founder of Andela, a Lagos-based global IT giant. He will be a speaker and panelist at the inaugural Charter Cities Conference. The Conference takes place on 17 and 18 March 2020 in Johannesburg. For more information, please visit https://chartercitiesconference.com/

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