Many factors make a country an e-commerce powerhouse. Nigeria happens to have most of them already while growing into the others. This article seeks to analyze what these factors are and how they can project Nigeria as the powerhouse of Africa.
Large Market
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One of Nigeria’s trump cards has always been the boisterous population of over 200 million. By widely accepted estimates, Nigeria’s population constitutes over 2% of the global population. Over 50% of Nigeria’s population live in urban areas.
Tens of millions of Nigeria’s population are active internet users.
These facts result in a fast-growing e-commerce market that is difficult to beat. Although the market comprises mostly small & medium-scale businesses (SMEs), it also has a healthy number of large enterprises that have invested heavily in the e-commerce sub-sector.
Creative & Resilient Minds
Nigeria has a creative and youthful population. Thriving in this large population necessarily requires creativity and resilience. This has translated into demography that always comes up with the best ideas in other to stand out from the crowd.
It is thus not unusual that some of the best startup ideas and startups originate from the West African country.
Investment
US ambassador to Nigeria, Mary Beth Leonard, recently revealed at the Nigeria Tech Summit that Nigerian startups raised over 60% of African funding in 2021.
In her words, “Africa-based tech startups have raised more than $2.9 billion. Nigerian startups, which are creating new products, services, and platforms, raised $1.7 billion of this total or about 60% of it. Africa boasts a total of seven tech ‘unicorns’ or companies valued at over $1 billion.”
Although the growth has been steady, the crescendo of investments noticed in 2021 is a clear indication of the confirmation in the Nigerian market.
Where applied correctly, the massive investments would result in a boost to the Nigerian e-commerce scene.
Data Centres
There has been significant growth in the number and quality of data centres in Nigeria over the last 10 years. There have also been entries of big international players who acquired or bought stakes in the local data centre operators.
- Actis acquired the controlling stake in Rack Centre, a tier-III data centre based in the Oregun part of Lagos, in 2020.
- Equinix acquired MainOne, operators of the MDX data centres in the Lekki axis of Lagos, for $320 million, in 2021.
- Digital Realty (Interxion) in 2021 invested into Medallion, one of the oldest and strongest market players based in Victoria Island, Lagos.
- 2021 witnessed the entry of Africa Data Centres in the Nigerian market. They recently launched their LOS1 data centre located on Eko Atlantic City.
Between the new players in the Nigerian space, there are plans to build new data centres in Lagos, Kano, Abuja and Port Harcourt. These would eventually result in a very robust local hosting market that would result in a better user experience within Nigeria.
Nigeria is evolving and would have evolved significantly into the undisputedly biggest and strongest e-commerce market in Africa.
