Renowned modernisation theorist and professor of economics, Walt Rostow, in the 1960s, postulated that for Africa and third world countries to develop and achieve economic sustainability, they needed to undergo five stages, which are: traditional society, preconditions to take-off, take-off, drive to maturity, and age of high mass consumption.
Every country, according to Rostow, goes through these stages. The traditional society stage is characterised by subsistence farming, a poor monetary system, and a lack of technological innovation. The pre-condition for the take-off stage prepares the stage for growth. The country develops a standardised monetary system, changes the socio-political system, and the investment level grows above five per cent of the national income. At the take-off stage, investment goes from five per cent to 10 per cent; concentrated growth, industrialisation, and diversification of the economy occur. At the drive to maturity stage, there is an improvement in living standards, technological advancement, and economic prosperity. At the last stage, the economy is fully developed with a high level of consumption and mass production.
Even though Nigeria’s economic growth cannot be said to have followed the Rostow stages in its entirety, we can draw valid conclusions from the model in terms of Nigeria’s current economic growth. It can be argued that Nigeria is currently at the take-off stage.
It is not news that Nigeria is the largest economy in Africa. Statistics show that in 2021, the nation’s Gross Domestic Product was $514.05bn, well ahead of close contender Egypt, with $394.28bn, and South Africa in the third position with a GDP of $329.53bn. The rating largely remains the same in 2022, with Nigeria, Egypt and South Africa being the first, second and third leading largest economies in Africa respectively.
It is instructive to note that Nigeria and Egypt share similarities in terms of the quantum of oil production. But aside from being oil-producing countries, they are also safe investment destinations. South Africa, however, has an edge as the most technologically advanced, diverse, and industrialised economy on the continent.
Nigeria, like many other African countries with crude oil, relied so much on oil in the past. But the world, including the majority of oil-producing nations, is moving toward cutting down on fossil fuel consumption. In Nigeria, the indicator of the country’s take-off is the digitisation of its economy.
As the most populous black nation on earth, Nigeria is blessed with a teaming young population, the majority of whom are technologically inclined. The nation’s young population provides a perfect opportunity to invest and enhance its digital economic potential. As Rostow argued, the take-off stage is signified by economic diversification, industrialisation, and the concentration of institutions and workers around a new industry. Nigeria is currently undergoing a revolution in its drive to the digital economy. Structures, systems, and processes are being put in place to fast-track digital prosperity in the country.
The Ministry of Communication, which was renamed the Federal Ministry of Communication and Digital Economy, has a mandate to ensure the smooth transition of the country’s digital economy. This has resulted in the development of a digital economic roadmap titled National Digital Economy Policy and Strategy (2020–2030). The roadmap focused on eight key areas: developmental regulation, digital literacy and skills, solid infrastructure, service infrastructure, digital services development and promotion, soft infrastructure, digital society and emerging technologies, as well as indigenous content development and adoption. These are in line with the government’s Economic Recovery and Growth Plan.
To this end, the World Bank recommends heavy investment in five critical areas to position the country as a digital economic powerhouse on the continent. These are: digital infrastructure, digital platforms, digital financial services, digital entrepreneurship, and digital skills.
No doubt, beyond policy and tokenism, the digital economy drive is already yielding fruit. The Galaxy Backbone was set up to manage digital operations in the country and digitise governance, cut costs, and maximise profit. The telecommunication and ICT sectors also contributed 13.85 per cent to the GDP in 2019 and 17.92 per cent in 2021. Also, there is a decline in the rate of underserved areas from 31 million in 2019 to 28.8 per cent in 2021. To improve the quality and broadband penetration, around six submarine cables are on their way to the country, with the most recent being the Google undersea cable.
The future looks bright. There are significant investments in digital infrastructure; digital literacy and skills are on the rise; service infrastructure has also improved; and digital services development and promotion are relatively visible. There is, however, a need for more emerging technologies and indigenous content development and adoption. No doubt, digital transformation is the right path to a sustainable digital economy.
- Abdulhameed Ridwanullah writes from Skyline University Nigeria, Kano
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