Population growth is only likely to increase unemployment in Nigeria

14 February 2019 Consultancy.africa

A high population, massive debt levels and unemployment are causing severe stagnation in Nigeria’s economic growth, as the country looks to diversify its economy beyond the oil trade. Analysts at Stears Business predict that unemployment will persist under the current economic conditions.

The growth rate in the population currently exceeds growth in the country’s GDP, which constitutes a major reason for predictions that unemployment will persist. “Unemployment will remain an issue even when the economy begins to boom, simply because of the rapid rate of population growth,” said Michael Famoroti, an economist at Stears Business.

The problem of rapid population growth has been a prominent one in the Nigerian context, prompting global financial institutions such as the International Monetary Fund to suggest that the country should focus on growth in income per capita, given that it is expected to be the third largest population on the planet by 2050.

Population growth is only likely to increase unemployment in Nigeria

A report from the Boston Consulting Group in 2016 revealed how despite substantial economic growth in the country over the last two decades, the lack of equitability in this growth has led to a scenario with low employment and labour force participation, and consequently low access to education and healthcare.

As a result, the country has a substantial population, a large portion of which lives in extreme hardship and is restless with the social and economic conditions in the country. Among a range of other factors, Nigeria’s economic woes can be attributed to a disproportional reliance on the oil and gas sector. 

Nigeria is the biggest exporter of oil in Africa, and crude oil accounts for nearly 70% of the government’s income. 90% of the country’s foreign currency reserves have also been built up through the oil trade, which meant catastrophe for the country in 2014 when global oil prices plummeted.

A report from global professional services firm Deloitte last year revealed that the country’s economy had stabilised to some extent since the dip in prices, having returned to a growth rate of 1% for that year. Nevertheless, the report highlighted the income inequality, and reaffirmed Stears’ prediction that unemployment will remain high in the current economic scenario. 

Market trends that are emerging in a post-digital African economy

15 April 2019 Consultancy.africa

The discourse is now moving to a post-digital world, where the differentiating factor among a sea of digitalised firms will become the capacity to deliver personalised services based on individual customer needs – among other things – according to a new report from global management consultancy Accenture.

Businesses in Africa have been navigating a period of rapid digitalisation recently. The continent is set to have as many as 1 billion internet connections over the next two years, which means that the population is set to be wired in. The business environment has been looking to capitalise on this digital market.

While the bigger firms have been quick to adopt digital technology within their operations, smaller businesses were initially weary due to the high costs involved in digital transformation. Nevertheless, a number of these firms are realising the value of digital integration, and Accenture is looking towards the next step.

As per a new report from the firm, most businesses are on their way to digitalisation, which is restoring a certain uniformity to the market. In this context, digitalisation is no longer the differentiating factor. Businesses must now focus on developing mechanisms for customer relationships, among other enhancements.

Market trends that are emerging in a post-digital African economy

The technology that will take centre stage in the new scenario includes distributed ledger technology, artificial intelligence, extended reality and quantum computing (DARQ). Such technologies allow firms to “reimagine entire industries”, as per the firm’s analysis, and nearly 90% of firms are already experimenting with such technology.

Another key trend that is emerging in the post-digital world is the need for cyber security. According to Accenture, cyber security is no longer an individual effort from companies, but must be a collaborative effort across all stakeholders in any given sector that has digitally integrated.

“Ecosystem-driven business connections increase companies’ exposure to risks. Leaders recognise that just as they collaborate with entire ecosystems to deliver best- in-class products, services, and experiences, security must join that e­ffort as well,” says the firm.

“Technology is creating a world of intensely customised and on demand experiences, and companies must reinvent their organisations to find and capture those opportunities as they come,” adds the firm, urging that meeting customer needs is now more about speed than about service.