Every ten years, something great happens in the Nigerian business sphere. In the 1990s, the new generation banks were established, and they used technology to create competitive advantages in markets.
In the 2000s, the voice telephony era came at scale, led by MTN. The 2010s provided the mobile internet era as mobile phones connected to the internet, enabling new vistas of opportunities, as phones became retail stores and bank branches.
The decade of 2020s is the application utility era where the power of cloud computing, mobile internet and software will converge at scale. The companies nurtured and born in this era are expected to replace, through creative destruction of the old companies in the 2030s, just as the leading banks of today supplanted those born decades before them.
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Unfortunately for Nigeria, that will not happen because these companies have already LEFT Nigeria in an unprecedented japa where the best companies in Nigeria are now London and Delaware companies. This is the most consequential own-goal scored by Nigeria against its FUTURE.
Today, more than 90% of all the finest young companies in Nigeria are not corporate-Nigerians even though more than 90% of their activities take place in Nigeria. The United States Consul General in Nigeria, Will Stevens, in a recent speech said: “Up to 60% of African startups are incorporated in the United States – this figure is 80% when considering Nigeria alone…” (So, if 80% are Americans, it is possible my 90% for both UK, EURO and US may be low. People, I am not aware of any tech startup which has raised $1 million and is still fully Nigerian.)
What happened? I explain here.
Comment on Feed
Comment 1: After reading the comments section, I like to say it’s about damn time we realized that we cannot keep blaming government for everything. This is an old and tired excuse we use every time to absolve ourselves as individuals from any blame. It is very convenient to always point the finger of blame at the government. Yes, even the government themselves blame the government too.
Prof has raised some very important issues here, so what can we do about it besides always blaming the government? Hello people, news flash, blaming the government isn’t a solution. I swear if I hear government one more time I’m going to puke.
My Response: The root cause is the legal system and to a large extent, the government has the ace to make it appear fair and transparent. If court cases can last for ages, startups will fade. So, saying that the government cannot be blamed makes no sense. Nations are built on laws, and property rights are the foundation of capitalism. When nations fade on their legal systems, capital stops.
If you track the last 2,000 years, you will notice one thing: no nation has advanced faster and better than its legal system. So, the governments in Nigeria and Africa in general must fix the legal systems to expect CAPITAL which will help to fund the industrialization.
That capital can be internal or external I must note.
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Tomorrow I will write on our funny startup space, we lost our way long ago, but we are now acting as though we are surprised. I saw these things years back, but we have a sizable bunch of our people who believe they could develop Nigeria from foreign countries, until you ask them to provide evidence of nations that became great using that playbook.
When Paystack was acquired by Stripe, did we not write amalgam of articles praising such a feat, even speculating on how such acquisition would seed new great companies? Poverty has messed up our psyches that we celebrate what we should frown at, but it’s hard to tell a hungry man not to eat food placed before him anyway. We celebrate fundraising in dollars as though we solved profound problems.
The money used to found new banks in the 90s came from where, within or outside? The one for telcos came from where? Our legal system wasn’t excellent those days, but companies who believed in Nigeria were created and remained. What happened when it got 2010s and the full start-up fundraising mania? Suddenly, Nigeria became unsafe to keep the funds, rather it became a trading route for her own citizens, with connivance of outsiders. We will learn some uncomfortable truths soon.
Lessons…