The Impact of Covid-19 on the Nigerian Innovation Ecosystem – AfriLabs

The Covid-19 pandemic brought the world to a standstill. How did the pandemic impact Nigeria’s tech ecosystem? And what can be done to guarantee future resilience?

KTN Global Alliance and AfriLabs – A synergy

Early in March 2020, Africa’s Covid-19 cases by country were in the single digits, but by mid-month those numbers had spiked, leading the World Health Organisation to sound an alarm. This has led many within the African innovation ecosystems to look for ways to address the impacts of the pandemic.

In order to track the impact of the pandemic on the innovation ecosystem in Africa, AfriLabs and KTN Global Alliance worked together to deliver a rapid analysis of innovation response to the Covid-19 pandemic, with focuses on Kenya, Nigeria and South Africa. Their research looked into the impact of the pandemic on the innovation ecosystem, the response to it, the success and failures, and the opportunities to strengthen the African innovation ecosystem.

What has been the main impact of the pandemic?

The impact of the pandemic in Nigeria is similar to the impact in South Africa and Kenya – the two other focus countries.

Nigeria was among the first countries in Sub-Saharan Africa to identify Covid-19 cases and has since implemented strict measures to contain the spread of the virus. From the onset, enormous effort went into healthcare, ensuring that more people got tested and treated through existing and purpose-built infrastructure, especially in Lagos.

As a way of cushioning the effect of the strict measures, the Federal Government of Nigeria rolled out palliative measures for targeted groups, focusing on supporting the basic needs of the poorest – more people outside of the formal system were hit devastatingly by the lockdown.

On the education front, the education sector was closed physically and resumed digitally (through e-learning) where possible. Some state governments launched television and radio programs while some private schools were able to continue following a remarkable transition to e-learning. However, the greater majority of schools were not able to transition to e-learning due to the “digital divide” in Nigeria where major parts of the society lack digital skills and access to internet and affordable data.

Many businesses that could provide all or part of their services digitally continued operations while the rest were brought to a complete stand still. Some major organisations closed down for good, while many others laid off staff out of necessity and in an effort to save their overall businesses. Examples of such were innovations in the tourism and entertainment sector.

What are the lessons learnt?

Despite the fact that the Nigerian innovation ecosystem was hit hard by the Covid-19 pandemic, some sectors were able to adjust rapidly. The education sector is one (albeit a small portion of the market). There was also a drive towards medical care gear in the manufacturing sector.

SMEs and entrepreneurs that had the option to adjust their plans and turn their business models to a full or partial online service were the ones that succeeded. While those that felt overwhelmed, bet on a quicker return to normalcy or required an up close and personal relationship to serve their client failed or nearly failed.

Specific impact on innovation funding

The immediate impact on innovators was far less funding available, especially to the already struggling early-stage startups. Furthermore, the prevailing uncertainty meant that businesses turned away from their growth strategies towards newly defined “survival strategies” resulting in less opportunities for the innovators, entrepreneurs and SMEs to access institutional funding.

What barriers and opportunities did stakeholders identify?

The key weaknesses recognised by stakeholders include limited funding (particularly for early stage and pivot innovations), lack of access to digital channels (resulting from a lack of access to affordable internet and data), lack of digital literacy and lack of accessible business mentorship and support. While the Nigerian innovation ecosystem eventually responded by providing many of the above support to innovators, shortcomings exist in reach and timeline of provision.

What direction should future research and analysis take?

Startups need models to help them better forecast their short to medium term fiscal situations during emergencies, as well as help in making quick shifts and alterations in response to them. Many startups struggle to get a firm grasp of financial numbers and how they will evolve with emergencies, changing economic conditions and consumer behaviours. Support organisations can help by providing technical assistance around financial modelling and data-based decision making.

Furthermore, future research and analysis into business support methods to improve or at minimum maintain the channeling of funds to early startup entrepreneurs in emergency times and for critical survival pivots would be helpful. Also critical is the analysis of infrastructure, access to data, business coaching and mentorship as well as governmental policies required to fuel the continuous growth of entrepreneurs and innovators in the local ecosystem in emergency and post-emergency times in Nigeria.

Recommendations towards greater resilience

Given the extent of the economic impact of the pandemic, there is the need to implement other recovery strategies for future resilience. Resilience is as much a tool for persisting during a crisis as it is for thriving. Now, more than ever, programme design and intervention strategies for players within the innovation ecosystem must be intended at assisting them to build resilience in the immediate to long-term. Implementing the following recommendations would aid such resilience.

• Greater access to flexible and responsive financing support.
• Increased digital literacy and access to affordable data.
• Greater resilience through targeted policy design.
• Identify and facilitate value-driven partnerships.

You can view a slide presentation which analyses the innovation response here.

Related events

Global Ideas Exchange: Enhancing Innovative Resilience in Africa – 19 to 29 October 2020

As Covid-19 rapidly started sweeping the globe, KTN’s Global Alliance Africa project quickly shifted its activities to track and map the innovation response to the pandemic in Nigeria, Kenya and South Africa. KTN’s new “Global Ideas Exchange: Enhancing Innovative Resilience in Africa” event series is our way of responding to these calls. We hope to encourage sharing and learning and aim to showcase the latest ideas and best practice in innovation.

Who should attend?

This event series is an inclusive platform for innovators, innovation enablers, investors, industry leaders, academia, the public sector and global innovation community to share knowledge, exchange ideas, and enable inclusive, multi-scalar approaches to resilience.

We have partnered with AfriLabs, CcHub, and the South African Technology and Innovation Agency, while also reaching out to other international partners to collect experience data, case studies and best practice from 23 countries across Europe, Asia and Africa.

What are our aims?

• To share the findings of our rapid analysis and provide inclusive platforms to drive constructive discussions around key findings and clearer information around public sector offerings.
• To ensure participation from diverse innovation stakeholders in the UK, Nigeria, Kenya, South Africa, and from around the world in building frameworks for future cooperation.
• To launch inclusive communities of practice that can actively support more robust and effective investment pipelines in Africa.
• To improve the visibility of existing connections and develop new avenues for communication between policymakers and innovation enablers.

For more information and to register for this exciting event series, click here.

AfriLabs Annual Gathering – 12 to 14 October 2020

AfriLabs is a network organisation of 225 innovation centres across 47 African countries. They support hubs to raise successful entrepreneurs that will create jobs and develop innovative solutions to African problems. AfriLabs’ mission is to raise high potential entrepreneurs that will stimulate economic growth and social development in Africa. They achieve this through capacity building, financing, networking, policy advocacy, and providing insightful, reliable data.

The AfriLabs’ Annual Gathering provides a unique opportunity for tech hubs in the AfriLabs network and other stakeholders in the African tech ecosystem like local innovators (entrepreneurs), corporates, investors, academia and developmental agencies to convene, network and share knowledge. The AfriLabs Annual Gathering has historically been held at different cities around the African continent in collaboration with national and local governments, the private sector and their member hubs.

KTN Global Alliance will present the Global Ideas Exchange Masterclass on the 12 October 2020 at 1:30pm – 3pm in the afternoon part of the programme agenda. For more information and to register, visit the AfriLabs website.