KEY POINTS
• Innovation can help Nigeria diversify beyond crude oil and develop new sources of growth and foreign exchange.
• Technology adoption could improve productivity in agriculture, logistics and other sectors while creating new employment opportunities.
• An innovation researcher identifies weak research funding, unreliable power, limited broadband and financing gaps among barriers to progress.
MAIN STORY
Innovation could help Nigeria move beyond an economy largely dependent on extracting value from natural resources towards one that creates higher value products, services and businesses, according to an Innovation Policy Researcher, Dr Abel Shagu.
Shagu made the assessment in an interview with the News Agency of Nigeria (NAN) in Abuja on Monday, saying innovation was central to the country’s efforts to diversify its economy and develop alternative sources of growth and foreign exchange.
He said continued reliance on crude oil left the economy vulnerable to fluctuations in international oil prices and naira volatility, making sectors such as agricultural processing, manufacturing, digital services and the creative industries increasingly important.
“Innovation is how Nigeria moves from an economy that extracts value to one that creates it,” he said.
Beyond creating new businesses, Shagu said technology adoption could raise productivity by improving the way existing sectors operate. He identified agriculture and logistics among areas where better processes could increase output per worker.
He said mechanised and data driven farming, combined with digital logistics systems, could improve productivity and potentially raise incomes for millions of Nigerians.
The researcher also pointed to innovation led businesses, particularly startups and technology enabled small and medium enterprises, as a potential source of employment for Nigeria’s growing young population.
With millions of people entering the labour market each year, he said the formal sector would not be able to absorb every job seeker.
“Startups and tech-enabled SMEs create new kinds of jobs and give young people an alternative to unemployment or informality,” Shagu said.
He said Nigeria could extend the type of innovation seen in fintech to sectors with major social and economic needs, including healthcare, energy access, education and food security.
According to Shagu, fintech showed that solutions designed around local challenges could develop into companies with international recognition while expanding access to payments, lending and other financial services.
He said greater investment in research and development, technology adoption and skills would be necessary for Nigeria to compete more effectively and build resilience within global value chains.
THE ISSUES
- Nigeria’s dependence on crude oil leaves economic performance exposed to changes in oil prices and currency conditions. Diversification into productive sectors could provide alternative sources of economic activity and foreign exchange.
- Productivity gains will depend not only on access to technology but also on its adoption across sectors. Agriculture and logistics are among the areas identified where improved processes could raise output and incomes.
- Nigeria’s expanding labour force creates pressure for businesses and the wider economy to generate new forms of employment. Startups and technology enabled SMEs could provide opportunities outside traditional formal sector employment.
- Innovation requires an environment in which businesses and researchers can develop and commercialise ideas. Shagu identified inadequate research funding, unreliable electricity, limited broadband, weak long term financing and poor links between universities and industry as constraints.
WHAT’S BEING SAID
“Innovation is how Nigeria moves from an economy that extracts value to one that creates it.” – Abel Shagu
“Startups and tech-enabled SMEs create new kinds of jobs and give young people an alternative to unemployment or informality.” – Abel Shagu
“Innovation is not a luxury for Nigeria. It is the most credible path to diversified, inclusive and resilient growth.” – Abel Shagu
WHAT’S NEXT
Shagu called for stable regulation, more reliable infrastructure, stronger research funding and improvements in STEM and digital skills. He also advocated better public procurement policies that would create opportunities for local innovators to secure customers.
He said the Nigeria Startup Act could support innovation, but its impact would depend on effective implementation.
BOTTOM LINE
Innovation could support Nigeria’s economic diversification by improving productivity, creating businesses and opening new employment opportunities. Shagu says stronger infrastructure, financing, research and regulatory support are needed for those opportunities to translate into wider economic gains.
