AI is a blessing and a curse. For Africa

As of this month, the general AI frenzy across the world would have been around for about two years. Although, in reality, AI has always been there, it’s just that the buzz around it started much later. It’s been almost two years since Open AI launched ChatGPT in November 2022, fueling a widespread popularity of AI and since then, AI technology has unveiled some mindblowing developments.

At first, I felt the trend, just like other useless problem-seeking-solutions, will fade. But it hasn’t so trust me to start experimenting. 

Being a pragmatic soul, I found some commonsense AI tools play around which include Bland AI for voice calls, Visual Electric for image generation, and Google’s ImageFX for podcasting. 

Bland AI as it allows you to have proper intelligent conversations with the tool but it still feels a little script kiddie and unpolished so I wouldn’t call it a favorite at this time; still a work-in-progress. Visual Electric was made for design and lets you generate so many images. It’s pretty amazing and this one is definitely a favorite. That’s what we currently use in my company, Lendsqr and even in Open Banking Nigeria,  instead of looking for stock images from Shutterstock or even open source images. Google ImageFX is also great and you can use that to create audio, images and maybe even videos soon. 

Do you see the big picture yet? 

In the last couple of years, AI technology has rapidly expanded to support a wide array of activities that before now, could take hours or even days of work to complete. In Lendsqr, we’re embracing this new reality and using AI to drive customer service and other activities where we’ve identified that integrating AI into the process can give us better results and free up our talent for more engaging work.

Bless AI …

As much as we can look at AI as the shiny new thing (for those who just encountered AI technology for the first time out of their television screens with ChatGPT), its rapid and widespread uptake is owed to its unmatched utility and ability to solve real problems that people like me, especially in Africa and other less developed regions, have been dealing with for years. 

The first pain is that being able to get the right type of image has always been a concern. At Lendsqr, we’re heavy on marketing because I love writing and I think it’s an effective way to get our message across to our target audience. Even on a personal level, I’ve been writing for about 23 years so I know the power of writing first hand. So, we do a lot of marketing, posting on social media, etc. and being able to get the right type of image for the markets we operate in, has always been a concern. This concern has grown most especially in recent years, where we have to be sensitive to demographic representation needs with our target audience.

The second is the high costs for image sources. We used to sign up for expensive tools like Shutterstock to access images we could use but it became clear that this came with the problem of a limited image stock. So even when you find good images, you’d realize that they’ve been used or will be used so often that if you ever meet the models by chance, say at the airport, you’d be so convinced that you know them because they’re on everyone’s billboards and social media posts. Before now, if you wanted something very creative for yourself or your brand, you’d have to shoot it. That’s also expensive and you’d probably only use the image once.

And for those who tried to escape the cost of these image sources and opted for free sources, 9.5/10 times, they were met with quality issues. Yes,there are some free sources available, but they’re not common and the quality is usually not great, or even decent enough to get by.

But AI technology came to save us from all that.

Here’s how AI technology has made my world a little brighter

Over the last year and some, we started seeing guys like DALL-E, Midjourney and Visual Electric come up with the ability to generate stunning and unique images. But many people can tell that those images are AI generated. However, they’re getting to a level where more people are getting confused, wondering if the images are AI generated or not. 

I watched this happen recently: my siblings and I were reminiscing about our mum’s old car, a blue Volkswagen Beetle, and in that wave of nostalgia, I got curious about how accurately I could reconstruct the key elements of those memories. So, I went ahead, dropped my prompt, generated an image of the car with a young lady standing by it and posted it on my WhatsApp status. Interestingly, people who know me reached out to ask if the lady was my cousin to which I responded “yes” and when pressed further to ask why they had never met her, I responded that it was because she was my AI cousin. Made for a good laugh. 

Although AI generated images may not always come out perfect, if you’re good at prompting, you can dictate what you want down to the smallest detail and master the greater creative control AI technology affords you. I envision that AI image generative tools will get so good that it might not even make sense to use stock images anymore because stock images are coming from somebody’s preconceived idea of what another person could use it for, while with AI, you get to generate images based on your specific needs.

Additionally, it definitely doesn’t hurt that AI tools are more affordable and give you more value for money. For instance, Visual Electric is dead cheap at just $16 a month for the standard version and you can even use the free version if your needs are limited or you just want to give it a try before a financial commitment. These tools create more images than you could get from stock images, and what you get is unique to you. 

Above all, I think the greatest attribute of AI technology is its ability to evolve. I was engaging with the CEO of Visual Electric recently, Colin Dunn, and he mentioned something about them working to release a version that’ll generate videos too. Amazing.

AI technology is impacting how we work in incredible ways 

At the rate we’re going, people will be able to generate tons of images that may even be better than real life. Soon, this gets to audio, music, videos, animations, and possibly, 3D. This way, people will be able to create interesting content more easily and much faster, and this obviously increases its utility for marketers.

Today, people snap photos and use filters. We know they’re using filters but nobody cares.

Just like that, a time will come when we’ll know that you’ve generated an AI image, and nobody will care—they’ll look interesting and normal.

In fact, your creativity would soon be measured from being able to use AI to generate extremely creative content.

There’s a lot of talk about AI replacing people but perhaps we also need to talk more about how it helps people become more efficient. In Lendsqr, we’re so crazy about hiring only the very best people; a lot of them are first class graduates, very highly talented people and when we assign them to do customer service jobs, they don’t like it. No brilliant person wants to go to school, just to end up doing customer service. And I’m strongly against the idea of lowering our standards to find those who maybe weren’t so great at school and want to do customer service because they think it’s easy. I want everyone who works in Lendsqr to be great and first class rated. 

So, we thought about it and instead of dumbing down the job requirements and bringing people that may not be fit for our highly intellectual environment, or making very smart people unhappy by doing mundane support jobs, we decided to increase the challenge and transform their jobs to high-level problem solving support. These guys are so smart that they’re now building tools to do the mundane jobs they don’t want to do. AI helps my people do great work.

Two-thirds of AI is a blessing and one-third is a wicked curse 

I know I’ve spent most of this piece talking about how great AI technology is but I won’t pretend to be blind to the adverse impacts this advancement will have on the way things are done, the people who do them and those who consume the output.

People are going to lose their jobs for sure, because they may not be that great, or even when they’re that great, they’re competing with something that costs less than $20 a month and can work 7 days a week, 24 hours a day. These tools are always available and they’re learning very quickly how to understand what people need.

Another unpleasant outcome is that customer support business process outsourcing (BPO) centers in India will become obsolete. And this would happen so fast that Africa may never have enough time to get a slice of this.

Also, while most of the benefits of the increased efficiency that comes with AI are clear, the overall impact on society and advancement of the human experience is still unclear. The technology is still developing, so there’s a big question mark on the quality of results and ethical concerns which can have adverse effects on the quality of decisions resulting from AI input. Can we trust AI generated data enough to make business, economic or life-altering decisions?

I admit that AI has been great for improving overall efficiency in my company but it can only go so far. There are some parts of our human experience that deserve the delicate human touch and original thinking that AI is yet to replicate. Can we objectively say that work devoid of that human touch and unique creativity is truly great? I’m not so sure. I’m a grade A tech fanatic but even I don’t leave certain things to AI. 

Regardless, the benefits outweigh the costs

While it’s true that some people will lose their jobs to this tech advancement, the beautiful thing is that generally, we’re going to be better off. The progress made with AI technology means that a lot of people today, for whom being able to have armies of people to provide support, is what has been the cap on their aspirations of building very successful global businesses, can now do so with little to no friction.

The 24/7 availability of these tools also means that businesses can expand their internal functions faster and cheaper. Even running even a one-man business is a lot easier now, with tools that can do customer support, marketing, accounting, etc.

You can also train AI faster and without incurring thousands of dollars paying for employee training courses. These tools will learn and grow much quicker than human beings which means your business and your quality of delivery can improve in much less time—your 5-year profit projections might very well be within your grasp in less than half of that time. And they’ll enable you to more easily eliminate human error to produce more consistent results over time. 

I  believe I’ve just painted the ideal growth conditions for African entrepreneurs like me. 

So, what’s holding you back?

Nigeria’s broke because it’s leaving a lot of tax on the table

Instead of raising taxes, Nigeria could significantly boost revenue by automating its tax system and collecting what’s already owed. A centralized platform would streamline the process, reduce friction, and ensure accountability across all levels of government, making it easier for Nigerians to comply while improving overall efficiency.

Nigeria is challenged but we could also just focus on practical ways the government can address the many hurdles ahead of us, including the friction that makes getting anything done painstakingly difficult. 

Interestingly, what’s happening in Nigeria isn’t peculiar to us alone; it’s the same story across many countries in Africa. So rather than dwell on what’s wrong, I’d rather spend more time discussing solutions. After all, if you keep blaming a child for how bad they are, at some point, they just won’t give a d*mn anymore.

Are Nigerians evading taxes or is the government evading tax collection?

Now, let’s talk about Nigeria. I care about issues across Africa, but Nigeria holds a special place in my heart because it’s my home. Nigeria is severely broke but that doesn’t stop the government and Tinubu wasting money on unnecessary things, and it’s true. But here’s the thing; it’s hard to save money and be cost-effective when you’re not even great at managing what you have or when there’s simply not enough money coming in to begin with.

Take taxes, for example. The Federal Inland Revenue Service (FIRS) has been doing a fantastic job, no doubt, but there’s still much room for improvement. The mistake the government keeps making is that they’ve been trying to raise taxes which only just adds to the misery people are facing. It’s even worse because the leadership isn’t showing the same level of prudence they’re forcing down everyone’s throats. Instead of doing this at the risk of provoking the ire of Nigerians, why not focus on collecting what’s  already owed? Why create new taxes or increase existing ones when the government could 10x revenue just by properly collecting what they’re already entitled to? 

Statistics show Nigeria has one of the lowest tax-to-GDP ratios in the world, standing at 10.8% as at July 2023. With such poor performance, the next logical step should be to close that gap. But here’s the issue, like I’ve previously discussed, even for those who want to comply and pay their taxes, the system is so complicated and full of friction that people give up before they can complete their mission. A few large companies pay because they’re too big to hide; but most people just coast along. Even trying to get a proper tax assessment is a big wahala. Personally, I couldn’t even pay my own tax assessment on time because the process was so frustrating.

What I know about myself and many law-abiding Nigerians, is that if we knew the exact taxes we owed and if the process was simple, we’d pay. We might grumble, but we’d get it done and move on with our lives. 

We run three tiers of government in Nigeria, and fortunately, we have something called the Joint Tax Board (JTB), which is supposed to help streamline things by coordinating between federal and state tax bodies to harmonize the tax administration across Nigeria.

I have an idea of how this could be fixed

Moving on to solutions, here’s my proposal: imagine if I were given the opportunity to automate the entire tax structure for Nigeria. This is an idea, right? And I imagine that it’ll work and it could make a significant difference at all levels of government. It’s possible that as I piece this together, there may be nuances I’m missing because even the best ideas may turn out differently when they meet reality. But the concept is sound. A national tax system, managed by the JTB, that would serve as a centralized platform for all Nigerians to easily pay their taxes; helping the government to increase its revenue and reduce the friction currently crippling the system.

The Federal Government collects money through taxes, dues, etc. The parastatals and MDAs are silos and mostly collect payments through TSA. Right now, states like Lagos, despite their relative success, are still leaving a lot of money on the table, and local governments are even worse off. They’re so backward that they don’t have a functional structure or decent technology for collecting taxes; and the quality of leadership at that level is too mediocre to handle these problems. We could sit around and blame them till Jesus comes, but that won’t help. They need sound minds that can implement a solution to help Nigeria get its tax collection system in order.

Keep reading. I’ll break it down for you.

Nigeria needs an automated National tax system .. like yesterday!

Here’s how the centralized tax platform I’m proposing would work:

All tiers of government are already members of the JTB and there’s an existing system for identifying Nigerians (individuals are identified by their National Identification Number (NIN) and businesses by their registered name/ RC number with the Corporate Affairs Commission (CAC)). So, a crucial step would be to integrate with these databases—National Identity Management Commission (NIMC) for individuals and CAC for businesses—to synchronize all identification data. This ensures that the system has access to all the information the government already knows.  

Next, every tax entity, whether local governments, state governments, federal agencies, or MDAs, would have their own profile on this platform. These entities, whether working with consultants or even their own staff, can then get into the system and define their own tax structure, allowing for flexibility. For instance, a local government could create taxes for waste collection, parking fees, television fees, etc. and specify which individuals or businesses these will apply to. The platform could also allow them to easily define xyz taxes specific to their areas, so the platform will automatically display that tax only to the residents of that area.

Similarly, state or federal entities could define taxes by industry or special groups e.g. importers or manufacturers. This approach allows each layer of government to manage its own tax rules and categories, and allows the platform to automatically match taxpayers to the taxes relevant to them. Makes sense so far, right? 

The Joint Tax Board could partner with the Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBSS) to create a pseudo-bank specifically for tax payments and taxpayers would be assigned virtual accounts on the platform to pay their taxes into. So these monies come directly to that platform and not through any other agency or whatnot. 

This swaps the clunky and opaque tax payment process for a more seamless and transparent one. So, if you need to pay a total tax of ₦1 million, you can transfer that exact amount into your tax account on the platform, without any additional cost of payment and from there, you can assign funds to the different tax obligations; whether local, state, or federal.

Individuals can log into the platform using their NIN to view and manage their tax information, while businesses can be set up by a director or shareholder and linked to their own NIN. They can then profile their finance teams and other relevant parties to manage the tax obligations for the business. 

The beautiful part is that the money would go straight to the taxing entity, eliminating worries for the local and state governments such as the federal government collecting taxes on their behalf and not releasing the funds to them. This system would be able to show each entity their collected taxes, outstanding amounts, in real-time.

I think this system provides a highly efficient, transparent, and scalable tax solution for all tiers of government. And I’m not just saying that because it’s my idea.

But let’s not forget to hold people accountable still

As great as the idea of this centralized platform is, will it solve all our problems? I can’t say for sure, but it’s definitely better than doing nothing. It also doesn’t mean the money the government collects won’t still be wasted or stolen, but at the very least, everyone will have a better idea of how much is being collected. This would make it easier to hold the government accountable, and remove the current friction that makes paying taxes such a hassle.

Finally, there’s the matter of enforcing compliance. My recommendation for this is that the  government could mandate certain institutions, like banks, to verify people’s tax status every year. This information would be made available automatically through the platform. Where anyone is found to be non-compliant, their banking services could be suspended until they get up to date with their tax payments. Basically, just like one needs a valid ID for certain services, you’d need to show proof of tax payment to access government benefits or conduct certain transactions. 

Simple as that.

Friction is the silent but chronic cancer killing Nigeria

Friction and mediocrity are stifling Nigeria’s growth. The real issue isn’t taxes, but the barriers that make basic tasks difficult. By reducing friction, the government and private sector can drive explosive economic growth without raising taxes.

Normally I’m not the type to get into political matters and I don’t look forward to serving in the government; it’s a difficult task. Nevertheless, we own this country, so we have a responsibility to find ways to solve our never ending problems.

When we look at Nigeria today, we see that there are so many challenges but corruption and mediocrity are the poster children. Our people also complain about the government spending money unreasonably—on new planes and fancy stuff—and it’s true. But if we take a step back and look at the dollar value of these expenses, the money the government is spending isn’t so much. Nonetheless, the perception that resources are being wasted remains valid.

However, the real problem we have in Nigeria is a revenue problem. We’re just not making enough money. This country should probably be generating around half a trillion dollars in government revenue every year. So, why isn’t that happening?

I’ve already mentioned the issue of mediocrity, and that’s a big part of it. I don’t focus as much on corruption, because corruption, to me, feels more like a symptom. It exists in most countries. But the lack of consequences sets our corruption apart as a special breed. Corruption in Nigeria is fueled by mediocrity and allowed to thrive because no one is held accountable.

There’s a symbiotic relationship between friction and mediocrity in Nigeria

Some of this mediocrity I’m talking about comes from friction. Maybe mediocrity causes the friction, or maybe the friction causes the mediocrity; it’s hard to tell. But one thing that is clear is that the friction in Nigeria is intense. Remove friction, and the country will grow.

So, what exactly is friction? It’s the lack of ease in doing what needs to be done; the barriers you face, the hurdles you have to scale before you can get anything done.

Where does this come from? Let’s look at everything. In Nigeria today, if you’re a good person trying to do the right thing, it’s hard to stay good. Take paying taxes, for example, it’s difficult to do so. If you wake up one morning and set out on a mission to pay your taxes, you might not even know all the taxes or dues you’re supposed to pay. Where do you go? There’s no single place that tells you everything. And because of this, bad agents can just hustle you from all sides.

Imagine you want to start a business and wish to export your goods, you have no clue about all the steps involved. You might apply to a government agency and still be lost because you have to do 10 things just to complete one task. So, if you want to start exporting today, is there a place where you  can get a simple list of the 1, 2, 3, 4, 5 things you need to do and you just start? The answer is no.

Let’s also look at it in reverse. If you’re a Local Government Chairman, you probably don’t even know who you’re supposed to tax. And if government agencies don’t communicate with each other, as simple as this thing is, it creates a massive barrier for Nigerians who genuinely want to do right and create value.

Even the Nigerian government is getting robbed by friction

Let’s set aside Nigerians who want to do right for a moment. The government itself is struggling. When you look at the state of the economy today, and the huge debt figures, it further frames the scale of the problem. There’s so much infrastructure that needs to be built, schools that need funding, and better quality education that needs to be delivered, but there’s no money to do any of it. Why? Because the government doesn’t even know how to collect revenue effectively and that’s another layer of friction.

Here’s the thing; while friction remains a challenge, we can learn from past examples. In the early 2000s, when Lagos State was having problems with the Federal Government and its money was seized, this same President created Alpha-Beta to help the state collect  its internally generated revenue. This move significantly reduced the friction Lagos faced in collecting revenue back then; it didn’t eliminate it entirely, but things were much worse before. The state’s revenue surged and they were able to fund their activities while they were still fighting with the Federal Government.

That template is what others replicated. The Federal Government later introduced the Treasury Single Account (TSA), which made it easier to collect and track revenue. Unfortunately, their bad spending negates the gains, but the concept works.

I believe that if the government systematically addresses this friction—something I’ll talk more about in future posts—Nigeria’s revenue would increase 10X. For example, imagine if the government made it easier for everyone to know the taxes they’re supposed to pay, and every government agency that should receive taxes, knew exactly who they should be collecting from; with automated, systematic data to track it all. Revenue would skyrocket. But right now, most people don’t pay their taxes, NSITF contributions, or other dues meant to go to the government. So, the government doesn’t even need to think of increasing taxes immediately; they just need to remove the friction first.

Today,if the government understood that reducing friction is key to improving the ease of doing business in Nigeria (which is perhaps currently among the worst in the world), everything would change. If setting up a company, paying taxes, applying for permits, and filing returns became easy, this country’s growth would be explosive.

The private sector can drive Nigeria’s growth; just remove the friction

We need government spending, but the private sector, even without government funding, is more than happy to spend money and create value. 

Take Dangote for instance; because of their relationship with the government, they approached the government for them to take on the reconstruction of the Apapa Wharf with their own money in exchange for a tax credit in the future. And Dangote went ahead, spending ₦72 billion to redo the Apapa Wharf road, including a toll gate and that was it. Magic happened in that place. The road got fixed, and nobody’s complaining anymore. If the government made such processes easy and straightforward, this kind of progress would be common.

Now, let’s look at Nigeria more broadly. We talk about encouraging people to come in and out of the country, and we know Nigeria has its issues, but tourism could generate so much more revenue if we reduced the friction. It’s not even about Visa-On-Arrival. Imagine if we made visas free, or allowed people to apply and pay online, then they’d simply scan a QR code upon arrival and move on. That alone would drive tourism and business. We can take a cue from what the new minister did with automating the passport application process to work end-to-end online. After this, we literally saw the entire backlog of applications disappear, and with it, the chance for corruption. 

To sum it all up, friction is like a cancer in the Nigerian system. If the government puts in the effort to remove it, this country could grow tenfold without even needing to raise taxes. Even corruption would decrease, though it may not disappear completely. The best part? The government doesn’t even need to spend money to eliminate friction; they just need to be open-minded and willing to collaborate with the private sector to make this work.

Contactless cards can revolutionize payments in Nigeria

Contactless payments could revolutionize Nigeria’s payment system with their speed and convenience, but adoption remains slow due to regulatory gaps, trust issues, and limited infrastructure. To overcome this, banks should partner with high-traffic merchants and launch campaigns to showcase the ease of tap-and-go payments. With the right push, contactless transactions could become mainstream, driving a significant boost in cashless payments across the country.

The ease and speed of a payment method are directly proportional to its adoption. Although payment with cards has been growing at about 100 per cent CAGR over the last three years, all you need to do is stand behind that smug, self-entitled millennial stamping her feet while waiting for a purchase to finish to know that paying with debit cards at POS terminals would never be mainstream for everyday payments.

The UK was at the same junction a few years ago although using your card for payments was significantly faster. Then things changed when banks allowed regular debit and credit cards to be used to tap-in and out on buses, trains, and trams. Contactless transactions exploded. You only need to see contactless payments in action for you to be smitten.

You will ask yourself just one question: why have we suffered this long?

When properly configured, contactless payments go through in less than 1 second, just the same time it takes to touch the card to the reader, and that’s it.

How do contactless cards work?

Not so simple. On a contactless card, the plastic has a small antenna that allows it to wirelessly transmit payments information from the chip on the card to the card reader. When you touch your card against the reader, they both talk to each other. Contactless can work in both online mode (where transactions are sent to the bank for authorization) and offline mode (where the bank gives some leeway to allow payments to be approved by the chip on the card).

For security reasons, banks, governed by national standards, set certain limits. For example, the bank will determine the number of times you can do touch-and-go before you can use your card for online payments (where you have to input your PIN). Also, there is also a maximum amount you can do at a time. You can read about the limits for different countries here.

Despite the benefits of contactless, this is yet to catch on in Nigeria. Nevertheless, this has not stopped banks from taking the bull by the horn. Over the last three years, Nigerian banks have been giving out contactless cards by default to all customers. Despite the N30,000 limit, but with no places to use them, it has been an exercise in futility.

The challenges to using contactless in Nigeria are not as many as I previously thought though they are not trivial.

There are no playbooks for contactless payments in Nigeria. In other countries, the regulators always specify the rules that govern payments, including contactless. We have a myriad of regulations for payments in Nigeria, but none is looking at how contactless should work.

Risk acceptance in Nigeria is also a challenge. Abroad, banks trust that transactions done in offline mode will always be paid by the customers. And when cards are stolen, the banks will refund the customer the amount the thieves have done for offline payments. In Nigeria, banks don’t trust the customers to pay back, and the customers don’t trust their banks to make good of money stolen when contactless cards are lost. An impasse ensues.

There are hardly any shops in which you can use contactless cards. It’s one thing to have a contactless card; it’s another thing to have places you can use them. The millions of cardholders taking their contactless cards around use them as decorations since they are no places to tap and go. This, however, creates a chicken and egg problem. Apart from card issuance, no other bank is serious with contactless cards, so the market is small, so this makes banks not to invest in contactless reader POS. Why buy POS that nobody would use.

Irrespective of the challenges of contactless cards acceptance and issuance, the immense benefits and its ability to transform payments and make cashless real means it makes sense to pursue its usage. And the pressure on every bank, there are more cardholders than users of USSD and mobile apps.

Product managers can deal with this by getting customers to activate their contactless cards. And they could work this way. Cardholders need to be shown the ATMs, insert their cards, and press in the PIN; an action will be displayed on the screen that will show them a pop-up message from CBN that puts a card on the line in their accounts. Each customer will be responsible for his settings, and if the card gets lost, well, it’s like your wallet getting lost with the cash you just got from the ATM. The benefits are apparent; banks reduce their liability while customers can see what they are comfortable with to get the benefits of faster checkouts.

Banks should have a strategic partnership with high-traffic merchants such as tolls and major supermarkets. These would be anchor merchants that can help drive the adoption of the usage. After all, a picture is worth a thousand words – nothing will convince anyone to adopt contactless faster than seeing it in action. And by the way, the merchants also enjoy contactless as they can handle customers more quickly during peak shopping periods.

With those two things in place, the last logical piece of the tripod legs would be a massive campaign to let customers know about contactless. Nigerians are very aspirational so getting a few A-listers and Nollywood stars to be the face of this would quickly turn tap-and-go into a must do for everyone.

When the ease of payment with cards is not due to an actual counting of dirty Naira notes to make payments, we should be looking at annual transactions at least ten times more than the 2023 POS payments.

Solar power and batteries are the future of power in Nigeria

Nigeria’s power issues persist, but solar energy and new battery tech offer us hope. Affordable, lasting solutions are making energy independence possible without having to rely 100% on the government.

Power has been a challenge in Nigeria since I was born. In fact, it has been a challenge for years before I was born. And it’s starting to look like it’ll outlive me. There’s never been any time in Nigeria when we didn’t have power issues, at least in my time and the impact of this constant struggle with power is crippling—the lack of reliable electricity has caused many aspects of life and development in Nigeria to remain messed up.

It’s difficult to understand why these issues persist because I’ve seen things that weren’t available in Nigeria, become available over the years. For instance, I grew up in the  time when there was no telephony in Nigeria; when as of January 2001, out of 100 million Nigerians, only about 400,000 had a telephone line. Things were really bad back then, and communication was incredibly limited. However, we saw what happened when telephony was done; it felt like the entire Nigeria suddenly became connected, like one team. If telephony hadn’t progressed like it did, Nigeria would’ve been a shell of itself today.

I witnessed a similar thing for the spread of the internet in Nigeria as well. Around 2015, the internet began to gain importance here. Initially, we didn’t have access to the internet but then the GSM providers started making mobile internet connectivity available and in all fairness, they did  an amazing job. Then MainOne laid the first cable, and internet pricing dropped significantly. After this, MTN introduced the West African Cable System (WACS) here. Although we always had SAT-3, but it was just a disgrace and GLO’s internet service wasn’t really impactful. However, the improvements brought by MainOne and MTN marked a turning point for Nigeria.

The internet became so accessible, and this, combined with the widespread telephony, allowed people to start to build bigger businesses because they could connect with others more easily. This transformation was also crucial for the development of Nigeria’s banking and fintech sectors. The efficiency we enjoy from innovative solutions like those of Paystack, Flutterwave, and Moniepoint , and services such as POS payments and interbank transfers, wouldn’t have existed. Maybe the only thing we would’ve gotten is USSD technology since it works without  internet access.

The internet happened but Nigeria’s power problem persists

Despite the progress in telephony and internet connectivity, here we are and the power problem still remains unsolved. It’s safe to conclude that the reason power still hasn’t happened is because it depends so much on infrastructure and the government doing the right thing. The government’s attempt to address this by privatizing the power sector at some point was a step in the right direction, but it fell short when they decided to hold onto electricity transmission and they’ve just just made a mess of it. 

Today, Nigeria has an installed generating capacity of 13,000 megawatts, but only about 4,000 megawatts can be evacuated at any time.  If transmission was never in the hands of the government, I’m very sure we would be doing about 100,000 megawatts. But that hasn’t happened yet. There’s been a lot of  interesting news about the government bringing in people to do things better, but any meaningful improvement is still likely to take some years before it materializes. 

Solar power is a big deal

Recently, we’ve started seeing the evolution of solutions that don’t depend on the government; solar energy and the likes. While these solutions are quite expensive, prices are gradually decreasing, making it a more viable option for more people.There are some companies like Imperium from Sterling Bank and Asolar, founded by my friend Hakeem Shagaya, doing interesting things in this space. We also see Lumos and thousands of other smaller players who aren’t established brands also making significant strides in providing solar solutions.

Before now, people used a combination of grid electricity, inverters and generators to take care of their power needs. So they’d use the electricity generated from these sources and store it in batteries for later. But grid electricity and generators have become so expensive now that this approach has become more difficult to sustain. Then people realized that the sun that is roasting us daily offers an abundant source of energy. 

Thankfully, the Nigerian government and its public servants aren’t in charge of the sun, or else they might have made it stop shining. So now more and more Nigerians are turning to solar power as a practical and cost-effective alternative.

Battery technology makes solar energy an even bigger deal

Away from solar, I recently read a report on Bloomberg which said that by next year, global battery production capacity will be five times the demand, leading to a glut. While this might sound like good news, don’t count on it because such gluts can even result in higher prices. However, the long-term impact could be beneficial and I foresee Nigeria being a main beneficiary. A glut could lead to a significant drop in battery prices, and I expect China to be in the center of this, going by their track record.

For instance, consider what they did with manufacturing a vehicle with capabilities similar to a Tesla Model 3 but at half the price and with China’s competitive production strategies, it’s only going to get cheaper. Those guys are crazy good like that. 

Back to batteries, a new battery technology, sodium-ion batteries, is another welcome development. Unlike lithium batteries, which can account for over 60% of the price of a new car, sodium-ion batteries are significantly cheaper, potentially reducing costs by 40-50%. 

You’re probably wondering why we don’t hear about sodium-ion batteries being used in cars. This is because despite the fact that sodium-ion charges faster and are cheaper to manufacture, the major problem is that sodium-ion batteries have less storage capacity compared to lithium- based batteries. However, sodium-ion batteries are a promising option for home energy storage solutions; they’re cheap and durable enough.

Solar + Batteries + Fintechs = Energy Independence for Nigerians

Maybe this is what’s going to happen to Nigeria: the Chinese will come to Nigeria/Africa and start building cheap ass sodium batteries and solar panels that will last for years. And with Nigeria close to the equator where the sun shines the living daylight out of everybody, we’re good.

Recently, I was on a call with Hakeem Shagaya and he told me about a power solution they could get for me. The solution he described is 5 kilowatts, about the size of a fridge and costs around N5 million and can be paired perfectly with solar panels. But I have 24/7 power where I live now so I don’t need it, but If I were still in my former house, I would have invested in it without hesitation and just gone off grid electricity completely if I wanted to.

Now imagine how much more widespread the adoption of this solution would be if it was cheaper?  And the great thing about solar panels is that they only lose about 25% of their capacity in 10 years, and they can last up to 20 years. Even for those who might not be able to afford sodium-ion batteries, combining them with traditional lead-acid batteries could still offer a practical solution

With these developments, financial service providers can also plug into this and use the opportunity to introduce credit solutions for people to access solar and battery technology on credit and pay back over time. This is what we’re doing at my company, Lendsqr; looking for lenders who really want to get it on these innovative things and fund people who want to buy these solutions and gradually achieve their energy independence.

Companies like Lumos and Asolar are already doing great stuff with Energy-as-a-Service which allows people to access energy solutions even if they cannot afford the upfront costs. They offer energy solutions with flexible payment options, and if you miss any payments, they can turn off your energy unit completely.

Nigeria’s energy revolution is already here 

Looking ahead, I see a significant shift towards energy independence in Nigeria as more people embrace solar energy and battery technology. And with this, the grid electricity transmission companies are dead in the water. The Gencos may survive but people would have moved on to covering their houses with solar panels.

This means that if the Chinese do this very well, they can just forget about trying to dominate the developed foreign markets who already have everything, and instead, take advantage of the  immense opportunities to directly supply and manufacture these affordable and high-quality solutions in African markets.

I just hope the government doesn’t try to meddle with the developments in this sector. If they want to get involved, they could support by making sure the taxes, tariffs, and duties associated with these solutions are next to nothing. 

I remember when we used to talk about fiber optics, and everyone thought it was a big deal. Now fiber is everywhere, the adoption of internet services like Starlink is growing. Yes, some of these solutions are still expensive but one day somebody will copy them in China and flood the market with cheaper alternatives and this is definitely something I look forward to.