Nigeria's Digital Economy to Exceed $16bn by 2030 - LBS

As Nigeria pushes for a digital revolution to drive economic growth, the Lagos Business School (LBS) has projected that the country’s e-commerce market will exceed $16 billion by 2030.

The Dean of Lagos Business School, Professor Olayinka David-West, stated this on Saturday in Lagos, at the 35th annual conference of the Finance Correspondents Association of Nigeria (FICAN).

The conference, which had the theme “Bracing for the Digital Economy in Nigeria: Taxation, Banking and Finance”, focused on the need for the country to take pragmatic steps towards scaling its digital footprints by harnessing its vast human capital, entrepreneurial dynamism, and strategic policy initiatives to create millions of jobs and generally drive economic growth.

Professor Olayinka David-West, who was represented by Professor Akintola Owolabi, Department of Cost and Management Accounting at LBS, described the theme of the conference as “timely and vital for Nigeria’s sustainable development”.

The conference brought together industry stakeholders from the Federal Inland Revenue Service (FIRS), Central Bank of Nigeria (CBN), and top banks to share insights on the way forward for Nigeria’s digital economy.

The Dean of LBS noted that activities by pioneering platforms like Jumia and Konga have continued to fuel e-commerce growth, while logistics companies like Kwik and GIGL serve as examples of how digital technologies are creating new value chains, increasing productivity, and opening up new business opportunities.

Looking at Nigeria’s digital landscape, the Nigerian Communications Commission’s 2024 report revealed that internet penetration has reached 43.5 per cent, with over 163 million Nigerians online as of March 2024. The telecommunications sector contributes around 18 to 20 per cent to Nigeria’s GDP, highlighting the vital role of information and communication technology (ICT) as a driving force in the economy.

David-West maintained that talks about Nigeria’s potential for digital revolution go beyond statistics, adding that “it reshapes commerce, services, and livelihoods.

“Our burgeoning e-commerce market, projected to exceed $16 billion by 2030, is fuelled by trailblazing platforms like Jumia and Konga,” she stated.

“Innovative logistics startups such as Kwik and GIGL illustrate how digital technologies spawn entirely new value chains, enhancing efficiencies and expanding economic opportunities. Such developments promise exponential employment gains, diversification away from oil dependence, and transformative service delivery across sectors.”

She underscored the performances of Nigeria’s fintech ecosystem, which attracted over $2 billion in investments in 2024, retaining its position as Africa’s “financial technology powerhouse”.

“This capital influx is propelling groundbreaking innovations that redefine financial transactions and inclusion.”

The economic scholar highlighted efforts by leading Nigerian banks, including Access Bank and GT Bank, in harnessing cutting-edge technologies like Artificial Intelligence (AI) and Machine Learning (ML) to enhance fraud detection, personalise services, optimise credit scoring, and deploy AI-enhanced customer support.

Speaking on taxation within the context of the digital economy, she noted that there are both challenges and opportunities for revenue generation. She highlighted the government’s efforts in generating revenue through taxes from digital services. These, according to her, include a six per cent Digital Services Tax (DST) on non-resident providers and the N50 electronic money transfer levy on transactions above N10,000.

“Digital payments and mobile money have the potential to formalise the informal sector, boost tax compliance, and strengthen economic planning.”

“The interconnection of digital transformation across banking, finance, and taxation is a powerful catalyst for Nigeria’s economic growth,” she stated.

She stressed that “seamless digital payment systems facilitate efficient tax collection, broaden financial inclusion, and provide critical data for evidence-based policy-making and enforcement.”

She, however, warned about challenges that need urgent attention. These include infrastructure deficits – unreliable power supply and limited broadband access in rural areas – and also a shortage of digital skills that restrict economic participation.

She emphasised the need for regulators to strike a balance between fostering innovation and ensuring consumer protection as technological innovations continue to unfold.

FICAN chairman, Mr Chima Titus, said that globally, the digital economy has become “a critical backbone of modern growth.”

Mr Titus noted that there is an ongoing transformation in Nigeria and Africa, driven by data, digital payments, and artificial intelligence, among others.

He also re-echoed the ICT sector’s contribution to the country’s GDP, adding that digital payment transactions exceeded ₦600 trillion in the first half of the same year, a 22 per cent year-on-year growth, while mobile money usage has surpassed 73 million, successfully reaching rural communities that were previously excluded.

The FICAN national chairman highlighted efforts by the CBN to solidify these advancements, such as the introduction of the Payment System Vision 2020, “a comprehensive blueprint for our digital future, incorporating AI, blockchain settlements, and cross-border payments enabled by the African Continental Free Trade Area.”

He added that no robust digital economy can flourish without an equitable and effective tax framework.”

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Victor EZEJA

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Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X