Nigeria has a vibrant and growing tech sector. In a survey of tech firms conducted in 2018, we find that most firms start small but grow quickly, more than doubling their size in the few years since the start of operations. Many are addressing inefficiencies in distribution of goods and services. But firms are still hampered by the business environment, notably unreliable electricity and lack of access to credit. Most suffer significant power outages, forcing them to purchase generators. Few firms have access to financial institutions or venture capitalists, relying instead on family and professional networks. Finally, tech firms employ very few women. While the Nigerian government has made the tech sector a priority, it needs to do more to improve the basics of the business environment. The government and the private sector must also take steps to increase the participation of women in the tech sector.
How Do African Firms Respond to Unreliable Power? Exploring Firm Heterogeneity Using K-Means Clustering - Working Paper 493
While previous studies have found a positive relationship between the reliability of power and firm growth, we find that such a clear relationship seems not to prevail. In other words, some firms are able to cope with an unreliable supply of power while many others do not.