The prevailing economic downturn has provided fresh opportunities for African leaders to look inwards, especially in the light of fluctuating prices of oil in the international market. One of the ways the continent’s government is trying to increase their foreign exchange earnings is by cutting imports and increasing production in areas they have comparative advantages.

Agriculture and agro-processing provide a ready avenue, and financial institutions have stated that the continent could leverage on diversification into Information and Communications Technology to make the much-needed switch.

For instance, the African Development Bank projects that the Information and Communications Technology market in Africa will be worth over $150bn (N3tn) in 2016, “and creating demand for highly skilled professionals.”

According to experts who analysed the AfDB projections, Nigeria and Kenya in particular are expected to drive these developments and set the bar for an African Silicon Valley or ‘Yabacon Valley’ as they are calling it.

Silicon Valley, a pet name for the southern portion of the San Francisco Bay Area, which is located in Northern California part of the United States, is widely known as a leading hub and start-up ecosystem for high-tech innovation and development, accounting for one-third of all the venture capital investment in the US.

It was in the Valley that the silicon-based integrated circuit, the microprocessor, and the microcomputer, among other key technologies, were developed. As of 2013, the region employed about a quarter of a million Information Technology workers.

On the other hand, Yabacon Valley is a name derived from Yaba area of Lagos, Nigeria. According to industry experts, the area is growing as Nigeria’s technology hub and cluster of hundreds of banking institutions, educational institutions, technology and start-up companies which steadily attract angel investors, venture capitalists, enthusiasts and media people from all over the world.

“This cluster is the major reason why many technology firms are considering opening up shops in Yaba. The term, Yabacon Valley, originally was born from an unintentional act of an absent mind, manipulating the Silicon Valley name to create a nick version for this cluster while writing a story title,” Femi Longe of the Co-Creation Hub, reputed as the leading hub in Yaba, said.

Longe said a Silicon Valley, through CcHub’s i-HQ project, was possible in Nigeria, but did not think it would be proper if it were called Yabacon Valley.

“The goal of i-HQ project, one of CcHub’s core projects, is to build a hotspot for creative ventures where all key stakeholders (academica, industry and government) can find adequate infrastructure, resources and an enabling environment.

“One of the facets of this project was the deployment of high speed Internet fibre optics along Herbert Macaulay Way in Yaba. And from what we are able to gather, that vision is looking like it has been realised, at least for the Yaba area and environs,” Tech Cabal’s Lead Strategist, Ibukun Taiwo, said.

However, an expert in the telecommunications industry in Nigeria, who spoke on the condition anonymity, said neither a Silicon Valley nor Yabacon Valley was realistic in Nigeria.

He said it was all waste of money, stating that the government must forget about Silicon Valley and focus on little things as funding education; that could provide research opportunities for students and professors.

“If they do that, Nigeria will be fine. Our Silicon Valley may not be making apps or software; we can be good in processing our food. We do not need to follow the leads of the Yankees, as they will probably beat us up in any direct competition. We need skills to create our own ideal Silicon Valley and stop follow follow. In addition, that will never happen if we cannot think on our feet. Albeit, without good education,” the expert said.

“Simply, Nigeria should forget Silicon Valley and support Aba Mountain, Kano Pyramid, Akure Plains. These are ones we built ourselves and need not change course to pursue areas we are not prepared for. Any intervention should be to expand and help the clusters we have in some of the cities through good roads, power, etc and stop wasting money in the nation trying to build software hubs,” he added.

The Chief Executive Officer, EDEL Technology Consulting, Ethel Cofie, shared in his views, saying, “The desire to nurture and establish an entrepreneurial ecosystem like Silicon Valley is not necessarily a bad idea, but in an attempt to ‘copy and paste’ a Silicon Valley, we ignore what our inherent advantages are in Africa.”

Cofie, who is also the founder of Women in Technology Africa, said, “We need to have the knowledge and understanding of the best practice, but we have to build a best fit ecosystem.

She said, “Silicon Valley has been 50 years in the making. It is the product of Sputnik-induced competition, a 1960s-induced cultural renaissance and an open-minded, risk-taking approach where failure is accepted.

The EDEL CEO said that the advantage of Silicon Valley was the concentration of talent innovators, start-ups, funders and established technology companies.

She said that Nigeria and Africa in general, on the other hand, had a large pool of entrepreneurs, hence the need to capitalise on an existing base and teach growth from survivalist to scalable technology entrepreneurship.

“We do not have a large pool of venture capital or angel networks, but in lots of African countries, Nigeria inclusive, we have crowd funding in its purest forms. A million people investing one dollar in a company gives the company a million dollars.

“We cannot be a ‘cut and paste’ Silicon Valley but we can create entrepreneurial ecosystem that enables a critical mass of entrepreneurs and affects our economies in positive ways,” Cofie added.

In a contradictory view, the Founder of Africa Innovation Foundation, Jean-Claude Bastos De Morais, at an event in Lagos, said that an African Silicon Valley was a reality.

He said the key was not to compare it to its Californian counterpart because the African start-up scene was evolving against a very different set of dynamics.

“These dynamics, driven largely by a bulging youth population, have leapfrogged many African economics into the tech era. From Nigeria to Kenya, Egypt to South Africa, we are seeing the emergence of technology-based economies,” Morais said.

He said that Kenya as a mobile economy, and Nigeria which is fast becoming a mobile economy, were quickly becoming the continent’s tech hub. “Already, global heavyweights like Google, Intel and IBM have set up shops in these countries,” he said.

He explained that with infrastructure-sharing initiatives reducing the costs of Internet access and mobile telephony, there would be more innovations. Such innovations, he said, would prompt the existence of a Silicon Valley.

Other factors that could prompt International bandwidth and data networks have become widely available. Unlike the West, where populations are ageing, Africans are less averse to adopting new technological trends, changing the way they bank, trade, farm, learn and consume services.

“So, while there may not be a structure likened to California’s Silicon Valley here in Africa, a hybrid version is well underway,” he added.

But the External Relations Leader, West Africa, at IBM, Olumuyiwa Moyela, disagreed with Morais, stating that having shops in these countries was not a guarantee that Silicon Valley would be attained.

“It goes beyond academia, industry and environment, but innovations. When there are no groundbreaking innovations coming out from Nigeria, then we cannot be talking about achieving a Silicon Valley in Nigeria.

“For instance, so many people have kept regarding the Computer Village as Nigeria’s Silicon Valley, but they fail to understand that the stakeholders at Computer Village are not creating innovations, but only selling other peoples innovations,” he added.

PUNCH. 

Ruth Obih is the Chief Executive Officer of 3invest Limited, a real estate advisory and investment firm. In this interview with MAUREEN IHUA-MADUENYI, she says investment in local production, proper economic planning and massive investment in the construction sector will help Nigeria to come out of recession.

The economy is currently in a recession, what effect is this having on real estate transactions?

Recession is a temporary period of economic decline. The International Monetary Fund made a global economic surveillance and all of a sudden, everyone is in a panic. Earlier in the year, the IMF stated that emerging markets and developing economies were now confronting a new reality of lower growth, with cynical and structural forces undermining the traditional growth paradigm. It further advised that these nations should focus on the critical area of infrastructure, where power, transportation and housing are especially important. If we must panic then, we must heed these warnings.

On its effect on real estate, I must also state that a lot of this has to do with us not being a commodity producing country. When you have to rely heavily on trade, then you lack resilience. I must advise that we should focus on the positive impact of times like these. Produce and plan better, especially when it comes to spending. We must be cash-backed. However, it is time to invest and every investor must make hay while the sun shines.

What steps should stakeholders take to help the industry recover?

Use of technology, increase in local production and proper economic planning will be of great use. Access to data is key. The government must encourage and invest in research. In addition, I think it is high time we started looking at the positive effects of this recession rather than living in fear of the negatives.

Also, we must refrain from negative media utterances, which induce investor apathy. These and many more drove our decision and focus for this year’s Real Estate Unite conference as ‘Looking inwards to fill the gaps’.

As industry professionals, we believe it’s time to blow the whistle and begin to look inwards as a great nation with huge potential. We must act fast and begin to exploit the potential that these critical areas, especially the housing sector bring; not only does it help to secure the nation’s tourism and leisure sector, it will help increase the Gross Domestic Product.

At Real Estate Unite conference, which holds in October in Lagos, our goal is to identify the gaps impeding progress in the key areas of the Nigerian economy and understand the new growth drivers in today’s local capacity and resource-driven market.

Nigerians are known to invest in real estate outside the country, how much of this has been recorded in recent times?

I must state that in real estate investing, location and not country of investment is important. It doesn’t matter where you decide to invest as far as the returns favour your investment. Real estate investing must be approached as a business with adequate cash flow planning. A true investor who has great knowledge about real estate understands that a period of downturn is a buyers’ market; hence, the best time to invest is now no matter the location.

What is your view about the glut of luxury properties in the market, while the country battles a huge housing deficit?

Developers must source and make use of data. The first point of call for any developer should be the planning authorities to ascertain the rate of approvals for the luxury or high-end properties in question. This information will prepare your sales strategy. Yes, we have a healthy demographic but what is our buying habit and power? What percentage of this power is resilient? There is indeed glut in the luxury property market, likewise the Grade A office sub-sector. There is a high rate of unsold and unleased properties today. Are you aware that we have also witnessed developments where demand outweighs supply?  Planning must be airtight with strategic sales and exit plans. On the other hand, the housing deficit we face in Nigeria today is self-induced and both the private and public sectors have individual roles to play.

Recently, the price of cement was reviewed upwards and some stakeholders are against the increase. What’s your take on this?

Nigeria as a country must embrace the use of technology. Imagine if you didn’t have an elevator to take you from the ground floor of the Burj Khalifa to the topmost floor of the world’s tallest building, how long in your opinion will it take a man to reach the top floor if Elisha Otis did not invent an elevator in 1852? Are there alternative building technologies?  Use them.

PUNCH.