By Progress Godfrey

Growth in Nigeria’s digital economy may be constrained by an increasing shortage of skilled manpower, a development that industry experts say puts the estimated $11 billion annual industry revenue at risk.

It also threatens Nigeria’s ambition to increase the Information and Communication Technology (ICT) sector contribution to Gross Domestic Product, GDP, to 21 per cent by 2027.

While output from the ICT sector continues to accelerate, new data and industry insights show that the supply of industry-ready talent is lagging far behind demand, creating a structural gap that threatens sector productivity, investment confidence and value creation.

Speaking at a one-day public hearing organised by the Senate and House of Representatives Joint Committees on ICT and Cybersecurity on the National Digital Economy and E-Governance Bill 2025, the Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, said ICT, which contributed about 16 per cent to GDP in previous years, is now reaching roughly 19 per cent.

He said the Federal Government’s digital economy is expected to contribute 21 per cent of GDP by 2027 at the backdrop of the agenda to hit a $1 trillion economy.

Official figures underscore the speed of expansion. In nominal terms, the ICT sector grew by 31.63 per cent year-on-year in the first quarter of 2025, far outpacing growth in most other sectors. Quarter-on-quarter, output rose by 8.35 per cent, lifting ICT’s share of nominal GDP to 10.29 per cent.

Analysts, however, warn that the pace of growth is now exposing capacity constraints. While digital payments, telecom services and platform-based businesses continue to expand, the pool of skilled professionals required to design, secure, maintain and scale these systems is not growing at the same rate.

ICT output races ahead of talent

Nigeria’s telecom revolution has been one of its major economic success stories. Since liberalisation in 2001, the Nigerian Communications Commission, NCC, estimates that the sector has created over 500,000 jobs, expanded connectivity and supported productivity across the economy.

Yet the NCC admits that the industry is “heavily plagued” by shortages of skilled manpower. Studies, including a 2024 assessment by the International Telecommunication Union, ITU, show a sharp mismatch between employer needs and workforce capabilities. While firms require advanced digital skills from about 30 per cent of their staff, only around 11 per cent of employees currently possess such skills.

Data from the Digital Bridge Institute further highlight the depth of the challenge. As of early 2025, only about seven per cent of Nigerians aged 15 to 24 reportedly have marketable ICT skills required in a modern digital economy.

What is emerging, analysts say, is not a lack of growth momentum but a broken talent pipeline. Education, certification and entry-level training are failing to translate into industry-ready manpower, leaving firms to shoulder the burden of retraining while slowing execution and raising costs.

Firms count rising costs

Indigenous technology companies say the impact of the skills gap is already being felt in daily operations. Founder and Chief Executive Officer of Unitellas Edge Cloud, Mr. Smith Osemeke, said the shortage of skilled professionals in cloud architecture, cybersecurity and data analytics has become a major constraint.

“Our operations require specialised expertise, but the local talent pool often lacks these competencies. This forces us to invest heavily in internal training and mentorship before deployment,” he said.

According to him, the result is slower project delivery, higher operating costs and limited ability to scale quickly while maintaining service quality.

At Layer3, one of Nigeria’s leading technology services firms, Chief People Officer, Dr. Elsie Nemieboka, said many applicants arrive with certifications that do not match practical capability.

“The majority are not industry-ready. We see candidates with certificates but little exposure to real production environments,” she said, describing the phenomenon as the rise of “paper engineers.”

She warned that the gap is stretching project timelines, increasing rework and accelerating burnout among experienced staff who must compensate for skills shortfalls.

Beyond individual firms, the problem is becoming macro-economic. Digital payments have surged dramatically, with electronic transaction values hitting N1.07 quadrillion in 2024, a 79.6 per cent year-on-year increase.

Transaction volumes rose to 11.2 billion, reflecting the growing reliance of households and businesses on digital platforms.

Industry watchers say this scale of activity requires deeper pools of cloud, cybersecurity, AI and data talent to manage risks and sustain growth.

The Sector Skills Council for ICT estimates that Nigeria could be losing up to $11 billion annually in unrealised digital-economy value due to the persistent skills deficit.

At a nominal GDP of about $248.5 billion, such losses represent a significant drag on growth in a sector expected to anchor Nigeria’s $1 trillion economic ambition.

Although Nigeria attracted more than $2 billion in tech and fintech investments in 2024, analysts warn that investors increasingly factor skills availability into long-term risk assessments. A sustained manpower shortage could weaken Nigeria’s appeal relative to peer markets with deeper technical labour pools.

Experts urge urgent reforms

From a governance and policy perspective, experts argue that the skills gap reflects coordination failures rather than absence of initiatives. Research Chair in Governance and AI at Carleton University, Canada, Professor Adegboyega Ojo, said Nigeria lacks a coherent, system-wide national agenda for digital literacy and talent development.

“What is missing is an integrated approach that spans primary, secondary and tertiary education, ensuring a steady pipeline of skills from foundational literacy to advanced specialist capabilities,” he said.

He warned that without such coordination, Nigeria risks sustaining ICT growth driven mainly by telecommunications while falling short in advanced digital capabilities such as AI, data science and cybersecurity.

The government has rolled out several initiatives to address the challenge. Director-General of the National Information Technology Development Agency, NITDA, Kashifu Inuwa Abdullahi, said the agency plans to train 50 million Nigerians and raise digital literacy to 70 per cent by 2027.

Dr. Tijani also highlighted progress on the 3 Million Technical Talent, 3MTT, programme, alongside investments in digital infrastructure, including a 90,000-kilometre national fibre-optic backbone, deployment of 3,700 new telecom towers and upgrades to Nigeria’s satellite capacity through NIGCOMSAT.

However, experts caution that infrastructure expansion alone will not close the skills gap. Professor Ojo pointed to countries such as South Korea, Canada and the United Arab Emirates, where compulsory digital literacy begins at primary school and talent strategies integrate education, industry and research.

Mr. Osemeke identified structural hurdles, including weak industry-academia collaboration, outdated curricula, lack of incentives for corporate upskilling and persistent brain drain.

He called for stronger public-private partnerships, tax credits for workforce development, specialised tech hubs and apprenticeship-based training models.

Dr. Nemieboka added that universities must play a central role in developing advanced digital and AI skills, supported by significant investment in research infrastructure. She stressed that soft skills such as critical thinking, communication and resilience should become core components of tech education.

Vanguard News Nigeria

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