A new report has revealed the potential for Nigeria’s cloud adoption commercial hub to release 30.2 trillion naira of extra-economic value over the next 10 years. This will improve the country’s cumulative gross domestic product (GDP) 0.36% by boosting the utilization of cloud systems.
The report which evaluates the relationship between public utilization of cloud systems, national productivity, and economic development in Nigeria was issued by Amazon Web Services, Inc. (AWS), an Amazon.com, Inc. company (NASDAQ: AMZN).
The report which was carried out by Telecom Advisory Services LLC and controlled by Raul Katz, Director of Business Strategy Research at the Columbia Institute for Tele-information (Columbia Business School), furnishes an innovative econometrical way of computing the aggregate productivity profits realized by economies that utilize cloud system. It expands former economic analysis aimed at firm-level productivity by developing cloud adoption as engineering national productivity and economic growth.
Cloud utilization added 0.02% to the regional GDP, amounting to about N82.9 billion. The Director of Business Strategy, Katz said “Until recently, research on the economic impact of cloud was focused at the firm-level, understanding the microeconomic benefits associated with cloud adoption (for example, capital efficiency, contribution to product development, and the like). These studies, while valuable, did not quantify the aggregate effect of cloud on the economy in a similar way to what has been done in areas such as broadband Internet. To address this gap, our team at Telecom Advisory Services developed a state-of-the-art econometric model, leveraging a global series of data on cloud adoption between 2014 and 2021.”
Amrote Abdella, General Manager (G.M) for Sub-Saharan Africa at AWS, explained that the report underscores the immense potential for Nigeria, and the SSA region, to harness cloud computing and expedite economic growth. By increasing the current average cloud penetration, the region can unlock additional economic value. AWS is committed to supporting its customers and partners in Nigeria throughout their cloud journey.
Cloud technology will be crucial in driving innovation, boosting productivity, and scaling businesses in the region over the next decade. Two years ago, just 27% of companies in the country utilized cloud computing, which is far less than the adoption rates of 49% in Western Europe and North America. This goes to show that there is a massive opportunity for Nigeria to boost its cloud penetration and achieve large welfare.
The G.M. concluded saying, “With the current forecast, the economic impact of the cloud is undeniable and is poised as a key catalyst for economic prosperity. As such, it is important for businesses in the region to invest in cloud computing technology to stay competitive and boost their economic potential.”