How the Accountancy Profession Will Help Achieve Nigeria’s Digital Future
To the consumer, digital transformation can seem seamless: new services and products are appearing all the time, and with the push of a button we are discovering new levels of convenience and efficiency. But behind every success is hard work, careful planning, and constant adaptation. Given the complexity of this transformation, at almost every stage of the journey, professional accountants can help Nigerian businesses achieve their financial goals and become market leaders.
A solid foundation for digital growth
The key elements of a company-wide transformation are taking place. Already, around 104 million Nigerians access the internet and 33 million are active on social media, with WhatsApp, Facebook, YouTube and Instagram as the most used social media platforms.
As increasing numbers of Nigerians join their peers online and connect through social media, higher expectations are expected to follow for digital services, such as e-commerce and high-speed internet access.
The democratization of access to technology has already disrupted major industries and reshaped day-to-day decisions. For example, the widespread use of on-call vehicle drivers, like Uber, has disrupted the traditional taxi industry in many countries. We are also likely to see decentralization in the financial sector – with a direct link to the accounting profession.
Partnership for transformation
As an innovator in high-tech services, Nigeria has already made an international statement: last year, Nigerian fintech start-up Paystack was acquired for $ 200 million, while another start-up local fintech company Flutterwave announced that it had raised $ 170 million. It is certain that continued innovation and growth will come as the large and dynamic young generations of Nigeria bring their skills and passions to the job market.
Of course, the rest of the world is transforming as well – and the global pandemic has accelerated that trend. In a recent McKinsey survey, many business executives reported that their companies responded to the pandemic by moving 20 to 25 times faster on digitization than they had thought possible. Necessity has forced the pace of change and businesses of all sizes are adjusting to this new reality.
Most Nigerian businesses are small and medium enterprises (SMEs). Like SMEs around the world, they face a steep learning curve in managing their finances in a context of rapid digitization. For tech-based start-ups, valuation is crucial to raising funds and gaining trust. Professional accountants are trained to assess finances and make projections; they can help business owners understand exactly how a business might be struggling – for example, following a decline in in-person transactions and an increase in e-commerce – and respond accordingly as an organization.
As new digital SMEs form, they will have questions about getting started, including things as basic as applying for a business loan. Before long, non-financial entrepreneurs will find that the finance function is invaluable in understanding how a business operates in real time, how it has performed in the past, and what to expect next.
Beyond the right set of technical skills, the accounting profession also has an international code of ethics, with principle-based guidance to serve the public interest around the world. Professional accountants also have an exceptionally broad view and in-depth understanding of how organizations create long-term value. They are natural advisers for SMEs looking for candid, knowledgeable and professional advice on financial management and business strategy.
Take action to build a sustainable economy
Nigeria has the building blocks for continued growth and prosperity. The question now is how Nigeria can ensure that its digital economy reaches its full potential in the long term. The global digital economy is measured in the trillions of dollars and will only grow. Each country will feel these effects and seek ways to compete and capitalize.
Digital transformation is not an isolated trend. We are in a long period of turmoil and uncertainty with many issues including human health, the health of the planet and equality. Technology can bring better health care, more accessible education, wider employment opportunities and remarkable economic growth to meet these challenges. The key will be to prioritize sustainability and equity in how Nigeria’s digital economy develops and how its benefits are felt.
Nigeria must build an economy capable of withstanding new crises, creating sustainable jobs, developing relevant skills and rewarding innovation while protecting the environment – the ultimate source of security and livelihoods. The current COVID-19 and climate change crises are forcing decision-makers today to plan not only months or years, but decades as well. It is not an easy task and countries all over the world are facing similar problems. Nigeria, as a country of SMEs and a leader in digitization, can find the right advice and skills through partnering with the accountancy profession.
Processes and plans need to be defined today. Every organization will need a strong strategy to prepare for digitization; everyone will be looking for trusted advisors. Professional accountants, who master finance and are guided by an ethical duty to serve the public interest, are well qualified to support companies in these changes.
The talent pool in Nigeria is vast. Building a stronger, more sustainable economy – based on building strong manufacturing and service industries – will require the skills of its young and aspiring digital entrepreneurs.
. Johnson is the president of the International Federation of Accountants (IFAC).