Amazon Web Services (AWS) has said cloud adoption in Nigeria is expected to yield N30.2 trillion economic value between 2023 to 2033.
AWS said this in a new report titled ‘The Contribution of Cloud to Economic Growth Focus on Nigeria’ where it quantifies the relationship between public cloud computing adoption, national productivity, and economic growth in Nigeria.
“The Nigerian market to unlock N30.2 trillion of additional economic value over the next decade (2023-2033), representing 0.36 percent of Nigeria’s cumulative gross domestic product (GDP) by accelerating adoption of cloud,” AWS said in the report.
Raul Katz, director of Business Strategy Research at the Columbia Institute for Tele-Information at Columbia Business School (New York) said until recently, research on the economic impact of the cloud was focused at the firm level, understanding the microeconomic benefits associated with cloud adoption.
He cited an example of capital efficiency, contribution to product development, and the like, saying 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,” Katz said.
According to the report, cloud adoption contributed 0.02 percent to the regional GDP, generating an economic value of N82.9 billion. Over 71 percent of this impact can be attributed to the national productivity gains or so-called ‘spillover effects’ on the economy. The remaining 29 percent is driven by cloud spending from both public and private organisations.
It said on average, Nigeria experienced a 0.01 percent increase in GDP for every 1 percent increase in cloud adoption by Nigerian organisations. “This is behind the SSA regional leader, South Africa, where a 1 percent increase in cloud penetration yields a 0.06 percent increase in GDP.”
Amrote Abdella, general manager for Sub-Saharan Africa at AWS, said: “This 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.
“We firmly believe that cloud technology will be crucial in driving innovation, boosting productivity, and scaling businesses in the region over the next decade,” She said.
Abdella said the study demonstrates that the economic impact of cloud computing is guided by returns to scale – greater adoption of cloud computing will lead to proportionally greater productivity gains and economic impact.
“In 2021, only 27 percent of organisations in Nigeria adopted cloud computing, significantly lower than the adoption rates of 49 percent in Western Europe and North America. This represents an opportunity for the country to enhance its cloud penetration and reap substantial benefits.
“With the current forecast, the economic impact of the cloud is undeniable and 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,” Abdella said.