Amazon, global e-commerce giant,
is on the verge of not only overtaking Apple as the world’s most valuable
company but the first company worldwide to hit the $1 trillion mark. Bullish
projections indicate that this could happen in late August 2018 if Amazon’s
stock, which has surged 83 percent over the past one year, continues its impressive
revenue growth.
Aided by an astronomical increase
in online shopping and growing patronage of cloud computing by businesses, an
area in which Amazon Web Services dominates, Amazon has continued a remarkable
run which saw it dislodge Microsoft Corp. as the No. 3 U.S. company by market
capitalization in February 2018.
A few analysts have, however,
attempted to douse the enthusiasm, citing the fact that stock gains are not a
reliable predictor of future performance and also in view of the fact that
Amazon’s recent streak has been quite outstanding. For these, the expectation
is that Amazon’s stock will rise 10 percent within the next year to reach
$1,700, which would give it a market value of $823 billion. Furthermore, data
from Thomson Reuters shows that Apple's stock price will expectedly rise 11
percent and reach $195 within the next 12 months, which would put its market capitalization
at $989 billion, keeping it just ahead of Amazon.
The overwhelming view though
remains: should Amazon's stock keep up the exceptional growth trajectory seen
over the past year, the company's market capitalization would hit $1 trillion
in late August while Apple would reach $1 trillion around a week later if its
stock price continued to rise at the same pace seen over the past year.
There is no denying the fact that
Jeff Bezos, founder and owner of Amazon, has shown the world just how far ecommerce
and a disruptive approach can go in leading a business to record-shattering
heights.
To a smaller extent, a certain
Jack Ma who failed repeatedly in school and now the brains behind Alibaba,
another e-commerce giant making waves in Asia, has also shown what can happen
when e-commerce meets opportunity and a conducive/supportive business
environment.
To put Amazon’s mind-blowing strides
into sharp relief, it is worth considering a few facts.
Nigeria’s 2018 fiscal budget,
which was recently passed by the National Assembly is about N9.1 trillion. This
figure, which covers the country’s entire spending for the year, is just about
$25b – a paltry 2.5 percent of Amazon’s projected $1 trillion worth.
Also worth considering is the
identity of the first five most valuable companies in the world.
Of all the most similar
attributes displayed, one thing binds Apple, Amazon, Microsoft, Alphabet
(Google) and Facebook: they are first and foremost technology companies, all of
whom, as described by Forbes in its recent valuation, have successfully consolidated
their power in recent years by leveraging cutting-edge technology, driving huge
profits and soaring market values.
There is indeed no doubting the
power of technology as a leveler and game-changer. Technology can produce
power-houses, global conglomerates with market capitalization figures that can
make the annual budget of several nations pale into insignificance.
What has remained perplexing is
the inability or refusal of the Nigerian government to see/appreciate the power
of technology as perhaps the country’s best chance of closing the ever-widening
gap between it and the advanced countries of the world. Why is there hardly any
meaningful form of government support for tech start-ups and other players in
Nigeria’s technology sector?
Entrepreneurship in Nigeria is
not a task for the faint-hearted.
The Nigerian business
terrain/economy, blessed as it is with an overwhelmingly youthful population
and the potential to catapult a business overnight sadly, still remains a very
tough and challenging one. Start-ups here face a herculean fight staying
afloat. A recent survey showed that over 70% of start-ups in Nigeria go down
under before reaching their fourth anniversary. Many of these go unannounced
due to the stigma associated with failure in these parts. Indeed, one of the
biggest fears of an entrepreneur in Nigeria is the fear of failure. This is
opposed to the case in advanced climes where business failure is treated as a
cathartic process, one that is chronicled and encouraged as a learning curve
for the person involved and others.
It is worse when you are a
start-up entrepreneur in Nigeria’s technology sector, an industry in which the
government has so far shown little more than a passing interest in and no
demonstrable commitment; a battle of attrition for many.
It is a conundrum that has defied
all forms of rigorous introspection, especially considering the seeming willingness
of the government to commit sizeable funding and support to agriculture.
Perhaps, we are better reminded
that we live in the 21st Century, one in which knowledge has become
a right; where new technologies such as Robotics, Artificial Intelligence, Big
Data and Machine Learning, among others, is redefining the scope of work,
business and human engagement; where electric, driver-less or flying cars could
soon see fossil-fueled ones become an anachronistic relic; where the power of
technology and industrialization has made China, once derided as a paper tiger,
a major world power giving the United States of America a good run for its
money and where technology has transformed the four (actual) Asian Tigers of Hong
Kong, Singapore, South Korea and Taiwan to global hubs of innovation and
manufacturing excellence.
Today, Amazon has created jobs
for over half a million people in America – a figure that is still rising. And
in recognition of the company’s contribution to the United States’ economy, the
e-commerce giant paid zero federal taxes in 2017. It is also being rewarded
with further tax breaks at the state and local level.
How many potential Amazons would
emerge from the Nigerian tech sector, should the Nigerian government toe the
path its United States’ counterpart did with Amazon? Possibly enough to place
our technology narrative and Nigerian tech companies/start-ups on the path of
global reckoning.
Here in Nigeria, the country can
boast of Leo Stan Ekeh, founder and Chairman of the Zinox Group – a technology
conglomerate that has empowered thousands of Nigerians and through which he has
created direct and indirect employment opportunities for millions – the closest
entrepreneur in Jeff Bezos’ terms in these parts. It is instructive to note
that he has also remained true to his chosen field of technology in spite of
the considerable lure of quicker returns or existence of more institutional
support in other sectors such as banking and the once-mighty oil/gas industry.
In Konga, one of Nigeria’s most
prominent e-commerce pioneers which Ekeh acquired from erstwhile investors
Naspers and AB Kinetic and which recently merged forces with another bold
entrant Yudala, the country can also count on a business that has clear designs
on improving the lot of Nigerians through a suite of creative avenues and
expansionary moves.
One of these is a well-publicized
impressive retail roll-out plan which is bound to see Konga establish a
presence in Nigeria’s 774 local governments, a cost-intensive feat that will
create tons of employment opportunities for residents in these various
locations.
Renowned for its uncompromising stance
on quality, a tradition that Yudala, which it merged it, was well-known for;
the new Konga that emerged in May 2018 is now widely recognized as the best
source for genuine products in Nigeria’s e-commerce space - a burden that has
also reportedly seen the owners of the business invest in massive warehouses
nationwide to enable it scale inventory/stocking, another investment that is
bound to throw up additional jobs for Nigeria’s teeming unemployed youths.
But can an Ekeh, for instance,
count on the government for tax breaks, tax holidays or any other form of
incentives to encourage him to do more?
Your guess is as good as mine…
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