In 1917, the largest publicly traded company in the United States was US Steel. Fifty years later, in 1967, the largest recorded was IBM. Over those fifty years, American leading companies had transmuted from building and construction infrastructures to digital infrastructure companies. Before those, food companies were dominant. Today, the largest US publicly traded companies are knowledge companies like Apple, Google and Microsoft.
Simply, the US has moved from fundamental infrastructures to creating wealth on numbers (yes, data) just as Greek philosophers had postulated many centuries ago. I expect in 50 years for the leading companies to become firms where the knowledge creation is autonomous, with artificial intelligence, unbounded by pure human capabilities. In other words, dynamic numbers souped by that new factor of production called “knowledge”.
In Nigeria today, we are at the phase of that 1917 and 1967 as we are still building the constructing and core digital infrastructures with MTN, Airtel, Nestle and Dangote Cement leading the stock market. In 10 years, some of the finest knowledge startups in Nigeria like Interswitch, Flutterwave (most valued financial institution in West Africa), etc, if they list in Nigeria, will become the dominant companies in the stock market. If that happens, it will mean that our knowledge companies have also become dominant. (Today, they’re missing in the Nigerian stock exchange).
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Good People, the wealth geography will change: in the decade of the 2030s, I expect 80% of the richest Nigerians to have made money from technology. Nigeria is having its finest cambrian moment on the formation of enduring companies.
The 1990s gave us the new generation banks. The 2000s brought voice telephony. The 2010s ushered mobile internet. The 2020s would deliver the era of application utility across industry sectors and market territories.
agtech – we believe that agtech companies have great promises in the Nigerian stock exchange as the exchange likes agro companies and values them fairly well. So, the possible startups to thrive in the exchange will be agro-related ones, relying on how successful companies like Okomu Oil and other agro companies have become. That agtech represents companies in this domain which are going to rise in the next decade.
In the last 6-9 years, Okomu Oil (a big agro company) and similar firms have outperformed most sectors, but telecoms, in the exchange. Yes, if you picked Okomu or Presco as your investment a couple of years ago, your Salah or Christmas will be looking bigger now. Indeed, they have returned solid numbers, superior to most banks.
But they’re yet to unlock core latent opportunities in the agro-processing category. We think their own “fintech” moment will happen just as fintech, superimposed on banks, delivered alpha. The “fintechs” of the agro-sector look promising.
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Our economic fundamentals are quite different from those of the United States, basing our economic ascension on what tech startups do will be missing the mark by wide margins. Our market is not valuations market, it’s more intrinsic. In the US, finance guys and lawyers are the most powerful, Nigeria is not wired that way.
The premier league with all its hype and glory, Oxford, Cambridge universities bring more investment to the UK than all the premier league noise, there is a reason for that.
We must aim to build our economic fundamentals on things that are more solid and robust, high valuations of software companies won’t do the trick, because we do not control or own nothing in the grand scheme of things.
If we build our fundamentals on education, culture and entrepreneurial capabilities, we will do more exploits; first is to deepen our knowledge and understanding of systems building, it’s the fulcrum of everything.