Uber Leaves Nigeria: What We Should Learn About Our Economy

Uber has left Nigeria.

After twelve years of operating here, the ride-hailing company announced it would stop its Nigerian operations from September 2. Many people saw this as a sudden decision, especially after the recent banning and unbanning of Uber and similar companies from Nigerian airports. But for those who closely watch the economy, this was something that was likely to happen; the only question was when.

This announcement has sparked more talk about Nigeria’s business environment, government rules, how investors are treated, and the challenges of running businesses in the country. But we should be careful not to jump to conclusions about why Uber left.

Uber has not said that Nigerian regulations, high fuel prices, airport restrictions, or any specific government policy pushed it out. The company also exited Uganda at the same time, saying it was part of a review of its business priorities and investment focus. They clearly stated that their departure was not linked to the recent disagreements over e-hailing services at Nigerian airports.

So maybe a better question is not just: Why did Uber leave? Instead, we should ask: What does twelve years of Uber operating in Nigeria show us about the economy we have built beneath the app?

This is where we need to face some uncomfortable truths.

A Digital App on an Analogue Economy

Uber, as a global company in Nigeria, did not build Nigerian roads. It did not create our addressing system. It does not check if vehicles are safe, issue driving licenses, manage the roads, create national identities, enforce contracts, or figure out if streets are properly mapped.

Uber simply puts a tech platform over systems that already exist.

Where those systems work well, its application can do amazing things. A passenger can be identified, a driver verified, and a vehicle tracked. A location can be set, payment made electronically, complaints handled, and bad behavior punished. Insurance can respond when something goes wrong, and credit can be given because we can see the economic history of a person.

But what happens when that digital layer is placed over an economy where many of these systems are still incomplete? For me, that is the bigger Nigerian story.

Modern transport apps rely on good location information. Streets need names, buildings need addresses, routes must be mapped, and changes need to be shown quickly. Navigation needs a physical environment that is organized enough to be turned into code. Apps like Uber depend on the infrastructure a country has built, so their effectiveness is partly based on that infrastructure.

We often confuse the wide use of mobile phones, banking apps, and social media with the digitalisation of the economy itself. They are not the same.

The fact that millions of Nigerians can send money or upload videos does not mean we have a well-organized digital economy. A truly digital economy needs more than devices or access to apps. It needs digital identity, digital location, interconnected records, traceable transactions, institutional memory, and reliable enforcement.

Nigeria has made big strides in some of these areas, especially payments. In many ways, our payment systems have digitalized faster and deeper than the economy they are meant to serve. Yet that progress has not properly transferred into real sectors of the economy. Instead, financial operators have often taken advantage of this to overprice services, taking value rather than improving productivity.

Many parts of our informal economy, transportation system, education system, property system, and public administration still rely heavily on human judgment. Where there is too much discretion, unpredictability often follows. That is why our economy can feel both very digital and very analogue.

After importing vehicles, many of which have already been used elsewhere, we operate them on roads that quickly damage suspensions, tires, and other parts, raising maintenance costs for drivers. Those costs eventually come back to passengers through higher fares. Bad roads lead to higher maintenance costs; higher maintenance costs lead to higher transport fares; higher transport costs raise the costs of moving workers and goods; and those costs eventually show up in the price of almost everything.

We can send money in seconds yet find it hard to say exactly where someone lives. We can open accounts online while keeping several ID systems that do not work as one complete identity system. We can create advanced financial apps yet struggle to build useful credit histories for millions of active people. We can call a vehicle through an app using satellite technology, only for it to navigate poorly named streets, avoidable potholes, or places with hard-to-find addresses.

Even our roads are part of this supposedly digital economy. A digital map is only as good as the physical environment it describes. An app can identify a destination, calculate a route, and estimate a fare; it cannot fix the road, stop flooding from blocking a street, or prevent potholes from damaging a vehicle’s suspension.

After importing vehicles, many of which have already been used elsewhere, we operate them on roads that quickly damage suspensions, tires, and other parts, raising maintenance costs for drivers. Those costs eventually come back to passengers through higher fares. Bad roads lead to higher maintenance costs; higher maintenance costs lead to higher transport fares; higher transport costs raise the costs of moving workers and goods; and those costs eventually show up in the price of almost everything.

What looks like an ordinary pothole is, therefore, also a productivity problem.

The app sits on top of the country we have built. No amount of sophistication can fully make up for the weaknesses in the infrastructure below it.

Identity Is Economic Infrastructure

This is why I find the ongoing National Digital Alphanumeric Postcode project very important.

NIPOST is working on a GIS-enabled postcode meant to give a unique digital location for every addressable building in Nigeria. And that is the key phrase: every addressable building. So what happens in informal settlements around city centers or in rural areas on the outskirts of local government headquarters?

I don’t expect the project to solve every problem right away. But I hope it will prepare for these challenges and find practical solutions, along with the many others that will surely come up. We should not have to start over and reinvent the system, especially since this is not Nigeria’s first try at digitalizing its addressing system.

I am hopeful that this time the system will be properly set up and, more importantly, connected with other government and commercial systems. If that happens, its importance could go beyond just delivering letters. A reliable address is economic infrastructure, just like citizen identification.

Nigeria already has the National Identification Number, Bank Verification Number, driver’s license, passport, voter ID, and several databases created for specific purposes. The goal should not necessarily be to remove every functional identifier. It should be to make sure these systems can reliably identify the same person and work together for legitimate reasons, following proper privacy protections.

This brings us to the Office of the Coordinating Minister of the Economy. I understand that a lot of work may already be going on behind the scenes to connect these ID systems. But without effective coordination, the process could go on forever. What looks like a simple administrative skill can have serious economic effects.

The Central Bank saw this gap years ago. Even with Nigeria’s existing national ID systems, the banking industry still needed a unique identifier that could work across banks. This led to the introduction of the BVN while the national ID system was still being developed. The fact that the financial sector had to create its own ID system shows how disconnected our institutions are. More importantly, it shows that these problems are not new.

A good identification and addressing system would make it easier to access credit, set insurance prices, register assets, manage taxes, verify drivers, protect customers, enforce contracts, and coordinate emergency responses. All these improvements would make the economy more secure and productive.

They would also strengthen Nigeria’s ability to gather capital. When people, businesses, and assets can be reliably identified and verified, the risks of lending and investment go down. Getting access to capital becomes less tied to personal connections, informal guarantees, or foreign funding. The need for foreign capital would not disappear, but our ability to gather, attract, and use capital effectively would improve.

Think about the National Collateral Registry set up by the Central Bank of Nigeria. It allows people and businesses to use movable assets, equipment, inventory, vehicles, farm products, and other property to secure loans, rather than being left out because they do not own land. The system already relies on unique identification, including BVN, for individual debtors.

That is an important piece of financial infrastructure. But a registry alone cannot create a working credit economy.

For movable asset lending to grow, lenders must trust who the borrower is, where that person can be found, if the asset exists, if ownership can be proven, if competing claims can be found, and if a legitimate claim can ultimately be enforced. These systems must work together.

The Central Bank recognized this gap years ago. Even with Nigeria’s existing national ID systems, the banking sector still lacked a unique identifier that could work across banks. This led to the introduction of the BVN while the national ID system was still being developed. The fact that the financial sector had to create its own ID system shows how disconnected our institutions are. More importantly, it shows that these problems are not new. What has held us back is our failure to make strong decisions, coordinate across institutions, integrate systems, and carry them out properly.

That is the difference between launching separate digital programs and building real digital public infrastructure.

Maybe there is even an irony here. Nigeria’s lessened dependence on consumer credit has saved us from some of the issues faced elsewhere. Just think about what would happen if Nigerians often used credit cards, while the systems for identity, credit checks, and enforcement remained incomplete. But can we keep failing while hoping for God’s grace to help us?

The deeper issue is that Nigeria is more digitally connected than digitally organized. We have gotten the apps and embraced the devices, but we have not built all the physical, institutional, and information infrastructure we need to get their full economic value. Yet Nigeria is not short of plans. The National Integrated Infrastructure Master Plan already exists. The more important question is whether it actually guides what we focus on and how we budget for public infrastructure.

Building the necessary infrastructure is only part of the challenge. Even when technology allows better organization, regulation decides if it lessens economic friction or just digitizes existing issues.

The recent fight over ride-hailing at Nigerian airports shows exactly that problem. I will look into it in Part Two of this series.