Microsoft has disclosed a new development to its staff, which could lead to the shutdown of its innovation centre, the African Development Centre (ADC), in Lagos, Nigeria, putting 200 jobs at risk.
An unofficial announcement was made on Monday, May 6 2024, with internal sources of Microsoft not denying or accepting the report when confronted. Affected staff would receive salaries till June 2024, including their HMOs.
This development centre is the only ADC branch in West Africa, with its second African branch in the east, Nairobi, Kenya. Both centres were Microsoft’s first development centres in Africa.
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Suspected reason for the close of ADC Lagos
With no official statement from Microsoft yet, industry experts suspect Nigeria’s economic situation could be responsible for this decision. In February 2024, inflation in Nigeria hit a 24-year high of 31.7%, plunging millions of people into poverty. The government has made changes to stabilise the economy, such as reworking foreign exchange policies and partially eliminating the petrol fiscal subsidy.
Although the currency devaluation in early February increased inflation, it helped alleviate shortages in foreign exchange liquidity. Despite a slight improvement in the medium term, economic growth still falls short of potential. Since imports became more costly due to the currency devaluation, with no substantial export to back it up, efforts to improve the naira and, consequently, the economy remain futile.
Innovation faces formidable obstacles in Nigeria’s present economic state. Living and business operational costs have risen due to high inflation and currency devaluation, making it harder for innovators and startups to get funding. Due to the economic uncertainty, there has been a loss of talent and investment, as well as a brain drain and capital flight.
Why Microsoft launched the ADC
With an eye towards capitalising on the continent’s booming ecosystem of tech talent, Microsoft established the Africa Development Centre (ADC). By bringing together engineers, developers, and innovators from across Africa, the ADC hoped to inspire new approaches to old problems, both at home and abroad.
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Microsoft hoped to foster digital transformation throughout Africa, create jobs for talented Africans, and build locally relevant solutions with global scalability through its investment in the ADC. Additionally, Microsoft hoped to help grow Africa’s tech industry by forming partnerships with local businesses, entrepreneurs, and governments.
In launching the ADC, Microsoft showcased its dedication to fostering digital inclusion in Africa and enabling innovation on the continent.
Despite Microsoft’s good intentions in Africa, undisclosed factors are leading to the closing of its Africa Development Center in Lagos. Experts can only make a wise guess to suspect the current instability in Nigeria’s economy to be the cause. If an official address from Microsoft is released, it would give clarity.