Mr. Ogungboye Muyiwa, managing director and chief executive officer, eStream Networks has called for the establishment of a Telecommunication Infrastructural (Development) Bank to offer players special facilities to deepen service expansions.
Mr. Muyiwa is not alone, as Mr. Olusola Teniola, president, Association of Telecommunication Companies of Nigeria (ATCON), has thrown weight behind the call, saying that the industry has attained special status following the increasing relevance of ICT in everyday lives.
Speaking to Nigeria CommunicationsWeek in Lagos, Mr. Muyiwa said that if approved, the Infrastructural development bank should be able to cater for the loan facilities for the industry’s which are not realizable under the present commercial banks’ interest rates.
“Part of my advocacy is what I call Telecoms Infrastructural Bank (TIB), where locals can access loans at single digit; not expensive digits. There will be certain criteria to access the fund. We will be glad to meet the terms and conditions, but a situation where a commercial bank is charging 30% and foreign companies are coming with funds at 2-3% from their countries of origin, of course they will gain the whole market.
“It is very tasking to compete with these people and Government is making it more difficult by not listening to us. They cite the market being deregulated as excuse, but forgetting that in every economy you must protect ‘your-own’”, he told Nigeria CommunicationsWeek.
Nodding in agreement, Teniola, ATCON president, said, “The National Bureau of Statistics (NBS) reports, the ICT industry contributes 9% to the nation’s GDP. It’s on the lips of everyone that our lives now depend on ICT. It is now very rare for one to leave the house without your phones.
“The fact that ICT is such a critical part of the economy you would thought it needs a bank to integrate and sustain it. There have been calls in the past for an ICT Bank to be created. We must understand that the period we are is infrastructure development based which is capital intensive by its nature and needs longer tenure. Unfortunately, the facilities given by the commercial banks in Nigeria are short term. Anything from 0-3years is not enough for the industry.
“So, there is a mismatch between funds required to deploy infrastructure and funds available. That is why telecom players will continue to go for dollar based facility because they are buying things in dollars and requires better facility not available in Nigeria. So, you would have thought we should fix that and the ICT Bank is one approach to addressing the issue”.
Speaking further, Mr. Teniola lamented the disparities in the forex market, which has thrown some players into confusion on the path to follow.
According to him, “The CBN’s position on the 41 items hasn’t changed. The pronouncement made about two years ago is still in effect. As far as the 41 items are concerned, you cannot access CBN’s forex mechanism. It doesn’t mean you can’t get dollars, but it pushes you to the parallel market.
“However, the CBN has intervened over the last three months by injecting quantum of dollars into the wholesale market, which has caused the interbank rating to lessen, which is a window and there is a PTA rate that also is there, which is about N360/$, Banks at N315/$ and the CBN N301/$, the BDC are there and the parallel market. So, what is happening is that through the CBN force, which is the most powerful supplier in the market, they dictated where the parallel market has gone.
The supply of dollar has caused appreciation of Naira. Inadvertently, the pronouncement by the CBN after the NCC EVC’s intervention on the Etisalat issue, there was a window for those who filled the form-M where able to access dollar at PTA rate of N360/$. That is still the case.
“But, we can’t say it is ok for the industry. Reason: it was also with caveat that, if it was not honoured, then you need to re-involve the NCC because the item is still on the 41-items list. Therefore, the industry is not clear on the forex window, operating in uncertainties. We don’t know the rate we are allowed to purchase the forex”.