Foreign investment into Nigeria’s telecommunications sector has hit about $12 billion and this is a strong indication that Information and Communications Technology (ICT) is the most vibrant in the country’s economy in spite various challenges.

This is not only because of the growth it has recorded but as a multi functional sector; it drives every other sectors of the economy.

Mr. John Odey, minister of information and communications at an ICT forum recently said that the inflow was made possible by the liberalization of the telecom sector and the introduction of Global System for Mobile communications (GSM).

Odey added that new generation technologies in the ICT sector have made it possible to provide new solutions for the consolidation of the banks and other financial institutions as well as the provision of increased turnover for advertising and marking organizations through e-banking and e-commerce services.

More so, the industry have contributed immensely in providing means of livelihood to greater percentage of Nigerians, who are gainfully employed in the distribution chain of telecommunications product as well as four computer assembly plants that have employed people.

Advertisement

Against this backdrop as well as in an attempt to save the country foreign exchange earning that Association Telecommunications Companies of Nigeria (Atcon) organised a stakeholder’s summit on Nigerian content development in the Information and Communications Technology (ICT).

Local content development also refers to as import substitution is when some of the intermediate components that go into the manufacture of a product are indigenously produced using local resources and technology.

For instance, most casings of laptop computers and mobile phones are made from the by-product of petrochemical refineries. Nigeria is a major crude oil producing and “refining” country, yet these components are still imported.

If the downstream sector of the petroleum industry is developed, and they are able to produce casing and other similar component, Nigeria no longer imports casing for Laptops and mobile phones it an application of local content.

However, participants at the summit, expressed displeasure over high foreign content in the industry, an over view of the different sectors of the industry, they said show that in the hardware sector, the four computer assembly companies are expose to undue competition with foreign brands that have low production cost.
In the telecom space, they decried high patronage by telecommunications companies of foreign equipment that can be produced locally, these includes billing software, cyber cables, mast, connectors, switches as well as equipment rack.
The same story goes for software where in spite of abundant prowess in the sector and strives made in various areas of software development in the country; the sector is yet to enjoy enough patronage.

Advertisement

Mrs. Grace Ekpiwhre, minister of Science and Technology said at the summit that the important roles of ICT in the globalization process and the emerging digital economy, has left Nigeria with no option than to be part of the revolution. She lamented the scenario in the industry where in spite of the growth recorded the country has remained predominately, consumer of ICT goods and services left much to be desire. She expressed determination of her ministry to enforce the existing policy which requires Federal public service to patronise locally developed software.
Obstacles

Nigerian psyche has been steeped in the notion that foreign products are preferable even when there alternative high quality and cheaper local products. Even the government officials for some selfish or pecuniary reason also think this way.
Businesses thrive when products and services are produced and finished products marketed profitably. This ensures stock movement, as more goods will be produced and hence healthy return on investment. When the volume of sales is large, then more profit could be made, and some of it ploughed back to research. The product of research into indigenous content, affects content development. Thus any factor that limits the production and profitable marketing of finished goods will impact on local content development not only in ICT industry but also in other industries.
The reversal of some policies of the previous administration and lack of will power to enforce policy is a major obstacle to content development in ICT.
The decay in the infrastructure in the country is mind bugling. We have to sink our own borehole, generate our own power, bear the brunt of impassable roads with the attendant accelerated wear and tear to vehicles, provide our own security, etc. The list is enormous. Under such conditions local products cannot compete in pricing with products from countries where infrastructure is better.
Local content is not all about equipments human resources is another area of local content, this requires ICT companies to employ greater number of Nigeria in their work force. Unfortunately, trained manpower is not readily available in the industry.
Mr. Lanre Ajayi, president, Nigeria Internet Group, acknowledged that there is acute shortage of trained human resources in ICT industry. According to him, any policy that requires a company to use local human resource such should ensure that enough trained human capacity is available in the country. He cited instance of the current situation in telecom industry where GSM operators are experiencing network problem as a result of lack of trained technicians to handle network maintenance and installation of capacity upgrade equipments.
Most financial institutions in Nigeria encourage trade financing instead of investing in the productive sector of the economy hence they tend toward financing LPOs. Manufacturing industries have long gestation period and thus require long term financing which is rarely available, this imposes enormous constraint on local content manufacturers especially in hardware space of the ICT industry.
Mrs. Florence Seriki, managing director, Omatek Computers, explained that local computer assemblers are faced with problem of dumping of foreign computers which makes them cheaper compared to locally assembled ones. She noted that three quarter of Hewlett Packard computers are sold in West Africa.
Mr. Leo Stan Ekeh, chairman, Zinox Technologies, said that Nigeria is a largely a government driven economy, and that any hiccup in government affects the ICT industry. He cited the long tussle between executive and National Assembly over the signing into law of the 2008 budget, which affected almost every facets of the country’s economy.
Nigeria he said is not an investor friendly country and that what is prodding some investors is the faith that things may get better; that generation unborn will be spared the anomaly that we have experienced; and to make a difference in this generation.
Business practices in global markets are changing because of international competition and Nigeria has to key into it or risk remaining in the dark waters of development. The Nigerian private sector, which consists of small, medium, and micro-sized enterprises and the informal sector, is widely regarded as a potential engine of growth in the information economy. Government favourable policies will provide opportunities for competent ones to increase their markets and trading potential well beyond the Nigerian borders. This will in turn provide capital that will aid research into indigenous inputs and content development.
In telecom companies, the billing software that operators are using, cyber cables, copper wires, switches for telephone network, racks, towers, mast connectors, and cable that can be developed locally, presently, are imported. About 90 per cent of the inclusions in a tower are imported which can be manufacture in the country.
Dr. Emmanuel Ekuwem, president, Atcon, said application of local content will create jobs, and wealth. He said, though local capacity may not meet international standard as most people have argued especially in developing software for banking application, it requires patronage. “If local products are not patronized, they wouldn’t grow,” he said. He said quality comes out of growing process. He described the mentality of believing that foreign made products are of higher quality as ‘kolomentality’. He urged companies that patronize locally developed content that did not meet the required standard to give feedback for improvement rather than confrontation, insulting and challenge base, which does not allow for improvement. He added that Nigerians have a duty to protect their own country, as no foreign national will love the country more than his own country.
Way forward
The ICT industry is unique in that as we are in the Information Age with attendant dependence on the Internet for most transactions. Information Societies are emerging changing the ways business is conducted. Under this present scenario, the use of ICT product is pervasive affecting all sectors of a country. Anything that affects the ICT industry affects the entire human society. Any business that refuses to adapt becomes history. The manufacturers and producers of this business and productivity tool (ICT tool) need to be encouraged to make these tools available to the vast majority of the populace at affordable rate in order to empower the new e-work force. For Millennium Development Goal to be achieved, as many citizens as possible need to be empowered to function optimally in the new Information Society, if Nigeria is to achieve her desire of being among the top 20 economies in the world by the year 2020. This could only be done by giving entrepreneur opportunities through application of local content.
To this end, an effective policy framework is required as well as enforcement which stakeholders should assist in enforcing. Dr. Ekuwem called on Nigerian Communications Commission (NCC) and National Information Technology Development Agency (Nitda) to ensure that policies are formulated to encourage operators in the industry to use locally made equipment in the sector. This was corroborated by Prof. Cleopas Angaye, director general, Nitda who emphasized that policy is a framework will allow for ‘free enterprise’ and free spirit to operate as against regulation of technology that can only be restrictive.
“Only services should be regulated, and even then it should be mainly to protect third party rights and safeguard life and property.
The role of government should be restricted to providing framework, standards, and guidelines for development and deployment of technology,” he said. The implementation of policies according to him is a collaborative enterprise and collective responsibility. NITDA and other policy formulation bodies need the active support of stakeholders to implement the various policies. He added that such policy could as well as ensures that greater percentage of people occupying positions of authority in telecommunications companies that can make decision on local content should be Nigerians