Nigerian CommunicationWeek

Local Content: FG Pushes for Local Production of SIM Cards, Others

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The federal government is worried that very little of the $18 billion Foreign Direct Investment (FDI) in the telecom sector over the years is retained in the country and has begun moves for  local content policy, guidelines and legislation.

The government has also set an implementation date of January 2013, by which time; it expects to commence local production of subscriber identity module, base station transreceiver station (BTS), debit, credit and other payment cards.

Already, the Ministry of Communications Technology and key players in the industry are in discussions with offshore companies that are interested in establishing local companies to manufacture devices. It is also discussing with the Ministries of Finance and Trade and Investment on the most appropriate import and tax regime as an incentive for local manufacture.

Mrs. Omobola Johnson, Minister of Communications Technology, said, “The larger proportion of these cards are imported and sometimes personalised outside this country. There are a number of local companies that have the capacity to not only produce cards but also personalise them. Direct interventions must be made to ensure that a significant share of this market is captured by firms operating in Nigeria with of course the necessary high security assurances in place.”

She said that there was very high possibility that with the roll out of the cashless economy spearheaded by the Central Bank of Nigeria and the banking industry, the national and state identity management schemes and other card based services and the growing telecoms industry come 2015 or thereabouts, Nigeria could have close to 500 million chip cards in circulation.

The ICT industry contributed 5.6 per cent to gross domestic product (GDP) in 2011.

The industry has grown at an average of 30 per cent a year for the last two years making it one of the fastest growing sectors in the Nigerian economy.

Most of this growth comes from telecoms which have recorded over 90 million subscribers from about 400,000 in 10 years.

According to her, “The local content agenda that we are developing in the MCT and will soon operationalise is not so much a protectionist agenda but one that places priority on the development of our local industries by levelling the playing field or better still making it more advantageous for companies in Nigeria to do business with other companies in Nigeria.”

She noted that there were some unfortunate anomalies in the ICT industry. “It is cheaper to import a base station than to fabricate one in Nigeria. It is cheaper to import a chip card than to make and personalise them here. It is cheaper and many times more expedient to bring in a skilled resource from any part of the world than to invest in the training and capacity building of Nigerians.”

She stated that in a country with an addressable market of over 100 million in the ICT industry, only a miniscule percentage of devices that were used to access voice or data ICT infrastructure is made or assembled in Nigeria.

It is clear that liberalisation and private sector participation would not guarantee domestic value creation especially in industries where domestic value added was not significant in the first place,” the minister said.

She added that there was need for a deliberate focus, emphasis and approach to ensure that this happened as has been demonstrated by the local oil and gas industry. “In the recent past we have seen many examples of countries that are creating local jobs by stimulating local economies through increasing domestic productivity,” she added.

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