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Nigeria, Others Spend $400m on Local Traffic Annually—Rudman

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Mohammed Rudman, managing director, Internet Exchange Point of Nigeria is a multitalented IT expert who has contributed immensely to the development of the industry in Nigeria. He has worked with Galaxy Information Technology Telecommunications (GTT) now Galaxy Backbone. He also pioneered Jigawa state government rural telephony project, Personal Handy phone System (PHS) before he joined IXPN. 

Internet Exchange Point of Nigeria

Internet Exchange of Nigeria is actually a spot where more than two Internet Service Providers do interconnect. Here, what we do is interconnect our service providers so that they can exchange local Internet traffic locally. What I mean by local Internet traffic is all local files or contents that are hosted in Nigeria locally. All over the world, there are lots of ISPs. The history of Internet Exchange of Nigeria actually began when ex-president Obasanjo visited Tunisia during the World Summit on Information Society; the Internet governance forum recommended that for the next 1 billion people to get connected to the Internet, an exchange point must be built across all the developing countries so that local content can be developed. When he came back, he gave the mandate to the minister of communications and then the Nigerian Communications Commission (NCC) gave us the initial funding to start the Internet Exchange Point of Nigeria. Without an exchange point, it means that all our local traffic would wander before coming home. For example, in the case of Joint Admission and Matriculation Board, University Matriculation Examination candidates in Lagos browsing the board’s website to register, their traffic would go round the world only to come back to Lagos and that does not make sense. Another example is when you have two communities between the border of Cotonou and Lagos and both of them are just living 10km apart, if anyone there wants to make a phone call, it would assume the status of an international call. Why is it an international call? It is because that traffic is not restricted to the Nigerian space. It goes from Nigeria and most likely to British Telecoms; from there it goes to France Telecoms and then to Cotonou because there is no direct relationship between those service providers like GSM operators and that is why GSM international calls were very expensive but when those GSM operators understand the benefit of agreement among them, they would then have a Memorandum of Understanding between themselves and Cotonou. That implies that whenever you make calls from Nigeria to Cotonou, it goes directly there and turns out to be cheaper and that is why you can see that international call rates are dropping. In data terms, that is not what is happening as it still goes round the world before coming back. That is why most Nigerian contents are hoisted abroad because it does not make business sense for them to be hoisted here as they would still be routed round the world before coming back. But with the Exchange point now, it makes more business sense for you to hoist that content in Nigeria; it means that the traffic would not need to go round the world. That is about the Exchange Point and its impact on the country’s super highway.

ISPs and IXPN

We have about 16 Internet Service Providers connected to the exchange; some of them are PTOs like Starcomms, which is connected too. Almost all the bigger players in Lagos are connected and we are waiting now for one of the GSM operators to get connected and they have indicated interest strongly. On the total, we have about 16 that are exchanging traffic and most of them are among the biggest players in Lagos.

Interconnect Voice

We do not interconnect voice; there are other companies that are licenced to do that – interconnect-clearing houses which connect all GSM operators. What we basically do is data connection but as long as you are connecting via Internet Protocol, you can even exchange voice as long as it is VoIP. But that is not our focus; we are really into promoting local content development in Nigeria and ensuring that there are seamless e-transactions in banks. We want to promote all those things using data, which happens to be our area of competence.

Benefit to ISPs

Linkserve and Direct-on-PC are actually Satellite link providers and the truth of the matter is, for some of them, there might not be a direct benefit because they sell Vsat across the place, they sell from the U.S because there hubs are not located in Nigeria. That means they connect in the U.S and sell here. So, there are actually no direct benefits unless for those who sell wireless links – they have a Vsat here and then sell the bandwidth as an ISP using different technologies, to the customers. The reason why I told you it is not beneficial for the Nigerian ISPs is because we do not have a Vsat in Nigeria and if you want to browse a Nigerian site, that Vsat most likely is connected to a hub in the U.S.

400 million dollars are spent on local traffic in Africa alone every year. That is why some African countries have exchange points: South Africa, Egypt, Ghana; all have it. If you take a little part of that money and channel it into developing other areas of economy it is going to be beneficial as it is obtainable in western countries. We can achieve what they have achieved. Most of the ISPs in Nigeria only buy and sell while those abroad have value added services. For data, they provide web hosting, video conferencing, VoIP – these are value added services that go with the Internet but in Nigeria they buy and sell, that is all. People are now reaping benefits from companies like Google, Yahoo that offer free e-mails, which are hosted in the U.S and no matter what you do the traffic will go through there. That is why we are trying to promote local content development in Nigeria so that we can have good programmers and hosting facilities that would stimulate change for the better and the market would start drifting from mere service provision to content provision.

Today, the reason why Internet is expensive is because you have to get connected to the hubs in the U.S and that is tasking. But if they are located here, you do not have to pay anybody and that would eventually drive down the price. The Chinese have their own local content; in China they do not need to go to the U.S that much as they have their own exchange point. They are there and exchanging in tens of gigabytes per second. That is what we are trying to promote in Nigeria – we should understand the concepts of cooperation and competition. We need to cooperate as people so that we can move forward.

The Internet is no respecter of border integrity; if you do not control your traffic locally, it would have to go through other places before coming back to you. So, it is better for us to exchange local traffic than to allow international providers make money off us. That unfortunately, is what is happening today. You can see the proximity between UBA and Sterling Bank buildings, but traffic from Sterling Bank to UBA goes through multiple hubs as much as 16 equipment and that is not right. But I would like to think that things have started changing and that implies that when UBA and Sterling Bank are connected, the traffic between them would go directly. Nigerian Internet Registration Association (Nira) had to register the .ng domain – formerly they were hosted in Ibadan and before they got connected to the exchange point, it goes round the world just for it to get to Ibadan. But later on, they got connected from Ibadan and now their traffic goes through 6 locations instead of the 20 locations that it used to be. You can see it is quite significant and the reason why it is 6 locations is because it is in Ibadan; if it were in Lagos, it might have been reduced to about 2 or 3 locations.

Connection to the Exchange Point

All our service providers are supposed to get connected including those using Vsat. Even Linkserve is connected because they are among stakeholders in the industry and as business trends change, people also change. We still encourage Vsat operators to get connected – as you know, it is good for remote areas – we do not make exemptions.

Exchange and 3G Technology

Yes. As long as you are browsing and using IP, you have the benefit of being connected to the exchange point and especially those GSM operators that are providing 3G; if they get connected to the exchange point, it means that all their subscribers that are browsing using their handsets, browse local contents and the traffic would be local and does not have to be routed round the world before reaching targets. The data goes directly from the handset to the mobile operator and from there, the ISP that is hosting those contents in Nigeria. So, it gives them a lot of advantage more than being directly connected to the Internet switch.

Wimax Technology

You see, in spite of any equipment you have access to, as long as you are browsing on the Internet, you are using IP and as long as you are using IP, it is necessary for you to get connected to the exchange point. As long as you are connected to the Internet, you have an IP address because you browse not with your telephone number but with that IP address that an ISP provided for you. IP contains a lot of things: Voice, data, video, etc.

Exchange Capacity

Well, anybody that connects to the Exchange point gets a minimum of 100mbps port. You can also connect at Gigabyte – that is 1000mega byte per second, which is large. None of these ISPs have the capacity for international practice – none of them uses up to 100meg for their international cycling. But we are giving them that for local traffic, though for some of them, the traffic might be 1Meg but as the traffic builds up; as local content builds up and as we promote the .ng as our national pride and start hosting sites for .ng locally in Nigeria, the content would really grow and what we are charging them is really minimal compared to international prices; it is about less than 1% if they were to pay for international traffic. We have excess capacity and it would take a lot to weigh it down.

Regulating Internet Service Delivery

NCC cannot monitor anyone and find out which customer is getting the right service. I think it is left for the users to complain to NCC so that they can address it. There are Consumer Parliaments where NCC meets with the consumers every month and iron out issues with them. In most parts of the world, they have gateways – platforms that are used to connect to the Internet. But in Nigeria, we barely have such. We do not know what is coming in or going out of the country and that is why so many scam mails are moving all over and people are saying they are from Nigeria. How did they know they are from here? Most of the ISPs in Nigeria actually borrow their addresses from other Internet service providers in the world. That is why connecting to the Exchange point is very necessary and we always encourage people to always have their own IP address so that we can trace and Government can now intervene and trace all scam mails and ensure good quality of service. But without the Exchange point; without the national gateway, you cannot really monitor anything because everybody is totally independent.


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Nigeria Economy – A New Quarter but Same Old Story

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By Lukman Otunuga, Senior Research Analyst at FXTM,

Africa’s largest economy entered the new quarter with a strong likelihood of following the same old story, namely COVID-19 headwinds, recessionary trends and widespread local and global market uncertainty.

What are the chances of a plot twist?

In a year full of twists and turns, the Central Bank of Nigeria (CBN) surprised investors with a 100 basis point interest rate cut from 12.5 percent to 11.5 percent. The monetary policy signal is a green light for more affordable lending which could stimulate economic growth and temper recessionary pressures. However, the same green light could speed up the inflationary pressures which weigh on the economy.

The currency markets may view the CBN’s rate cut as a sign that monetary policy no longer prioritises foreign investors seeking high returns on deposits.

Until now, the CBN’s hawkish monetary policy helped to maintain and grow the banking system’s foreign currency reserves, providing the Naira with a cushion against further weakness. The current weakening global and domestic economic outlook does not support a high-interest rate environment in the short term. Faced with a protracted recession or runaway inflation, the CBN appears to have chosen the lesser of two evils. The central bank’s latest statement indicates that high interest rates have not been successful in checking inflation, which the CBN blames on structural factors like rising fuel and electricity prices.

This raises the question of why an Oil-producing country faces inflation in fuel and electricity prices when fossil fuels are locally produced and ought to be more affordable. The answer is the strange economic distortion created by COVID-19. In this case, Nigeria applied to borrow $3.4 Billion from the IMF in order to bail out the economy because of the COVID-19 pandemic. The money will have to be repaid – cue a hike in electricity tariffs to increase government revenues from utilities and bolster its repayment capacity. This would be credit-positive as the last thing Nigeria needs in such extraordinary times are doubts over its creditworthiness.

Weaker global Oil prices make Nigeria’s creditworthiness even more of an important factor because the state is hard-pressed to cover its budgetary needs in the current climate of low demand for crude Oil.

Now that the CBN has put checking inflation lower down in its priorities, does this signal further rate cuts in the near future?

The case for further pandemic-driven rate cuts appears to be strong. The COVID-19 outbreak shows no signs of abating. On the contrary, at the time of writing, the number of new cases in Nigeria is on the rise after lockdowns eased. Further monetary stimulus to the economy appears unavoidable.

Of course, it all depends on what happens with inflation. If the inflation rate keeps rising in sectors like fuel, electricity and food it may drag on consumer spending, outstripping the economic benefits of lower interest rates. Medical costs have also risen because of COVID-19, according to the August inflation statistics.

The pandemic comes at a time when Nigeria is exposed to external and domestic risks. Locally, the drive to diversify the economy stayed stuck in first gear. Border clashes between herders and farmers led to border closures, further dampening economic activity. Externally, Oil prices remain in a slump, the US Dollar is appreciating and global sentiment struggles with the COVID-19 circumstances.

Further elevating fears over a technical recession in Nigeria, the World Bank forecasts an economic contraction of 3.2 percent for the full-year 2020, a five percent drop from its previous projection.

Summing up, Nigeria’s outlook remains influenced by the same old themes. If Oil prices stay depressed, foreign currency reserves and government revenues will likely decline. Low Oil prices also impact the CBN’s capacity to defend the Naira. A falling Naira could accelerate inflation and further weigh on economic growth. Will the final quarter of 2020 see a continuation of these themes, or will the economy offer a positive surprise?

The banking sector remains a bright spot in the cloudy outlook. Easier borrowing terms might boost the banking sector’s income while encouraging economic activity. Another bright spot is that growth in China has returned, promising to hike demand in the Oil markets and further supporting Oil prices.

After the year we’ve had so far, one thing’s sure: surprises are only to be expected.


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FG Mulls Renewable Energy for Improved Power Supply

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Dr. Ogbonnaya Onu, minister of Science and Technology, has said that the federal government plans to diversify the country’s energy supply sources to include renewable energy towards accelerating socio-economic development.

FG Mulls Renewable Energy for Improved Power Supply

Dr Ogbonnaya Onu, minister of Science and Technology

Onu stated this when he declared open the forum on ‘Scaling-up interconnected mini-grids development in Nigeria’, ‎organised by the United Nations Development Programme (UNDP-GEF) and the Energy Commission of Nigeria, in Abuja.

He said that renewable energy will help the nation meet its electricity needs in a functional and sustainable manner, adding that it will also improve the quality of life in the country.

‎“Nigeria is endowed with substantial energy resources such as coal, crude oil and natural gas; renewables such as hydro, wind, solar, geothermal, waves and tides, as well as biomass.

‎‎“The challenge before us, has always been on how to efficiently transform these resources into adequate and reliable energy for national development using our enormous capacity in science, technology, innovation and entrepreneurship”, he said.

The minister explained that since the inception of the present administration in 2015, electronic power generation capacity had increased at an annual rate of about 390 megawatts per year.

He, however, said that while this is commendable, it could not adequately meet the needs of the country’s population and sustain the desired level of economic development.

Onu further observed that Nigeria’s desire to industrialise cannot be realised without adequate power supply.

He stressed that every effort must be made to ensure that homes, offices, factories, schools, hospitals and laboratories in the country have adequate, reliable and affordable electricity supply.

“Renewable energy could meet Nigeria’s energy needs in the area of job creation and improved standard of living in rural areas,” he said.

He added that the development of solar photo-voltaic (Pv) in the country triggered by increase in demand for rural water supply, lighting, health services and micro-enterprise needs to be regulated to stimulate private sector participation.


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ROAM Africa Reports Over 2,400 Candidates Applying for One Role as Jobs Stiffens

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ROAM Africa (Ringier One Africa Media), the leading digital classifieds group in Sub-Saharan Africa, has released figures that highlight the current state of the jobs market in Africa, with one standard role attracting 2,417 applications.

Analysing 69,511 jobs listings from January 2019 to August 2020 across 5 African countries (Nigeria, Ghana, Kenya, Tanzania and Uganda), ROAM Africa’s data sheds more light on the challenges facing both job seekers and employers in the African jobs market.

The standard job listing that attracted 2,417 applications was for a Receptionist/Admin Assistant in Kenya while another listing for call centre agents and team leaders attracted 2,283 applicants.

Similar is observed also for other markets: In Ghana, 2,299 people applied for an Administrative Assistant role and 2,265 people in Tanzania applied for a Sales Representative role.

In Nigeria, the highest number of applications for a single role was 2,095 and it was for a Sales Representative role.

According to ROAM Africa’s data, Kenya contributed the highest amount of new job listings in 2019 with 33%. Nigeria was in second place with 31% and Uganda was in third place with 17%. However, so far in 2020, Nigeria is leading the way with 40% of new job listings, with Kenya in second place with 28% and Uganda in third place with 13%.

A closer look at ROAM Africa’s data reveals that, apart from Nigeria, there was a drop in overall job listings across all job levels during the last months.

However, there was an increase in graduate trainee and ‘no experience’ roles in Nigeria, Tanzania and Ghana from May to July 2020, which offers some hope for new entrants into the jobs market.

Interestingly, recruitment agencies contributed the most roles, with 16% of overall jobs, closely followed by IT and Telecoms with 15% and Advertising media and communications with 12%.

Some candidates have also reported applying for more than 20 jobs a day for multiple months and only getting to the interview stage on a handful of occasions. This is why ROAM Africa’s jobs platforms Jobberman (Ghana and Nigeria) and BrighterMonday (Kenya, Uganda and Tanzania) are focused on matching technology.

The company’s technology helps employers to identify and score the right candidates faster. Suitable candidates are made visible to prospective employers, and helped across the finish line by providing data driven career development tools and training programmes.

Job seekers using the platforms can expect to improve their CV, gain interview tips and sign-up for online training courses designed to bridge the gap between education and employment.

Commenting on the data, Clemens Weitz, CEO of ROAM Africa said, “The high ratio of applications per job listing really highlights how challenging the jobs market is for employers and job seekers.  Both employers and job seekers are struggling to connect with the right opportunities and more needs to be done to address this.

“Employers must rethink their hiring strategies and clearly define what they are looking for, based on data and insights. Job seekers must also invest in personal development that will make it easier for them to stand out in such a crowded and competitive market.”

Weitz also added that, “We believe that Africa’s greatest asset is its people and their entrepreneurial spirit. With the expected growth in the continent’s population, we must begin to put structures in place that will make it easier for African businesses to make the most of this resource.”

According to Hilda Kragha, Managing Director of ROAM Africa’s Jobs platforms, “With the current state of the jobs market, Africans cannot afford to continue with the antiquated recruitment processes that are commonplace in many organisations.

We must prioritise a digital approach to recruitment, which brings transparency to Africa’s labour market while connecting people to work opportunities that will improve their livelihood.

We must also embrace objectivity in the recruitment process by incorporating innovation that makes it easier to fairly and consistently sort for the best candidates. This will ensure that only qualified candidates are applying for roles and employers get an accurate picture of jobseekers’ capabilities. A win-win for both job seekers and employers.”

“Our data highlights both the challenge and opportunity that come with the African jobs market. We must address the challenge of rampant unemployment but also embrace the opportunity to transform how recruitment is done. By doing this, we will not only be addressing the current problems but also future-proofing our businesses and organizations for generations to come.”


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