There is no gainsaying the information and communication technology (ICT) sector in Nigeria is a capital-intensive, fast-paced and dynamic sector, in this piece Bukola Olanrewaju examined the pains and gains of the sector in the last administration, proffers solution.
Many IT experts have also recognized the sector as an enabler for developing other critical sectors including banking, agriculture and manufacturing.
But, a careful review of the sector in the last four years of President Muhammad Buhari, under the supervision of the Minister of Communication, Barr. Adebayo Shittu shows that the sector has experienced its most challenging phase as well as recorded a number of feats despite its heartrending challenges.
To this, Director-General, Lagos Chambers of Commerce and Industry (LCCI), Muda Yusuf disclosed that lack of viable economic plan, poor debt management, unfavourable foreign policy, among other issues were responsible for the economic owes and failures of President Buhari’s first term in office.
The co-founder of Cc-Hub, Bosun Tijani recently showed how deep the frustration with Shittu as minister has become.
He opined that “Building a base for science and technology for Africa shouldn’t be business as usual,” Tijani tweeted from his handle @bosuntijani. “It is probably the only way to guarantee any sort of future for the continent. This is why the DNA of the ecosystem matters. This is why it is disservice to appoint Shittu as Minister in 2019
On his part, the National Coordinator,WASPAN, Mr Chijioke Ezeh noted that the sector has truly grown.
According to him, the growth and success story so far can be accorded to the non relenting effort of the practitioners but the bulk of the investment has focused on foreign investors as opposed to unlocking local investment.
“The more one unlock and encourage local investors especially those going into new area of development like Fintech, Agritech, the more one have foreign investors because they are not all interested in MTN, Glo or other telcos. There are some foreign investors who are interested in micro business” he expressed.
Overview of the ICT sector
Prior to 2015, broadband was put at 8%. Although the penetration has moved from 10% in 2015 to 33% as at December 2018, sadly the quality of internet services is still a far cry.
This is because Shittu administration largely ignored fixed wireless by focussing on mobile wireless.
Despite recording increasing subscriptions to 3G and 4G while moving from 86.9 million internet users in 2015 to 114.7 million in April 2019, Internet speed has remained slow and Nigeria mobile Internet download speed was ranked 107th as of February 2019.
It is arguably that some of this achievements could be attributed to the determination and effort of the private sector.
Contribution to GDP
It was reported that in Q3 2015, GDP was at 9.19 per cent, falling to 8.99 per cent in Q3 2016; recorded 11.81 per cent in the Q2 of 2018, Shittu recently put it at 10% in Q1 2019.
Right of Way and Multiple taxation
The minister claimed that the sector has attracted increased Foreign Direct Investment (FDI) from $32 billion in 2015 to $40 billion in 2018.
Some would however argue that this was more of private sector doggedness than the self will actions of the Minister..
The challenges stifling the FDI and local investment inflows into the industry within this period include multiple taxes, multiple regulations and Right of Way problems.
As a result, this period witnessed the forceful shutting down of base stations For instance, the shutting down of base station by the Taraba State Government in January 2018, the Kogi State Government shut down leading to an outage of over 150 sites in November 2018 and also the arbitrary shutdown of MTN base transmitting facilities by the Kogi State Internal Revenue.
The Association of Telecommunication Companies of Nigeria (ATCON), Mr Olusola Teniola, mobile operators currently pay on the aggregate 23 different taxes to various agencies of government at the federal, state and local levels.
According to him “The challenges are also going to conspire against the six infrastructure companies already licensed by the NCC to deepen broadband penetration, because they won’t be insulated from the challenges facing existing operators in the industry,” he noted.
While,the chairman ALTON, Engr Gbenga Adebayo recently stated that the telecom sector shouldn’t be seen as a cash cow due to the exorbitant prices charged on RoW by most states seeking to increase the Internally Generated funds.
He also frowned at the intent of the Nigerian Civil Aviation Authority (NCAA) to demolish over 7000 masts early this year over Aviation Height Clearance (AHC) which he urged to be a one off payment.
On its part, NCC posited that the commission has tried to meet with the Governor’s forum on several occasions to address this issue but unfortunately the minister was unable to fix this.
# Local content, Executive Order and Policies
As a way to encourage and promote Local content, the Executive order 003 and 005 was signed in 2017 by the Vice President of Nigeria, Prof. Yemi Osinbajo and 2018 by President Muhammadu Buhari respectively.
As against this, FG partners a Chinese Digital Technology company, NetDragon Websoft Holdings Limited to establish digital education institute and provision of smart learning classrooms across the country. A project officially launched by the VP.
In the minister words, “My Ministry is totally committed to the implementation of the local content program and the Executive Order 005 on Local Content. Let me quickly add here that, Local Content does not mean excluding foreign participation in our economy, rather, it means concerted and collaborative efforts by all players to build a strong indigenous economy” he maintained.
But under the stewardship of Shittu, industry practitioners has continuously decried the non compliance to these orders despite efforts made by the agencies to promote local content.
Speaking on this in a recent chat with Nigerian NewsDirect, the Former President of ISPON (Institute of Software Practitioners of Nigeria) and the Director General of Delta State Innovation Hub, Dr. Chris Uwaje noted our IT Local Content mission may not be attained when 90 per cent of our ICT development requirements capabilities is outsourced to international interest and platforms – constituting digital generational dependently risks, fueling youth unemployment and grossly disenabling the digital revolution dreams, promises and benefits from reaching the over 60% of the underserved Nigerians.
Similarly, the President of Institute of Software Practitioners of Nigeria (ISPON) and the CEO, Precise Financial Systems Dr. Yele Okeremi spoke on the effectiveness of the Executive Order
“There is a lot of heavy lifting that happens to make Executive order effective. Executive Orders are meant to create opportunities but looking at our budget today what product do our Government buys?
“Yearly Government spends billion purchasing foreign software at the expense of the local market.
“If Government really want the Executive Order to be effective, they should have engage the industry players who will rightly inform them on specific areas of opportunities to grow” he pointed out.
More so, Ezeh stated that even with the Executive Order, the strategy for local content has been quite unclear, there hasn’t been a clearcut strategy about the government to engender local investments.
“But on the good side, Nigerians are thriving in that space of micro lending using ICT, driving digital inclusion, driving education by leveraging on technology, health initiative, agriculture initiative.
In the last four years, the bulk of the investment and progress has been mainly on the big ticket investment. Money meant for the development of local investments are locked down in treasury bills and fixed deposits. It is very unfortunate that even young people are also doing this as oppossed investing in a start up.
The regulator can be up and coming in changing the market perception on local investments.
Among Shittu administration’s few development was the plan to rebrand NIPOST. The plan was to create new business arms including NIPOST Banking and Insurance Company, NIPOST Property and development, NIPOST Transport Company, and NIPOST e-Government Services Company.
Although this plan has yet to see the light of day, customers’ testimonies proved that there are been some changes in its service delivery.
# Teledensity and active mobile subscribers
During the period under review, Nigeria’s teledensity also rose from 107.67 per cent in August 2015 to teledensity of 124.05 per cent as at end of February, 2019.
According to the data obtained from NCC, the active mobile subscribers leaked from 81,892,840 in January 2015 to 174,012,136 in January 2019 before reducing to 173,670,035 as at the end of February 2019.
Teledensity is calculated by the International Telecommunication Union (ITU) to mean active line distribution of one telephone to a hundred of a population within an area.
The Executive Vice-Chairman, NCC, Prof Umar Danbatta, recently said the growth in data subscribers was an indication of the increasing demand for reliable connectivity to drive socio-economic activities.
“Current efforts at infrastructure build-out may be improving the services of those already served but not reaching those who are still unserved or underserved. This is due to difficult terrain which makes it technically challenging and economically unfeasible to deploy the terrestrial infrastructure necessary to deploy 5G, such as fibre and microwave backhaul technologies in suburban, rural and hard to reach areas”, Danbatta pointed out.
Experts has unanimously argued that this sector will experience faster growth, be it at the forefront of IT innovations and development, if a technocrat is allowed to be at the helm of decision making, such as being made the minister.
To this, the President of Nigeria Computer Society (NCS), Prof Adesola Aderounmu has advised technocrats in Nigeria to partly get involved in politics.
“Until we have someone who understands this sector well at the realm of power before we can see our desired results faster”, he said.
Ezeh similarly noted that the regulator should come from within the industry, not from classrooms, politicians or retired government personnels.
Citing CBN as example, Ezeh says the sector has not gone out of the banking sector to provide CBN governor. The regulating bodies should be made up of professionals within the industry who can drive sector as expected.
Nonetheless, the potentials in this sector such as the statistics and growth in internet usage are indications of Nigeria readiness toward digital economy and the transition to ICT-driven system and processes.
Commenting on this, the former Minister of Communications Technology, Omobola Johnson noted that, the ICT space is dynamic, in that it is fast changing. Therefore, calls for a redirection of focus from the telecommunication to embracing digital revolution.
“We need to understand, it is no more about the telcos alone, being a digital economy is no longer a choice. We need another revolution, it’s about digital revolution; it’s about the whole economy in all ramification of sectors.
According to her, what the nation needs is not to build infrastructure for telecoms but digital infrastructure that will be reliable, affordable and ubiquitous. “The digital revolution we are talking about must deliver social and economic benefits,” she stressed at the maiden edition of Nigerian Telecom Leadership Summit.