The near absence of Nigerian information and communications technology companies to compete effectively on the local market is of great concern to many. CHIMA AKWAJA in this write-up looks at the challenges of enabling indigenous companies to excel, what government should do to patronise them and other solutions to export their products and services abroad.
Nigeria loses N600 million annually to western nations for the use of foreign domain names such as dot com, dot orgs and dot biz instead of the use of dot ng, Nigeria’s own unique identifier on the internet which could be procured for less than N2,500 only. Inadequate local content culture in the information and communications Technology (ICT) sector has hampered the growth of Nigerian owned companies in the global ICT industry.
Few days ago, Minister of Communications Technology, Mrs Omobola Johnson lamented the dominance of multi-nationals in the ICT sector who control 70 per cent of the personal computer (PC) market share, 100 per cent of mobile phone market share and 78 per cent market share of mobile network operators, she said the local industry is highly fragmented with over 350 indigenous companies operating.
She said the situation has left Original Equipment Manufacturers (OEMs) and assemblers to just do wholesaling and retailing while mobile network operators (MNOs) who build their infrastructure, providing voice, data and value added services for mobile telecommunications services have crowded out the local Internet Service Providers (ISPs) and local value added service providers.
Local content initiative
This lack of competitiveness and support has led to the call for Nigeria Content Advocacy Initiative (NiCADI), a multi-sector vehicle for the domestication of Nigeria information technology (IT) products and services by key players and regulators in the industry. This will entrench the culture of building indigenous ICT companies that can compete on the global scale as well as positioning Nigeria for a piece of the electronic commerce market on the internet.
The aim of the initiative is also to ensure that indigenously owned ICT companies operating in the country put at 350 by the Ministry of Communications is encouraged to have a better share of the domestic market. The initiative which will see indigenous IT providers play major roles in Nigeria’s economy is a brainchild of Business and Technology News Publishers Foundation (BTPF) and is supported by Nigeria Information Technology Development Agency (Nitda), Nigeria Internet Registration Association (NiRA), Internet Exchange Point of Nigeria (IXPN), Institute of Software Practitioners of Nigeria, (Ispon) and indigenous computer manufacturers like Zinox, Omatek and Brian Systems.
According to Mr. Ken Ugbechie, chairman of BTPF at a meeting with Original Equipment Manufacturers (OEMs) said the foundation observed low patronage of indigenous technologies, services and human capital in the country. “This is an anomaly and if allowed to continue portends grave danger to the country.” He called the OEMs and software providers to come together under NiCADI to have a single voice.
Ugbechie who quoted from the March 8, 2013 Harvard Business Review, traced the history of Silicon Valley, USA companies such as Apple and Google as well as Indian companies like Tech Mahindra and many others who were strategically funded by tax payers money from USA and Indian governments respectively called for Nigerian government to actively participate in the growth of indigenous IT companies.
“There is still so much for government to do to encourage indigenous entrepreneurs, particularly the OEMs and the software providers. You are just few compared to the size of the country but I also know from history that it takes a few to make the desired change for the larger society. You are the innovators we see. You are the enablers of the economy and our foundation is prepared to give a strong voice to your innovative efforts,” he said.
Documentation of local content
Mr. Inye Kemanbonta, director of statistics and research, Nitda said NiCADi is coming at the right time as it will help Nitda who is working on a local content document for the IT industry with 60 per cent work already completed to learn and get inputs from the industry. He said there are huge markets out there with Nigeria’s huge population and the entire sub-Saharan Africa market for the OEMs and software makers.
“Government role in NiCADI is to create the market or expand the existing one. Let us think of how to create the demand, everyone has a role to play in pushing for Nigeria content.”? Nitda is fine-tuning draft standards and guidelines for made- in- Nigeria IT hardware products.
According to him, Nitda has set up National Technical Committee (NTC) on IT Standards to ensure that made-in-Nigeria IT products meet global standards and that Nigerians would have no more excuse not to patronize made-in Nigeria products in IT. The committee would consolidate the NITDA campaign for Nigerians to buy made-in-Nigeria products in IT and provide the enabling framework for the development of the indigenous IT sector.
Web content losses
Few weeks ago, Mrs Omobola Johnson, minister of communications technology, as guest at Lagos Social Media Week, informed the audience that out of 54,000 indigenous e-mail accounts created for government officials in the federal ministries, departments and agencies (MDAs), only four per cent of the e-mail accounts are in use. She called for the use of .ng for security of confidential mails. ?
At the end of 2012 registered domain names with NiRA stood at 26,000. Mr Ope Odunsa, chief operating officer, Nigeria Internet Registration Association (NiRA) said with more Nigerian domain names, money sent abroad for domain name registration would be deployed in other areas of the business. . “One thing that we are doing among several others to educate Nigerians is a campaign called Switch 2.ng,” he said.
Odunsa who lamented the capital flight occasioned by the use of dot com for websites operated from Nigeria said there is no need going for dot com which costs millions to register and renew every year. He said Nigerian companies, institutions and individuals can avail themselves of dot ng, the country’s unique identifier on the internet and create website for the promotion of
Nigeria local content. Nigeria according to him has a huge space with its size which it should use to populate the internet. ?
Odusan said “I see this as an opportunity for Nigeria to create content because if you create content in Nigeria and you want it to be identified with Nigeria; you host it in the .ng domain, and it makes it unique.” With a population of 160 million people,
Nigeria has less than thirty thousand domains, registered today. In 2011, it had about 12,000 to 14,000 domain names.
He added it has made a lot of organisations to switch to .com.ng or switching from a .com or any other foreign domain to .ng domain. We did the campaigns in Lagos and Abuja, we realised that even our government officials then were not even using .ng. A lot of our government officials use Yahoo and Hotmail as their e-mail. We did that campaign with Nitda and the ministry of Communication Technology to sensitise the government officials.
Capital flight? ?
Mr Yele Okeremi, chief executive officer, Precise Financial Systems Limited has said over dependence on foreign software is costing Nigeria about $50 billion yearly on importation of software used in the banking, telecommunications, oil and gas, manufacturing and public sectors. Wholesale acceptance of foreign software as superior to indigenous solutions in the economy has created an uneven ground for competition thus giving foreign software vendors an edge in the Nigerian market. ?
For the situation to change, there is need to look at the entire value system. “The ability to come up with a strong case for software is different from having a business case. We need to develop software entrepreneurs who will establish software companies or else if we develop software programmers, they will be snapped up by advanced nations once they are flashed green cards and better pay. Remember the yam pounder machine was developed in Ife, Osun State but Japan which doesn’t eat pounded yam snapped the inventor and commercialised the technology.”
Mrs Omobola Johnson said ICT local content remains grossly under developed in Nigeria and many reasons are adduced for it including the high cost of production and scarcity of expertise. “The fact remains that there is an over dependence on foreign importation of software and hardware and this has led to diminished opportunity for domestic economic empowerment and contributed to limited capacity building within the context of ICT.”
Threats to local ICT
The biggest threat to local ICT production and development is limited access to venture capital according to a new report by the UN Conference on Trade and Development (UNCTAD) which looked at how to spur local software industry. Other challenges are piracy, poor information and communications technology (ICT) infrastructure and inadequate protection of intellectual property rights which are hindering ICT software development and service expansion in developing regions such as Africa.
Aida Opoku-Mensah, director of the ICT and Science & Technology Division of the UN Economic Commission for Africa (UNECA), said that ICT software and services are dominated by the developed world but developing economies are catching up. “Software development is strategic for Africa’s development as it offers a lot of opportunities.”
She noted that “Adapting software to local contexts helps firms to manage resources better, obtain information more efficiently and set up cost-effective business operations,” she said. Software development in African nations also creates market opportunities for developers and boosts learning, innovation and job creation in those countries, she explained.
Partnerships for innovation
Recently, Nokia, Microsoft and Dalberg Global Development joined hands with FG to stimulate local content IT innovation to impact agriculture, job creation and the power sector in achieving Nigeria’s Vision 20:2020 goals. Microsoft Nigeria’s General Manager, Emmanuel Onyeje said “it is important to build our understanding and knowledge about the power of ICT’s, but only action will allow us to reach our dreams. We need to move from policies to actionable programs that benefit the people.”
Jussi Hinkkanen, Vice President for Corporate Relations at Nokia stated that “Reaching of Nigeria’s Vision 20:2020 objectives will require collaboration and alignment across stakeholders. Private sector is ready to contribute to this process as we have seen today. The identified solutions showed maturity and now we need to action on them”.
Robin Miller, Manager ICT at Dalberg said “Nigeria is one of the fastest growing economies in Africa with potential for global competitiveness. As such, we must look beyond the traditional solutions and recognise ICT innovation as a cornerstone of the country’s development,” she said.
To create enabling environment for local content for growing the ICT industry, Mrs Johnson, Minister of Communications Technology said in a presentation at the Nigerian Economic Summit (NES) meeting said her ministry while“Increasing the capacity utilisation of current assemblers will also create jobs through Buy Nigeria campaign.
She noted that a government guideline on procurement of assembled in Nigeria computers will soon be out adding that there is a Student PC ownership scheme (www.cosportal.com.ng) to drive volumes and improve capacity utilisation of local plants and improve PC penetration of students which will see 280,000 PCs in the first year procured from local manufacturers while one million will be procured in the second year with 12,000 PCs for supporting jobs.
To incentivise and promote opportunities in this market yielding good results, Johnson said card manufacture with embedding and personalisation plant is underway. In addition, the first phone assembly plant in the country by Mi-Phone is under construction. She added that digital set top boxes to support analog to digital transition is being planned to produce about 20 million set-top boxes.