Experts make case for control of Nigeria IT industry

Nigeria has practically no stake in global ICT industry unless it becomes a major ICT producer writes SEGUN ORUAME Deregulation of Nigeria's telecom market has brought in more than $10 billion in terms of offshore investment and 39 million active phone lines in eight years to make the country's market one of the most prosperous in the last decade. But the flipside is that there has been little growth in terms of human capacity development and strategic ownership of the industry raising concerns in the sector on the non-sustainability of the gains made in the last few years.

For many experts, having the biggest telecom market on the continent or one of the hottest on the globe in terms of return on investment (RoI) has not necessarily turned the country into a major ICT destination in the sense in which telecommunications has impacted on major destinations such as India and China in the last 15 years.

Both countries, particularly China, are major manufacturers of ICT components and not just consumers. China has demonstrated ability in the manufacture of high grade telecom hardware infrastructures through its major vendors such as Huawei and ZTE. India is a leader in the software component in telecom and has specifically set the tone for applications integrating telecom and banking services. One notable Indian software player with strong presence in Nigeria is Infosys. A ZTE factory set up by the Chinese to produce handsets locally has folded up after only opening shop for six months.

Such efforts could have helped to grow the capacity for
local manufacturing of handsets. The ICT industry is heavily depended
on importation. "Everything that drives the industry including
manpower is still imported. The software, the hardware and the people
are all imported," said Sunday Folayan, CEO of Ibadan based Internet
company Skannet.
Mr. Jide Awe, a Lagos based telecom consultant and CEO of Jidaw
System, an ICT training concern, thinks a lot of people in the sector
are usually carried away by the successes in the deployment of
services in the last few years considering Nigeria's story of moving
from under 500, 000 active phone lines to more than 39 million in only
eight years. For Awe, when you are seen as the biggest market with the
fastest growing teledensity, it is difficult to consider the
implication of being just the biggest consumer. A consumer nation is
no better than a dumping ground.
"More efforts should be invested in encouraging the development of IT
and telecoms expertise in Nigeria. Consumption alone cannot engender
growth. There is a need to develop human capacity in areas such as:
technical, management, research and development, security, strategic
and operational. For example, while there has been a cyber café boom,
management has been a major source of concern for cyber café
businesses," said Awe.
Nigeria runs the risk of repeating the same mistake it made with its
oil boom where the ownership, control and management of the industry
remained with foreigners despite having a history of more than four
decades of oil exploration, warns Tom Obaseki, another Lagos based
telecom consultant who also consults for some oil firms. "The country
failed to seize the initiative to create a deliberate policy framework
that would encourage the emergence of IT entrepreneurs who could
maintain have strategic ownership and management of the IT industry
when the ICT explosion first occurred long before the GSM operators
came," said Obaseki.
More than four years after the Department of Petroleum Resources (DPR)
licensed private indigenous refinery companies, only three of the nine
or so licensees have shown signs of setting up anything because the
capacity for ownership and management of the oil industry at the top
level has never been encouraged for indigenous hands, lamented
Obaseki adding, the country for over forty years had been contented
with having its indigenes running the last mile part of the business
as petrol station owners or "gas attendants and better still
contractors for the supply of bitumen."
While Nigeria has made significant progress in embracing ICTs through
deployment of infrastructure and usage, the necessary skilled human
resources to drive and sustain the growth chain are still lacking.
"Unstable power supply, high cost of bandwidth and other problems
associated with inadequate support infrastructure may have led to the
erasure of some ICT companies but a major challenge that is hardly
looked at is the issue of manpower. There has never been enough
manpower to grow and sustain the industry," said Lanre Ajayi, CEO of
Pinet Informatics. Ajayi, who is also the president of Nigeria
Internet Group (NIG), believes the country needs to work harder at
creating the required expertise that would generate services and
products and not just having people that would lower end of the
industry who can only act as traders of recharge cards.
A concerned Nigeria Communications Commission (NCC) had sought to
address this problem by establishing the Digital Bridge Institute
(DBI) over four years ago. The DBI was created as an interventionist
tool to create a pool of telecom experts that could drive the fast
expanding industry. Apart from providing basic and advanced skills to
Nigerians part of the DBI's vision is also to inspire entrepreneurship
in the ownership and management of ICT companies.
Institutions alone cannot do it, argued Gboyega Ojuri, CEO of Junisat,
a Lagos based Internet service provider with a West African spread.
Government need to have a proactive policy to encourage the emergence
of Nigerian ICT experts who have sufficient capacity to transform into
real ICT entrepreneurs, said Ojuri. "The so-called Nigerian ICT
entrepreneurs are no better than recharge card hawkers," said Dr
Makinde Fayemi, Lagos based software writer and system analyst adding,
"We run an economy where people who happened to be salesmen for
foreign companies struggling to bring in all sort of software and
hardware junks into the country are seen as IT experts and
entrepreneurs. Nobody is creating manufacturing anything at home. Not
even the software that drives the industry is made here."
The enabling environment must be put in place to create the required
confidence in the Nigerian ICT entrepreneurs, said Obaseki while
arguing that one of the fine points of Transcorp was that it was
created as a special purpose vehicle (SPV) to facilitate the emergence
of big time Nigerian entrepreneurs who could muster enough resources
to have control stake in companies with multinational status. As an
SPV, Transcorp has shares in several industries including banking,
hotel, telecommunications, oil and gas among others.
"The country needs to appreciate that it cannot be an active member of
the Knowledge Economy unless it has its own IT army who are functional
at the production level," said telecom expert and foremost commentator
on the country's IT space, Chris Uwaje. To him and many others, the
gains made in the telecom industry could be eroded over time except
practicable steps are taking to ensure that Nigerians could sustain
the industry at the level of ownership and management. " We only have
specific level of functional control where some Nigerians are tasked
with the daily routine of maintaining some of the sites or
infrastructures, the strategic knowledge to initiate and drive the
business id still lacking," said Obaseki. Of Nigeria's four active GSM
operators, only one is fully in the control of indigenous hands and
two are in the control of foreign hands. The fourth in the hands of
indigenes is only struggling to exist and it has always been in the
hands of the government. "We need to replicate the Globacom model
elsewhere in the industry and at a higher level," said Obaseki, adding
that way, we could begin to dream of having a stake in the ICT
industry the way India has a stake in the global ICT industry.

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