Positioning communication sector as Nigeria’s highest revenue earner

Crude oil is Nigeria’s albatross. Although its exploitation has positively impacted on the nation, the poor management of earnings from crude oil over the years has stunted the development of the country. That is why the regress in crude oil price precipitated a recess in the nation’s economy with telling effects on the people.

Consequently, the government has been considering ways of diversifying the economy to position the country for perpetual prosperity. The Federal Government has been looking in the direction of solid minerals and agriculture to accomplish this. While there is no doubt that these two sectors are important in the effort to diversify the economy, it is important to underscore the point that the world is fast moving into knowledge and innovation-based age driven by Information and Communication Technology (ICT). Therefore, relying on mining and farming to diversify a 21st century economy will only make the country a laggard in the global community. It is, therefore, critical that while mining and agriculture are not neglected, more emphasis should be placed on unleashing the vast opportunities in ICT to buoy the economy and create employment opportunities for the nation’s teeming youth.

The statistics speak for themselves. According to the National Bureau of Statistics, the telecommunications sector boosted the Gross Domestic Product (GDP) by N1.58 trillion in the second quarter of 2016. This represents 9.8 per cent of the GDP. The sector was able to contribute this much because between August 2015 and August 2016, the number of subscribers in the telecoms sector grew by 5.9 per cent from 148.7 million to 152.28 million. Similarly, in the period under review, increase in teledensity shot up to 109.14 per cent from 107.67 per cent the previous year. Consequently, Foreign Direct Investment (FDI) in the sector climbed up from $32billion in 2015 to $38billion in 2016. This has made Nigeria the country with the second largest telecom sector on the continent after South Africa.

However, in spite of the potentialities of the sector and the huge revenue that has accrued to the country therefrom, Nigeria is nowhere near maximizing the opportunities therein.

According to reports, Nigeria loses about $2billion yearly to importation of ICT hardware and services because foreign brands dominate the sector. Major multinational ICT hardware manufacturers such as Samsung, Acer, HP, Dell, Asus, Toshiba and Lenovo are said to account for 70 per cent of sales in the sector. The balance of 30 per cent is provided by Nigerian companies such as Zinox Computers, Omatek Computers and Brian Integrated Systems. But the bulk of the money made by the former set of companies is repatriated to their home countries. Similarly, a fortune is spent on the purchase of software from foreign countries, while just a negligible percentage is produced locally. Therefore, the country loses a lot as a result of its inability to produce what it needs in the sector.

Therefore, positioning Nigeria to benefit from the huge potentialities in the sector will require the development of the country’s capacity to meet the needs of the hungry telecom sector solution seekers.

Speaking on the need to pay attention to local content, a former President of the Institute of Software Practitioners of Nigeria (ISPON), Chris Uwaje, said the country has to take the matter seriously. According to him, remaining a consuming nation would only make Nigeria a dumping ground for all manner of technologies.

Toeing the same line, Dr. Emmanuel Ekuwem, Group Chief Executive Officer, Teledom International, said in an interview, that the capacity of local companies to meet the needs of the industry must be enhanced. As he put it, “Most directives and policies in this industry are not being properly enforced. So, we need enforcement of those beautiful policies, especially one setting percentage of local content that should be attained by players in each sector in the area of local IT content patronage.”

Noting the importance of local content to the development of the telecommunications sector, Minister of Communications, Barrister Bayo Shittu, shortly after assumption of office, said local content development would be a major focus of his leadership of the ministry, promising to unveil a blueprint that would engender its realization. The minister assured that a local content development policy would be implemented to protect indigenous players in the industry.

According to him, the ministry would galvanise appropriate policies tailored towards meeting the needs of Small and Medium-scale Enterprises (SMEs), stressing that government’s role is to provide enabling environment within a free market economy.

Following up on this, the Minister, at the National Council on Communications meeting in Kaduna, unveiled a roadmap for the industry, part of which is moving for the establishment of a multi-campus ICT university and a National Digital Literacy Council.

The minister, who promised to work with his education counterpart to foster Digital Literacy Content in school curricula, premised the policy direction on the need to produce the manpower that will be able to produce both the software and the hardware needed to drive the sector. Barrister Shittu linked the not so good performance of the country in producing local content for the sector on knowledge and skill gap, stressing that equipping the youth with the required technological skills would make Nigeria an ICT hub, not just in the West African sub-region but on the continent as a whole. Barrister Shittu noted that the innovation centres in Lagos had helped in growing the skills of young Nigerians in software development but added that having more of such centres would result in the multiplication of people with such skills, which would increase the ability of Nigeria to earn more from ICT.

The minister also recognized that one critical factor to driving ICT is the broadband penetration, since ICT is largely internet-dependent. He said broadband penetration had not reached a desirable level in the country. He assured that all hands have been put on deck by the current administration to achieve 30 per cent broadband penetration by 2018. He added that the government was working hard to secure the cooperation of the international community and regional partners to achieve a reliable regional internet exchange points-of-presence.

But the ministry is not neglecting its other arm, the post, as efforts are on to reposition it to meet the expectations of Nigerians.

Barrister Shittu has promised to take the post in the country out of its current cocoon of mere mail movement into making it a centre that connects the people of the country beyond postal services. Although the Nigerian Postal Service (NIPOST) is already into skeletal financial services, the current administration hopes to make this one of NIPOST’s core areas of concentration. Throwing more light on this, the minister said NIPOST was known for its postal and money order services in the past, adding that with the infrastructure at the disposal of the organization, and its presence in almost every nook and cranny of the country, it is positioned to offer outstanding financial services to rural people and the unbanked. He said cash transfer service could be handled perfectly and professionally by NIPOST given its antecedent in rendering similar services in the past. He assured that NIPOST would leverage technology to offer a highly competitive cash transfer service.

It was also gathered that the leadership of the ministry is looking at ways of positioning NIPOST for e-commerce. This is based on the fact that already the post office provides a meeting point for people from diverse backgrounds. Working on this, and with the deployment of appropriate technology, the post office can offer more than postal and cash transfer services. It can delve into e-commerce by providing meeting points across the country for sellers and buyers of various commodities.

The essence of all of these, Shittu noted, is not just to make NIPOST a self-sufficient or self-financing government agency but to position it as an exemplary organization through increased generation of revenue for the government and employment opportunities for the nation’s teeming population.

It is obvious that with the effort put in place by the current leadership of the Ministry of Communications, the communication sector, which currently comes behind oil and gas as well as agriculture in revenue generation, is striving to move to the top of the ladder as the nation’s highest revenue generating sector. The way to accomplish that is to do more of what has been done to achieve more than has already been achieved.