Nigeria’s ICT market loses billions as foreign firms control 80% share

PHOTO: VenturesAfrica

Despite the enormous growth and influence Nigeria’s Information and Communications Technology (ICT) sector has recorded in the last 20

years, activities of local firms remain low, making foreign firms to continue to dominate.

Currently, foreign brands, especially in the computing segment, control over 80 per cent of the market, leaving about 20 per cent to some indigenous players.

The Guardian learnt that multinational ICT manufacturers like Samsung, HP, Dell, Acer, Asus and vendors (Huawei, ZTE and Ericsson) continue to take control of the hardware market. This leaves indigenous operators like Zinox Computers, Brian Integrated Systems, among others, to battle to ensure that they are not pushed out of the market completely.

It was also learnt that about four million ICT devices enter the country on a monthly basis. This means that Nigeria continues to lose huge revenue in capital flights owing to the importation of hardware products. According to ICT experts, Nigeria remains a dumping ground for all forms of technologies, even those that are substandard.

The dominance of foreign products in ICT is equally robbing the country of the ability to develop a knowledge-based economy.

The Guardian learnt that as at early 2017, Nigeria was losing billions of naira to the preference for foreign ICT products and services.

The National Information and Technology Development Agency (NITDA) noted that within the last five years into 2020, the country would have spent about N120 billion on the importation of foreign technologies.

In an interview with The Guardian, the Director-General, Delta State Innovation Hub, Chris Uwaje, said that in tackling the challenge of foreign domination, the country must look critically into the issue of local content development.

Uwaje, a former president of the Institute of Software Practitioners of Nigeria (ISPON), stressed that Nigeria should not remain a consuming nation, but productive and should export its products and services to other countries.

“Nigeria should not be a dumping ground for all forms of technologies, Nigerians are good intellectually, we can also export our inventions and innovations abroad, but government factor is key in achieving this objective.”

At the yearly ISPON President Dinner held at the weekend in Lagos, with the theme ‘Fourth Industrial Revolution-A Golden Opportunity”, the Director-General of NITDA, Dr. Isa Ali Pantami, said that in an effort to discourage the frequent importation of foreign technologies, the Federal Government on December 2, 2013, launched the Nigerian Content Development Initiative, which was spearheaded by NITDA with the formal adoption of the regulatory guidelines for content development in the ICT.

According to him, the guidelines codified not only the earlier circulars and policies on local content development but also delineated roles and responsibilities for stakeholders and each sub-sector in the local Information Technology (IT) and telecoms sectors.

He said the guidelines were thus developed with the collaboration of the ministry, NITDA and the Nigerian Communications Commission (NCC) to make provisions for the enforcement of local content in the entire ICT industry.

“The main purpose of the local content initiative and the guidelines is to ensure that Nigerian ICT companies are able to significantly participate at all rungs of the ICT value chain to create jobs, wealth and knowledge locally.

“As a regulation governed by sections 6, 17, 18 and 32 of the NITDA Act of 2007 and sections 1 and 3 of the Communications Act of 2003, the guidelines have force of law and are mandatory,” he stressed.

Pantami, who confirmed that over 80 per cent of the Nigerian IT market has been overrun by foreign firms, added that by 2020, the country would have spent about N120 billion on the importation of foreign technologies.

To check the growing dominance of foreign technologies in the country, the President of the Computer and Allied Product Association of Nigerian (CAPDAN), Ahmed Ojikutu, said the computer village market was full of talents, who only require support, especially from government, to be able to unleash their ingenuity.

Ojikutu urged the Federal Government to create an enabling environment that can aid innovation and creativity among Nigerian youths.

In his speech, the Minister of Communications, Adebayo Shittu, called on Nigerians to support local contents in the ICT sector, saying this would boost the economy and create job opportunities.

The minister, who admitted that there were challenges in the country, said that government would create enabling policies and waivers for potential foreign investors to come and domesticate their products and services in Nigeria to strengthen the local content ecosystem.

Shittu said the government would patronise locally developed software to encourage the development of software technology parks.

ISPON President, Olorogun James Emadoye, said if Nigerians must support local contents they should ensure the letter and the spirit of executive orders 003 and 005 were brought to the fore and remain the guiding principles in all business transactions, in the overall interest of the nation.

At the launch of the latest Tecno Mobile phone in Lagos, Tecno Vice President of Transsion, Andy Yan, said government should tackle the challenges posed by fluctuations in foreign exchange and inconsistent policies, which, according to him, limit the focus of investors.

A telecoms expert, Kehinde Aluko, believes that for indigenous operators to indeed play an active role in the market and reverse the dominance trend, government must work on improving the infrastructure on ground.

“We cannot say we want to play big without constant and adequate power supply and improved manpower development,” he said.

Source: Gnp