Last month Nigeria’s Minister of Communication Technology presented her report card at the ICT fourth ICT Stakeholders Forum in Lagos. Clifford Agugoesi reports
THE recent slump in the price of crude oil in the international market has once again justified the Nigerian government decision to seek ways and means of reducing the country’s dependence on oil and broadening its sources of revenue. One such move was the establishment of, among others, the Ministry of Communication Technology (FMCT) under President Goodluck Jonathan’s Transformation Agenda (2011-2015), which was meant to guide the country to attaining its Vision 20:2020 goal – aimed at placing Nigeria among the world’s top 20 economies by 2020.
ICT has not let the government down, it would seem. It has played a major role in national growth and development. Under the guidance of Dr. Omobola Johnson, a former Country Manager at Accenture Nigeria, the FMCT has been the fulcrum for ICT expansion in the country.
Almost four years on, the Minister presented her report card at the 4th ICT Industry Stakeholders Forum, held in Lagos, last month. In 2011, the industry was dominated by the telecommunications sector and multilateral corporations. The industry’s contribution to the gross national product (GDP) of Nigeria then was a mere 5.46 per cent, featuring a fragmented IT sector with small domestic players comprising nearly 350 companies.
Domestic value added in key areas was sub-optimal and it was characterised by consumer preference for global brands and high levels of importation of inputs and finished products encouraged by the tariff regime and challenging operating environment for manufacturing. Over $360 million was transferred out of the country to purchase IT products and services.
Things are different today. The industry is ranked with oil and gas and power. In the third quarter of 2014 the industry contributed 9.58 per cent to GDP, while enabling other sectors of the economy. This has helped to create local companies that are innovating and adding value to the economy.
The Nigerian telecoms sector is one of the fastest growing in the world and continues to attract foreign direct investment (FDI). An additional $6billion was made between 2011 and 2013, according to figures released by the Nigerian Communications Commission (NCC). The ministry has been able to lay down the following key policy documents: National ICT Policy, National Broadband Strategy and Local Content Guidelines, which have recorded massive impacts as a result of what the industry perceives as the judicious application of the principles contained in the policy documents.
The stock-taking presentation by Johnson highlighted the priorities of the FMCT, whose objective is to deliver on the promises of the transformation agenda by addressing the challenges in the ICT industry and leveraging the opportunities for socio-economic development in.
In the area of Infrastructure development, the ministry is implementing ‘Connect Nigeria’, aimed at providing a ubiquitous, robust and cost effective ICT infrastructure to support the creation and development of a digital economy. The vehicle for inclusive development is the ‘Connected Nigerians’ programme through which the FMCT is catalysing access to infrastructure and devices ownership. Also the ministry is promoting Local Content by ensuring an increasing domestic value added in the ICT industry while its IT in Government’ programme promotes e-Governance by harnessing ICTs to ensure transparency, efficiency and productivity in governance and citizen engagement – which will create an enabling environment to foster investments both at local and international levels and deliver on the mandate to increase contribution of ICT to the nation’s GDP.
“Our current focus has yielded significant dividends,” stated Johnson. “The ICT sector is growing at 24 per cent annually and the contribution of ICT to the nation’s GDP has increased from 5.6 per cent since the ministry’s creation in 2011 to 7.8 per cent in 2013. Given the significant inroads made, the ministry is confident that the contribution to national GDP would significantly increase by 2015. In terms of connectivity, we have achieved remarkable progress in facilitating increased access to ICTs. Teledensity ratio increased tremendously to 88.62 per cent in 2013 and over 121 million active subscribers are now connected.
“In 2012, the number of telecom subscribers was 114.76 million against 95.9 million in 2010; which represents a 19.5 per cent increase in telecom subscriber base. The ministry’s achievement in the area of IT In Government shows that the number of Government services delivered online has increased tremendously. The number of Ministries, Departments and Agencies (MDAs) with government allotted websites has increased to 420 and by 2015 all the MDAs will have allotted websites.
“As at June 2012, Nigeria was home to 48.4 million Internet users up from 45 million as the end of 2011. The 2012 figure represents 28 per cent penetration rate and 229 per cent of total internet users in Africa making Nigeria the largest internet market in Africa by volume,” the minister added.
According to her, improving environment for investment and rapid growth in the country’s telecom sector led to increased market potentials for submarine cables. Capacity at the shore increased from 4.78 terabits per second (TBPS) in 2011 to 11TBPS in 2014. The coming of MainOne reduced the cost of international bandwidth between $1700 & $1200 to between $700 & $500 per Mbps.
“Now, with SAT3, Glo1, MainOne, WACS and ACE, landing on our shores, the cost is between $300 & $400 per Mbps and ’to ensure diverse cable routings, an alternative landing point outside Lagos is being considered for future cable landings” Johnson said, adding that her ministry’s trust is to ensure the cost keeps falling for the benefit of consumers.
The reasoning within the ICT industry is that prices of bandwidth will not decrease appreciably to a point where it could be described as pocket friendly, from the point of view of consumers, until something critical happens at the last mile. These challenges are being addressed as the ministry works in concert with its agencies – the Nigerian Communications Commission (NCC), National Information Technology Development Agency, (NITDA), Nigerian Postal Services, (NIPOST), Nigerian Communications Satellite, (NIGCOMSAT) and Galaxy Backbone.
Through the NCC, the ministry successfully auctioned 2.3GHz spectrum in March 2014, which was won by BitFlux, which is yet to commence services. The 2.6GHz spectrum licence will be issued by the first quarter of this year. Also, licensing of infrastructure companies (InfraCos) to provide efficient wholesale bandwidth services on a non-discriminatory, open access and price-regulated basis as well as provide metropolitan fibre and transmission services, is underway. The Executive Vice Chairman and chief executive at the NCC, Dr. Eugene Juwah, disclosed at the Forum that both MainOne and IHS, were winners of the InfraCo licence in the Lagos and North Central zones, respectively. The winners of the other five licences are yet to be announced. The applause that greeted the announcement of both companies means the industry is satisfied with the choices, although concerns on market dominance and throttling of consumers were expressed by a cross section of the audience. However, an NCC official said these fears are unfounded, as the regulator was there to ensure there were no infractions in the telecom market.
Under Connect Nigeria, Fibre Optics Rollout, by early 2011, over 30,000 kilometres of long haul intercity fibre was laid by legacy cabling and telcos. As at December 2013, the telcos had deployed a combined total of 68,124 kilometres of fibre optic cabling and in 2014 the telcos alone deployed an estimated 38,000 kilometres of additional fibre optic cabling.
While integrating the broadcast sector with the telecom, IT and postal sectors to fast-track convergence of the ICT sector is desirable, and is in sight, Johnson said it had to be done in such a way that the activities and programmes of one agency did not antagonise that of the others, which could stall progress.
Meanwhile, the FMCT says it is pushing the reforms of the postal sector as well as the privatisation of NIGCOMSAT. NIPOST is a 160year-old old institution and the public/national operator of postal services in Nigeria. Prevailing local and international market forces are increasingly challenging NIPOST’s viability thereby making it imperative for it to be restructured and reformed. This process began way back in the early 2000s and while the conceptual framework for this transformation has been developed, the process of its ownership and actualisation has suffered some setback.
Concrete steps taken by the ministry towards accomplishing the reform of the postal sector include:
Nigeria Postal Commission Bill: This has been crafted to reform and reposition the Nigerian postal sector that is efficient, better funded and capable of delivering services that meet universal obligations enshrined in national policies and programmes such as the Transformation Agenda and Vision 20:2020.
National Addressing Policy: On November 27, 2013, the Federal Government considered and approved the National Addressing Policy which is a framework for providing uniform street naming, house numbering and address database patterns that would be applicable to all structures and land tracts across the country. The policy goes beyond merely naming streets and numbering property to encompass a nationally agreed plan that will guarantee consistency irrespective of the local government area (LGA) an individual or entity is located. It also ensures that a dependable system for storing, maintaining and reusing data is established. National addressing is supposed to be the responsibility of local governments, but their lethargy in terms of preparation of plans for property location/addressing and enforcement necessitated NIPOST’s intervention. Beyond national addressing, government perceives NIPOST as a strategic asset in the attainment of social, economic, financial and digital inclusion in the country, considering the size and ubiquity of its infrastructure. Part of the reform process of NIPOST is to separate its regulatory and commercial functions.
In order to erase the perception in some quarters that tended to portray NIGCOMSAT as a cost centre, the Minister announced that NIGCOMSAT 1-R has increased its commercial value through the generation of revenue for government investment by leasing of 5 KU transponders, C-Band, Broadband sale and the leasing of Direct to Home (DTH) platform to private strategic partners. Also ongoing projects are being designed that will increase revenues from this asset such as lease of KA transponders billed for the first quarter of 2015 (Q1 2015). In 2012, 2013 and 2014, NIGCOMSAT made N3,654,955.04, N263,753,354.34 and N648, 866,688.00, respectively, in revenues.
The minister also disclosed some generic and specific interventions by her ministry to drive ICT inclusiveness and create jobs, particularly as they affect persons with disabilities and the girl child.
The Forum was, by all intents and purposes, a dialogue, for participants took time to make contributions on the way forward for the sector as well as raise germane questions concerning the trust of the ministry’s intervention programmes and activities and their continuity, after the exit of the minister post-2015 elections.
On the question of continuity, Dr. Johnson said: “First of all when you look at what we did, I talked about our priorities – Connect Nigeria, Connect Nigerians. These are priorities that we engaged with the industry before they came on board. They were not things we sat down in Abuja and concocted. And I would, regardless of who the next minister is, be surprised that anybody would come to the ministry today and say: ‘broadband is not important and we are not going to develop broadband anymore’. I will find it surprising that the value added in the industry in creating jobs is not an important area of priority.
“First of all, the priorities that we have are not just priorities for the ICT sector; they are national priorities. So it will not take a while for anybody to see the progress that we have been making. The second reason why I would find that surprising is that I am sitting here today, just as the minister, but the industry persons are the ones that are implementing these policies and the agencies are tenured so when we are talking about the reform of NIPOST, it is not something that the ministry started. NCC will continue to regulate and maintain that predictable environment for investment in the telecom sector,” Johnson said.
She went on: “NIGCOMSAT consumes a large part of our budget and I would be surprised if the honourable minister would not support the privatization of NIGCOMSAT to make more money for the government. A lot of these things require common sense and the sense that I get is that we are going in the right direction and I would be surprised if someone will come up and say: ‘you are doing the wrong things with these policies’; what they may say is that you can fine-tune it this way or that way and we will do that. So what I would expect is that if the next administration comes and we see him/her doing things different from these priorities, then I would expect the industry to resist that. So I am throwing that responsibility back to the industry.”
And, she got a standing ovation for all this.