Is 11% ICT sector contribution to Nigeria’s Gross Domestic Product (GDP) a pyrrhic victory for Nigerians? What is the real worth of ICT revolution to Nigeria’s economy? Olubayo Abiodun attempts to provide insight to the posers in this report
FOLLOWING the deregulation of the telecoms sub-sector in 2001, the industry’s contribution to the Gross Domestic Product (GDP) moved from less than 0.5 per cent in 2001 to six per cent in 2012. Subsequently, it grew to 10 per cent between 2013 and 2014 and currently hovering at 11 per cent. If Nigeria’s GDP is computed to be in the value of $500 billion, then the percentage contribution of ICTs cannot be ignored in real terms. This double digit figure has been codified as the single largest contributor to the GDP on sectorial basis. However, what is puzzling is the barefaced statistics that seemed to stand contradictory to the ornate attribution of the ICTs’ sector contribution to the nation’s GDP.
What could have gone wrong with a sector that placed Nigeria on the global map? Within the first ten years of the telecoms revolution which started with the Digital Mobile Licence (DML) auction in 2001, Nigeria’s telecoms industry was ranked among the top 20 in the world. The country’s telecoms sector was also rated as one of the fastest growing industry in the world and has continued to attract Foreign Direct Investments (FDIs).
The immediate past Minister of Communications Technology, Dr Omobola Johnson once regaled the public with some excitable statistics. Before she left the saddle in 2015, Johnson had said that between 2007 and 2013, the sector attracted over 24 per cent FDI projects. And to the bargain, she said Nigeria attracted the most FDI capital and the second most FDI projects in Sub-Saharan Africa. Within the corresponding period, during her tenure as Minister, Nigeria moved up 21 places in the United Nation e-Government Development Index (EGDI). Juxtaposing the statistics, she said that as at 2010, Nigeria ranked 150; in 2012 it was 162 but the country was placed at 141 in the EGDI in 2015.
While on the national stage and in some instances in the international arena, top officials of government and politicians aided by some statisticians often backslap and click glasses to celebrate the “profound” contribution of the ICTs sector to the GDP, however, the raw statistics speak to the contrary or at best diminished the so-called ICTs sparkles on the nation’s economy.
Nigeria’s current Minister of Communications, Adebayo Shittu, a lawyer by training and a politician by engagement, would seem to concur with those who prefer to use the cynical view to appraise the performance of the sector. In his address to a gathering of stakeholders during a reception in his honour by the Association of Telecommunications Companies of Nigeria (ATCON), he noted without prevarication: “Reports reaching me show that the country is losing about $2.8billion yearly to the continued importation of ICT hardware and services as capital flights from the country.” What manner of growth then is Nigeria celebrating in the ICTs sector if the country losses such humongous figure on an annual basis? What is the pride of the largest economy on the continent if the nation is predominantly import dependent? The truth must be told if the nation actually desires to move away from the woods. The profile of the acclaimed “biggest economy” on the continent sulks in a bizarre state of sloppiness.
Curiously, if the ICT sector is that productive going by the quantum of its contribution to the GDP, how come Nigeria’s foreign reserves has continued to suffer haemorrhages, partially, as a result of the heavy reliance on imported goods and services in the ICTs sector? Shittu rather than dwell on the validation or otherwise of the published statistics on ICTs contribution to the GDP would rather counsel on the need for more productive engagements locally by the international brands. “We would like to see international brands establish factories in Nigeria or partner with any local operators or by buying components of their systems that are produced by local manufacturers as well as maintaining in-country research and development departments for the purpose of product conceptualization, innovation, adaptation and design development. The local content development policy would be implemented to protect indigenous players in the industry and the Ministry would galvanize the right policies that would see to the need of Small and Medium scale Enterprises (SMEs).”
The Minister is not alone on this clarion call. More often than not, policy makers, technocrats, investors and market operators have continued to reiterate that the ICT sector is the main driver of growth to take the economy away from the tipping point. A former Permanent Secretary, Tunji Olaopa, another technocrat in the ICT Ministry expressed mixed optimism about the current profile of the sector contribution to the GDP. Even with the acclaimed 11 per cent and it ranking as one of the major contributors to the GDP, Olapoa still lamented that the growth potential of the ICT industry has not been fully harnessed because of the slow rate of collaboration between local and foreign ICT multinationals to develop local contents in the sector on a win-win basis.
What is the basis of Olaopa’s trepidation? He said that ICTs growth has not yet translated into jobs and commensurate wealth for the nation. “The reason is simple. Nigerian companies either lack the capacity or the opportunity to leverage this growth potential to participate significantly at many levels of the ICT value chain.
“Therefore, a fundamental component of the Local Content Development Program is rooted in a compelling patriotic and strategic drive to build the capacity of the indigenous companies to enable them to take advantage of the opportunities in ICT and actively participate at all levels of the value chain of ICT products and services,” he stressed.
Shittu shared the same opinion with Olaopa saying that “I have observed that one of the major challenges to growing Nigeria’s ICT sector has largely been apathy towards indigenous products and services. This challenge had bedevilled the business of local information technology players in the country, from hardware to software and to services; it had been the same story.”
Acknowledging that ICTs is the critical driver of the knowledge-based economy of the post-modern world, he stressed that emphasis has shifted from nations with huge natural resources to nations with developed human resources that can technologically explore, exploit and manage natural resources for the benefit of mankind. And one of the novel ways, the Minister is proposing to bridge the gap in the shortfall in capacity is in the establishment of a dedicated tertiary training school in Nigeria.
With the persistent dwindling revenues from oil, Shittu is convinced that “ICT offers Nigeria the best hope of employment generation for the youth. It offers the best hope of increasing the productivity of our national workforce through train and re-train. It also offers the best hope of activating positive revolution in promising sectors such as: Agriculture, Solid Minerals, Entertainment, Textiles, etc.”
Riding on this conviction, the Minister has indicated his interest at converting the Digital Bridge Institute (DBI) to a full fledge university. DBI is a professional institute for capacity building in the ICT sector established by the Nigerian Communications Commission (NCC). It has centres in Abuja, Lagos, Kano and Enugu. According to him, “The country does not have a dedicated institution for ICT awarding degrees. I want to advocate for one. It is the policy of this government to convert the Digital Bridge Institute in Lagos and other cities into a multi-campus ICT University, perhaps the first of its kind in Africa”.
While also joining the growing clamour for the diversification of Nigeria’s economy from the current mono-focus on oil revenues, he stressed that Africa is looking up to Nigeria to take advantage of its vast human and material resources and become the catalyst for economic emancipation of other continents.
Also emphasizing the need to build local capacity in order to have a flourishing local content ecosystem, he expressed concerns about the wide spread apathy towards indigenous products and services in spite of government’s efforts to grow the ICT sector. According to him, “It is because of this that we want NIGCOMSAT to have enough capacity for keeping data. We want to do this so that we can be in the position to insist that Nigeria institutions must patronise Nigeria satellite companies instead of seeking the services of foreign based satellite companies. He said that government does not have intention of hijacking the space but only to provide an enabling environment within a free market economy.
Industry fraternal associations are also bordered about the ‘sloganeering’ on the ICTs performance and contributions to Nigeria’s economy. One of such is the national President of ATCON, Lanre Ajayi, who has a bone to grind with the Nigerian government in the poor manner it has handled the implementation of the National Broadband Plan. To him, ICTs could provide greater contributions to the GDP if the local capacity is well managed. And he expressed his displeasure on the tardiness of government in an eye-ball-to-eye-ball engagement with the Minister. He typified his concerns with measurable statistics because the National Broadband strategy and roadmap had based the growth in the sector on a five-fold projection. According to him, the National Broadband Plan which was designed to achieve 30 per cent growth from its 6 per cent status between 2013 and 2018 had only recorded 10 per cent as at 2016. “We noticed that most of the timelines in the plan are not met and there is general poor supervision of the plan implementation,” he said.
He identified the lack of appropriate local Internet content as one of the factors leading to low broadband penetration in the country. To bridge the gap, he called on government to strengthen e-government platform as a precursor to growing the local content ecosystem and stimulating demand for broadband in the country.
Ajayi also urged the Minister to ensure the inauguration of the National Cybersecurity Council in order to enhance the accelerated implementation of the cybersecurity act meant for the protection of the national critical infrastructure. He also pleaded with the Minister to ensure that the management of spectrum allocation is streamlined to avoid the crisis that rocked the sale of the 700MHz to MTN Nigeria by the National Broadcasting Commission (NBC). On the $3.4 billion fine imposed on MTN Nigeria by the NCC, he urged the federal government to err on the side of caution in order not to project Nigeria as a hostile nation to direct foreign investments. While stressing that ATCON was not encouraging impunity on the side of the operators, he said that punishment when applied must not lead to the death of the institutions concern since the breach was not done with a criminal intention to injure the nation’s national security.