National Policy For The Promotion Of Indigenous Content In The Nigerian Communications Sector
The management and board of Nigerian Telecommunication (NCC) has step out its comfort zone of foreign suppliers into local suppliers going forward through published document posit on the website titled “The National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector” saying it is in line with the Nigerian government’s commitment to ensure that Nigerians become active participants in the different sectors of the economy.
The published document excerpts a statement to back up claim by saying this is clearly stated in Presidential Order 005 on “Planning and Execution of Projects, Promotion of Nigerian Content in Contracts and Science, Engineering and Technology” and Presidential Executive Order 003 on “Support for Local Content Procurements by Ministries, Departments and Agencies of the Federal Government of Nigeria”.
“This Policy addresses pertinent areas, including manufacturing, services, people, research and development, further advancing the goal of the nation being self-sufficient in every sector of the economy.
“Developing the capacity of Nigerians in these areas will ensure an enhanced role for Nigerians in the design and manufacture of devices and in meeting the manpower requirements in the sector. This is in line with the mandate given to the Ministry of Communications and Digital Economy to actively collaborate with the private sector to create a large number of well-paying jobs for Nigerians and the government’s programme to take 100 million Nigerians out of poverty over a 10 year period
Meanwhile State of Affairs of the Nigerian Telecom Sector as it stated below:
The Nigerian telecom sector has experienced a lot of growth over the last two decades. For example, the sector has experienced a significant increase in the number of subscribers and an exponential increase in the inflow of Foreign Direct Investment (FDI).
The Nigerian Communications Commission, acknowledging the country’s FDI gains stated that the industry moved from a paltry $60 million private sector investment in 2000 to about $68 billion in 2016. Much as there has been a lot of progress in the sector, it is still useful to identify the areas where much progress can be made.
One of such is the area of capital flight, which has also been significant.
The Federal Government is committed to reducing this amount significantly, in line with the mandate of His Excellency, President Muhammadu Buhari GCFR that we “produce what we eat and consume what we produce”. According to available statistics provided by the leadership of the Association of Telecommunications Companies of Nigeria (ATCON), the annual outflow of foreign exchange for the telecommunications sector amounts to approximately $2.16 billion.
A breakdown of the forex spending is as follows:
- CAPEX Programs- $750m
- Network Software Licensing- $250m
- Management Fees- $800m
- Managed Services (Tier 2 & 3 Support)- $157m
- Miscellaneous (International circuits, roaming and terminations reconciliations etc) – $200m
The statistics were based on the average annual reports of a sample of industry players in the telecommunications space over a 5 year period. This is a significant portion of our average annual budget and it is critical that this trend is reversed.
A survey of industry players conducted by the Nigerian Communications Commission (NCC) in 2018 resulted in the following findings:
- the ratio of Nigerians to Foreigners (for senior, Line, Contract and Outsourced staff) in the industry is high in absolute terms (i.e. 98% to 2%). However, it should be noted that the larger operators (especially the Mobile Network Operators) have a healthier balance than smaller licensees and service providers; 10 National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector
- there is also a higher percentage of foreigners among top management staff when compared with other staff, with Nigerians making up 31%, in relation to foreigners who make up 69%;
- for software, 77% of software in use are foreign, while only 23% are obtained locally;
- with respect to hardware being used by the companies interviewed, 86% of them are foreign while 14% come from local companies; and
- data on Base Transceiver Stations (BTS) also revealed a dominance of foreign products over those produced locally, as 88% are foreign with only 12% being manufactured in Nigeria.READ MORE