Nigeria’s Telecoms Sector Still Imports 84% Hardware Components

A new report has revealed that 84 per cent of equipment and devices being used in the Nigerian telecoms sector are imported, with only 16 per cent manufactured locally.

The report on the level of indigenous content in Nigeria’s telecom published by the Nigerian Communications Commission (NCC), disclosed that critical equipment such as Base Transceiver Stations are mainly procured from overseas manufacturers.

While the growth in the Nigerian telecommunications sector has been phenomenal, from some 400,000 functional phone lines in 2001 to over 209 million active mobile subscriptions, achieving a teledensity of 110 per cent, as of August 2022, the growth in indigenous software in the sector has not been as phenomenal, the study averred.

Findings of the study also revealed that the current level of local content on software in the Nigerian Telecoms Industry has a ratio of 77 per cent to 23 per cent to the advantage of foreign software manufacturers.

The implications, according to the report, is that aside from the national security implications of the over-reliance on foreign manufactured equipment, it also negatively impacts the national economy in many ways, majorly around the obligations to expend scarce foreign exchange to fund the importation, while calling for the need to build more local capacity in telecom equipment.

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On human resources, the study revealed the dominance of Nigerians in the Nigerian Telecoms sector workforce to the ratio of 97 per cent to three per cent.

Nigerian workers are employed in far more companies than foreign workers, but they tend to be junior and mid-management level employees, the report stated.

“The Nigerian telecommunication operators employ around eight thousand people directly and around three million indirectly. Although direct employment is easier to quantify, indirect employment has a wider and more profound impact.

“The top category of indirect employment encompasses equipment sales, infrastructure deployment, advertising, marketing, and public relations as well as security workers who are involved in the protection of base stations. At the base of the pyramid, there are mobile service resellers, technicians, recharge card distributors, retailers, phone booth operators as well as street vendors,” the report said.  

The report acknowledged that locally produced, cutting-edge software, like Remita by SystemSpecs Limited for Treasury Single Account (TSA) management used by MDAs, stands out as a success story in Nigeria but stated that this must be replicated in the telecom industry with the right motivation.

The e-Government Operation Solution (eGOS) by Connect Technologies Limited and iX-Trac by Infosoft Nigeria Limited, which are strong pieces of software capable of competing with any foreign software of the same category, were also mentioned as examples of successful indigenous software offerings outside the telecoms ecosystem.

It emphasised that increasing local content in the delivery of services and products in key sectors of the country’s economy could make a major contribution to the achievement of the UN’s Sustainable Development Goals (SDGs), while adding that this could also improve the local economy, lower project costs, ensure infrastructure is well maintained and above all, create jobs.