The Nigerian telecom sector has experienced a lot of growth over the last two decades, especially in the area of active subscriptions and access to internet services.
For instance, the latest Nigerian Communications Commission (NCC) report revealed that the country’s total active subscriptions for telephone services, stood at 224.7 million at the end of 2023, compared to 222 million recorded at the end of 2022.
Much as there has been a lot of progress in the sector, it is crucial to identify areas where much progress can be made. One of such is the area of capital flight, which has marred the industry for years.
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 (which was based on the average annual reports of a sample of industry players in the telecommunications space over a five year period), showed that CAPEX programs engulfed $750 million; operators spent $250 million on Network Software Licenses; $800 million on management fees engulfed; $157 million on managed services (Tier 2 & 3 Support) and $200 million on miscellaneous (International circuits,roaming and terminations reconciliations etc).
Findings of a survey of industry players conducted by NCC in 2018 revealed that the ratio of Nigerians to Foreigners (for Senior, Line, Contract and Outsourced staff) in the industry is high in absolute terms (i.e. 98 per cent to two per cent). However, it should.
be noted that the larger operators (especially the Mobile Network Operators) have a healthier balance than smaller licensees and service providers.
There is also a higher percentage of foreigners among top management staff when compared with other staff, with Nigerians making up 31 per cent, in relation to foreigners who make up 69 per cent.
For software, 77 per cent of software in use are foreign, while only 23 per cent are obtained locally. w
With respect to hardware being used by the companies interviewed in the survey, 86 per cent of them are foreign while 14 per cent come from local companies. Data on Base Transceiver Stations (BTS) also revealed a dominance of foreign products over those produced locally, as 88 per cent are foreign with only 12 per cent being manufactured in Nigeria.
Stakeholders have however called for a concerted effort to reverse this trend by increasing local content.
Indigenous Policy
The first step to increasing local content in the country is through the formulation of policy that will guide the process, hence the reason the federal government came up with the National Policy For The Promotion Of Indigenous Content In The Nigerian Communications Sector in 2021.
According to the NCC, the policy is in line with the Nigerian government‘s commitment to ensure that Nigerians become active participants in the different sectors of the economy.
The 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.
Deepening Local Content in ICT Industry
The NCC being an Independent National Regulatory Authority, oversees Telecommunication Services in Nigeria.
One of its vision is to create a dynamic regulatory environment that ensures universal access to affordable and equitable service and supports the nation’s economic growth.
As a regulator of the telecommunications sector in the country, the executive vice chairman, NCC, Dr Aminu Maida averred that the Commission carries out its functions to ensure service availability, accessibility, affordability, and sustainability for all categories of consumers, who are leveraging on ICT/Telecoms to drive personal and business activities.
Maida, at the NCC Special Day at the 45th Kaduna International Trade Fair, in Kaduna state, Nigeria, assured that the Commission is fully committed to the advancement of local content and the overall development of the Nigerian economy.
We recognize the importance of deepening the local content value chain as a critical driver for economic sustainability and growth. The NCC remains dedicated to fostering an enabling environment for telecommunications industry, where local content and innovation can thrive as this is one of the most critical thrust of the Ministry of Communications, Innovation and Digital Economy.
We cannot overemphasize the fact that robust local content value chain will not only create economic opportunities but also contribute to technological advancement, job creation, and skills development within the country,“ Maida asserted.
Dissecting NCC’s role
In line with its commitment to supporting local content, Maida said the NCC has implemented various initiatives to promote indigenous participation in the telecommunications sector.
He averred that the Nigerian Office for Development of Indigenous Telecommunications Sector (NODITS), a critical unit in our Digital Economy Department and our Research and Development Department, encourages local manufacturing and assembly of telecommunications equipment, promotes local software development, and supports initiatives aimed at enhancing digital skills and entrepreneurship among Nigerian youth.
As effort to promote innovation, Maida posited that the Commission has sponsored a number of Hackathons to encourage and promote Nigerian innovator expanding the frontiers of the Digital Economy.
In 2023, three winners emerged in three critical thematic areas of innovations; Blockchain-enabled Data Protection Solutions for Enhancing Regulatory Compliance; Assistive Technology Solutions for the Elderly and People with Disabilities and Technology Solutions for Renewable Energy in Rural Areas,“ he added.
Themed: “Sustaining Economic Recovery through Deepening Local Content Value Chain” the NCC boss posited that the theme of the Kaduna Trade Fair Conference is extremely important, as it resonates deeply with the principles and objectives of the NCC on the promotion of local content development in the telecoms industry.
The NCC boss therefore tasked other critical stakeholders to deepen their commitments to sustaining economic recovery through the promotion of local content in the telecommunications sector.
