The federal government said it is committed to reducing capital flight in the telecommunications industry with the development of the ‘National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector’.
The policy which was launched recently by President Muhammadu Buhari will ensure we develop a telecoms sector where innovative indigenous solutions create value and prosperity for all.
The policy aims to successfully promote indigenous content in key areas where the development of such capacity will have the greatest level of impact such as in manufacturing of Subscriber Identity Module (SIM) cards, smartphones, recharge cards, parts, fibre optic cables, masts, etc.
In the area of Services and Software for Telecom sector, it aims to develop indigenous content in Business Support Services (BSS), Operations Support Systems (OSS), Performance Monitoring, Customer Resource Management, Data Analytics and Network Inventory Management, etc.
Also, the policy focuses on encouraging skills rather than degrees and to support for emerging technologies, etc. as well as on Research and Development for Digital Innovation and Entrepreneurship.
According to the Minister of Communications and Digital Economy, Dr. Isa Ibrahim Ali Pantami, “The focus of the Policy aligns with Pillar #8 of the NDEPS document, which deals with the development of Indigenous Content Development and Adoption.
“The growth of indigenous content in the digital sector can accelerate the growth of the sector and ensure that the nation can stem the tide of capital flight and increase the value addition of indigenous content to the sector,” the Minister added.
Citing statistics provided by the leadership of the Association of Telecommunications Companies of Nigeria (ATCON),the policy stated that the annual outflow of foreign exchange for the telecoms sector amounts to approximately $2.16 billion.
A breakdown of the forex spending shows that capital expenditure programmes cost the country $750 million; network software licensing- $250 million; Management Fees- $800 million; Managed Services (Tier 2 & 3 Support)- $157 million; and Miscellaneous (International circuits, roaming and terminations reconciliations etc) – $200 million.
The statistics were based on the average annual reports of a sample of industry players in the telecoms space over a five- year period. The policy stated that it is a significant portion of our average annual budget and it is critical that the trend is reversed.