| NIGERIA
: ICT4D Annual Review 2007
A
synopsis of the ICT4D sector in
Nigeria
incorporating activities of the Government, Private Sector and
Non-Governmental Organizations.
By
Bankole
Olubamise
Executive
Director,
Development
Information Network,
7,
Adesoye Street
, Mende,
Maryland
,
Lagos
.
Bankole.o@devnetnigeria.org;
bolubamise@yahoo.com
and
Jide
Awe,
Managing
Director,
Jidaw
Systems (Mastercomputers) http://www.jidaw.com
a.
Background
Information and
communications are integral to human society.
In African societies that existed before colonial rule, people
communicated using various instruments and codes such as talking drums,
flutes, gongs, town crier and village square meetings.
Many historical records are still recorded on the walls of caves, and
especially through oral tradition. The use of writing and the invention
of printing transformed the type and content of recorded history.
Communications on a universal scale became possible through the
use of books, newspapers, magazines and radio. “More recent
technological innovations increased further the reach and speed of
communications, culminating, for now, with digital technology”.
The advancements in
technology has created so many ICT tools that are necessary and useful
in the development process. These new technologies have become central
to contemporary societies. A basic classification by Chris Nicol of
Association for Progressive Communications of these modern technologies
is as follows:
- Information Technology uses computers, which
have become indispensable in modern
societies to process data and save time. The use of computers is so
pervasive to modern development in commerce, education and
governance amongst others.
- Telecommunication Technologies includes
telephones-mobile, fixed (with fax), and broadcasting of radio and
television, often through satellites;
- Networking Technologies, of which the best
known is the internet, but which has extended to mobile phone
technology, Voice Over IP telephony, satellite communications, and
other forms of communications that are still in their infancy.
These all have come to
dominate modern society and become the basis for the survival of the
modern man, thus defining what is now called the information society.
This is the information age!
Globalization-though few
agree on any single definition, it generally describes a world where
market forces are the driving forces. Today, trade and investments are
expanding the hitherto known boundaries of nations. We hear about
liberalization, free markets, deregulation, privatization of public
enterprises among others as part of the globalization processes. In
fact, the major instrument of globalization, information technology has
created a global village. According to Alfred P. Sloan, "the big
work behind business judgment is in finding and acknowledging the facts
and circumstances concerning technology, and the market in their
continuously changing forms. The rapidity of modern technological change
makes the search for facts a permanently necessary feature." Bill
Gates supports him by saying "how you gather, manage, and use
information will determine whether you win or lose". De Horowitz,
former President of the International Federation of Library
Associations, made this assertion many years ago to the effect that,…developing
countries of the future would be those who come late to the information
revolution.
The world’s digital
divide is now rather apparent and reinforcing poverty. All the Computers
and telecommunications facilities in
Africa
are not up to 50% of those of
New York City
in the
USA
. This huge gap in application of ICT in the development process is
furthering the pauperization of the poor and expanding the gap between
the rich and the poor part of the world.
The situation is further
aggravated by a lack of ICT policy or poor implementation strategies in
many
Africa
states. In
Nigeria
, the Information Technology policy passed in 2001 is completely out of
date and in need of review. However, over the past three years the
government has made certain advances in the field of telecommunications,
with the arrival of GSM technologies, telephony has increased in urban
centers, with majority of the population still largely unaffected by the
revolution. On the other hand the lack of integration of all these
recent developments is still a cause for concern.
It is in light of the
foregoing that the government set up the National Information Technology
Development Agency, which is to anchor the governments’ ICT policy
implementation strategy. The National Strategic Action Plan is to
provide concrete implementation strategies over the next 5 years for the
key sectors –health, education, infrastructure, human resource
development, Agriculture, Legal/Regulations, private sector/industry,
media/community, amongst others - as part of an integrated approach to
achieving national development espoused through the new National
Economic Empowerment Development Programme (NEEDS).
Nigeria
is
Africa
’s most populous country, with a population 140million. Though with
oil resources,
Nigeria
is actually a poor country with only US $17 per person per day in 2002.
Nigeria
is also severely under-aided. International development assistance is
$1-2 per capita compared to a sub-Saharan average of $21 per capita.
In May 2004 the National Economic Empowerment and Development Strategy
(NEEDS) was launched as
Nigeria
’s home-grown poverty reduction strategy. Similar strategies are being
developed across the 36 states, called State Economic Empowerment and
Development Strategy (SEEDS). The NEEDS and SEEDS focus on achieving
growth, better service delivery, reform of government and the political
system, and transforming values to overcome corruption and inefficiency.
According to the CBN
(Central Bank of
Nigeria
) manufacturing capacity utilization fell from 47% in 2005 to 22.7
percent in 2006.
Generally, the economic performance was mixed, with the average capacity
utilization in the manufacturing sector closing at 40 per cent at the
end of December 2005 down from 45 percent
as at
December 31, 2004
. The economy witnessed an increase in Foreign Direct Investment,
especially in the non-oil sector of the economy, which was buoyed by the
banking consolidation drive at the end of which 25 banks were approved
as being fit for services.
The ongoing economic
reform programme coupled with high crude oil prices boosted the
country’s external reserves and enabled the defense of the Naira
exchange rate by the Central Bank of Nigeria (CBN).
Latest figures released
by the CBN shows that
Nigeria
’s gross external reserves reached an all time high of $40.5 billion.
Information and
Communications Technology in
Nigeria
: The Journey so far
Nigeria
imported 100 percent of all its IT equipment, and a diversity of firms
exists to supply, service, and maintain imported equipment.
This was the scenario until very recently, when two major developments
have also placed a Nigerian Brand on the International ICT market. Zinox
Computers and OMATEK Computers now assemble their own brands of Desktop
and Laptop computers for the International market, with government
patronage. The liberalization policy of the government has greatly
reduced the cost of acquiring a computer unit.
Now, its fashionable to have access to desktops computers at
costs below $400-1000, something unimaginable just five years ago!
Historically, as at
1994, there were more than 200 registered companies in
Nigeria
offering a broad range of computer related services. Most of them were
set up between 1977 and 1982 to take advantage of the indigenization
decree and the then prevailing economic boom. A partial survey conducted
in 1986, involving 47 computer companies, showed that 88 percent of
these were vendors; 79 percent were consultants; 70 percent offered
training services; 68 percent had maintenance facilities; while 45
percent offered bureau services.
Today the structure of
the industry would still be largely the same. Vendors representing all
the major global brands in ICT dominate the industry. Between 1999 and
today, some of the leading brands have opened country offices along side
their vendors/distributors. Microsoft, Hewlett Packard, Samsung, Dell ,
CISCO, ORACLE, are among the leading brands with a Nigerian office.
Nigerian owned firms are now also growing in strength, but besides Zinox
and Omatek, they are largely players in the distributive trade.
The developments in
telecommunications over the past four years, especially with the advent
of GSM technology has also spurn new companies offering telephone sales
and after sales services. In fact
Nigeria
has been ranked as the fastest growing Telecommunications market
according to a report by Actis.
Nigeria
has certainly left the telecomm state where there were only a few
dial-up e-mail providers and Internet service providers (ISPs) and when
Nigerian Telecommunications Limited (NITEL) was the only
Telecommunications operator. It was a dark era characterized by slow
Internet links, poor service, high cost, lack of infrastructure and an
unprogressive telecoms monopoly. Things have certainly changed.
Deregulation of the telecommunications sector led to the
introduction of major Global System of Mobile Communications (GSM),
mobile phone providers such as MTN Nigeria, Celtel, Globacom and Mtel
are key players. Towards the end of 2006, Nitel and Mtel were acquired
by a multipurpose vehicle-Transcorp Inc.
Nigeria
's government had earlier provided the impetus for liberalization by
setting up the Nigerian Communications Commission (NCC). Although NCC
became the regulatory body for
Nigeria
's telecom sector in 1992, it is the present government that dealt with
the telecom policy, interconnection agreements and the empowerment of
NCC. The process commenced with the launching of the National
Telecommunication Policy in year 2000. In 2003 the Nigerian
Telecommunications Act was passed by the National Assembly, giving
autonomy to Telecommunications Regulator, the Nigerian Communications
Commission (NCC). NCC issues licenses to private telecoms companies
providing a variety of telecom services to the Nigerian populace.
The GSM revolution changed the face of Information and
Communications Technology in
Nigeria
. But the picture will not be complete without mentioning the Private
Telephone Operators (PTOs) and other landmarks such as the licensing of
Globacom as
Nigeria
's second national operator (SNO) as well as the licensing of 22 fixed
wireless operators. Though Globacom is presently more active in the
mobile telephony sector (Glomobile), it has the same licenses as NITEL.
Globacom's license constitutes a multi-service package of National
Carrier, GSM, International Gateway and Fixed Wireless Access (FWA).
At present there are (two) national carriers, 5 (four)
digital mobile (GSM) operators
and over 20 operators have been licensed to provide fixed wireless
services at national and regional levels. Some of these PTOs and FWAs
licensed earlier have now been granted Universal Licenses and
about two of them – Multilinks and Starcomms have rolled our GSM
services.
Since the GSM launch, mobile telephony has rapidly become
the most popular method of voice communication in
Nigeria
. Growth has been so rapid that
Nigeria
has been rightly described in various fora as "one of the fastest
growing GSM markets in the world". Indeed these developments have
been truly explosive:
According to Chief
Cornelius Adebayo, the former Federal Minister of Communications, (ITU,
March 2006) “The number
of fixed lines which was about 700,000 in 2002 had almost doubled by the
end of 2005, while the number of Mobile lines had risen from about 1.56
million in 2002 to the present figure of about 20 million. It is no
wonder then that the Nigerian Mobile market has been rated as one of the
fastest growing in the world and it is projected that by the year 2010
it will be
Africa
’s biggest mobile market. The prices of SIM Packs have crashed to the
extent that these are now virtually free. Investment in the sector
continues to grow and has risen to over $10billion from $50 million in
2000 and the investors are smiling to the banks, from the profit figures
published by the operators”.
But
Nigeria
's telecom infrastructure story and growth has not been due to GSM
alone. For example, GSM doesn't have much to do with the upsurge in
Internet usage and access. In essence it is the combined activities of
Nigeria
's telecoms providers - GSM, FWA, PTOs, telephony and VSAT operators and
NCC's regulatory efforts that have led to increased competition and
availability of a wide range of voice, data and internet applications
and services. The improvement in the telecom situation in
Nigeria
has made significant impact in all sectors - commerce, social and
educational.
Deregulation has also led to the issuance of licenses for
fixed wireless networks, Internet services, VSAT (Very Small Aperture
Satellite System) and telecommunication equipment services. The telecom
boom has resulted in greater usage of Internet Technology, growth and
availability of cyber cafés, increased Internet provision by ISPs and
PTOs, increased communications services (mobile telephony, e-mail, VOIP),
reduction of Internet costs, online information gathering and research,
e-learning, Internet business opportunities, online advertising
opportunities as well as developments in e-banking. Growth has been
phenomenal because
Nigeria
’s size is massive and Nigerians have been starved of such access for
decades.
A few years ago, "cyber café" was a strange
word from another world. Today cyber cafés exist in virtually every
neighborhood especially in the urban centers. Because cost of ICT is
still relatively high for most individuals, the cybercafe has
significantly improved accessibility to the Internet in
Nigeria
.
With the exclusivity period granted the 4 digital Mobile
GSM Operators ending in 2006, NCC is set to replace all existing
licenses including the five-year exclusive mobile licenses granted GSM
operators in February 2001 with Unified (Universal) licensing. Unified
licensing is expected to be technology neutral and is a move to further
open up and liberalize the sector in the interest of the consumers. The
new regime is expected to foster development of the sector, encourage a
level playing field, increase competition and ultimately reduce tariffs.
In addition to other efforts to serve the rural areas,
the federal government is currently embarking upon an expansive national
rural telephone project.
Computer
Education
Computer education in
Nigeria has come a long way since the foundation of the IBM African
Education Training Centre at the University of Ibadan in 1963 for the
training of computer personnel to operate, program, and, to a limited
extent, service IBM 1461/1620 machines. Today there are fully fledged
computer science departments in
Nigeria
universities and other tertiary institutions teaching a range of
subjects including computer science; software engineering; programming
and programming languages; numerical computations; and systems analysis.
Studies at these institutions lead to degrees or diplomas in computer
science. Computer education and training is also provided by private
institutions, polytechnics, training institutes, some vendors amongst
others. A lot of vendors and training institutes now offer certification
programmes to qualify as computer professionals.
In, addition the advent of cheaper access to the internet now
makes it easier to access training opportunities on the internet.
Cheaper
telecommunication costs has also made access to the Internet cheaper and
therefore commonplace. Cyber cafés now help provide access to the
Internet, whilst a few telecommunications companies also offer Internet
connection with telephone services.
Three categories of
institutions identified as providing Computer Education in
Nigeria
are:
1)
Tertiary institutions setup by statutes e.g. Universities,
Polytechnics, Colleges of Technology, Colleges of Education, etc
2)
Institutions that run professional computer education courses and
training for public exams and international certifications, e.g. CPN,
BCS, IDPM, International certifications developed by Microsoft, Cisco,
Hewlett Packard, Oracle, Sun Microsystems, etc.
3)
Institutions that run computer literacy programmes including
computer awareness, appreciation, computer utilization and use of
computer packages
For (1) and (2), of such
educational programs the aim is to produce professionals with expertise
in high demand areas such as Programming, Technical Support,
Engineering, Database, Information Warehousing, Networking, Web
Development, Research, Internet and E-Commerce. Since ICT is the
infrastructure of the Knowledge economy, such skilled professionals are
needed to create, operate, design, maintain, program and deploy
information and communication technology solutions.
In addition for (1),
Computer Science and Engineering graduates produced can be involved in
conducting hardware and software research and development.
For (3) the aim is to
produce improve the level of computer literacy of students and working
professionals irrespective of their course of studies or profession. The
Knowledge economy requires knowledge workers who are IT savvy.
ICT
Services Available in Educational and Research Institutes
In
most of the educational and research institutes visited, the ICT
infrastructures had just been
put in place. There had been computer systems available for so many
years but their use was limited to word processing. The ICT drive in
most of the educational and research institutes visited is on Internet
service provision. A lot of the institutes have achieved this using
government allocation, privately or internationally sourced funds and
grants.
All
the educational and research institutes visited had computing equipment,
such as computer systems, printers and scanners, while the provision of
Internet service in most of the institutes is a recent development.
Computers:
There
was a wide range of computing equipment available in the institutes.
Most
institutes had a mixture of branded and assembled computer systems. The
numbers of
laptops
in most institutes are very few. The computer–to–researcher ratio is
very low, about 2:1 in most of the institutes. This may be due to lack
of physical security at the educational and research institute or a low
priority of computing facilities on the institute’s lists of needs.
It
was also discovered that the computing needs of the administrative staff
have priority over that of research staff.
The
National Universities Commission (NUC) recently carried out (January –
March, 2005)
an
equipment audit, including computing equipment, of all federal
universities. Access to this information was to be made available on the
commission’s website. However, on enquiry the information is yet to
processed
Local
Area Network (LAN): Almost
all the institutes have a LAN, which is usually wired.
The
LAN may be restricted to the resource room, the library or the main
building of the institute
e.g. NIHORT, NACETEM, FIIRO. The LAN at NIPRD consists of several LANs
in different buildings joined together by a wireless link. All the LANs
are based on the 10/100 Mbps Ethernet technology.
Regulatory and
Professional Activities
National IT
Development Agency (NITDA)
National IT Development
Agency (NITDA) is responsible for the implementation of the National ICT
policy and the facilitation of the use of ICT as a tool for national
development. However, NITDA has been hampered by a lack of legislative
backing which they secured only in December 2006, which has
limited its effectiveness, coupled with the lack of human and
financial resources to facilitate its work.
REPORT ON
THE NATIONAL ICT STRATEGIC ACTION PLAN
“The Nigerian National
Strategic Action Plan is in line with the implementation of the approved
Plan of Action of the
Geneva
phase of the WSIS. Member countries that have existing ICT policy are
expected to develop corresponding e-Strategies on who does what amongst
all stakeholders in implementing the policy. The Strategic Action Plan
document will serve as a road map on how the National Information
Technology System will be upgraded and used in addressing several
development issues such as:
• Bridging the Digital Divide by
encouraging Investment in Information and Communications Technology.
• Using ICT as a tool for a wide
range of applications, such as remote sensing, environmental,
agricultural and Infrastructural planning.
• Identifying and exploring
opportunities for trade, investment and finance.
• Helping in the fight against
illiteracy and embarking on programmes to improve the state of health
and Educational sectors.
• Encouraging Identification and
pursuit of areas of research and required development, amongst others.
The National committee has been
divided into sub-groups as follows:
i) Human resource
ii) Research and Development (R &
D)
iii) Infrastructure
iv) ICT in Education
v) National Security and Law
Enforcement
vi) Legislature and Governance
vii) IT popularization and deployment
in Communities
viii) Private sector development
• Trade and commerce
• Tourism
• Service sector
• Industrial sector development
• Local and foreign Direct Investment
• SMEs
ix) Legal and Regulatory framework
x) ICT in Health
xi) ICT in Agriculture
xii) eGovernment
The United Nations Economic
Commission for Africa (ECA) is supporting NITDA in drawing up the plan.
In addition to the recruitment of an international resource person to
facilitate the group committee work, financial assistance is being
received from ECA.
In all, several meetings have
been held both at the general and sub-committee levels. At the
sub-committee level, relevant stakeholders have been identified
especially for questionnaire administration, focus group discussion and
general input to produce an all inclusive and generally acceptable plan
of action for implementation at the national level. The resource persons
are also working hard to meet up the new deadline November 2006. The
work has reached 75% completion.”
NITDA should do everything within
its powers to publish this plan for Nigerians to see. It would help
integrate man of the initiatives currently being developed in the
country in a coherent manner.
Prof Cleopas Angaye is
the current CEO of NITDA located at
Portharcourt Crescent
, Off Gimbiya Street, Garki,
Abuja
. www.nitda.gov.ng
Nigerian
Communications Commission (NCC)
Nigerian Communications
Commission (NCC) is the regulatory body for
Nigeria
's telecom sector. NCC issues licenses to private telecom companies
providing a variety of telecom services to the Nigerian populace.
According to NCC,
deregulated telecommunications services include:
"Sales and
Installation of Terminal equipment (Mobile Cellular Phones, Satellite
Communication and Switching equipments etc); Public Payphone Services;
Internet Services; Prepaid Calling Card Services; Community Telephony
wth exchanges; Paging Services; Trunk and 2-Way Radio Network Services;
Fixed Telephony Siervices, employing cable and Radio; Satellite Network
Services (e.g. Domestic VSAT networks); Repairs & Maintenance of
telecommunications facilities; Cabling services; Tele-Centers/Cyber
Cafes".
Dr Ernest Ndukwe is the
current CEO/ Executive Vice Chairman. NCC is located at it new
headquarters opposite the Transcorp Hilton Hotel. See www.ncc.com.ng
Professional
Associations
The first professional
computer body in
Nigeria
was the Computer Association of Nigeria (CAN), established in 1980.
Sectoral and National bodies now exist to take care of the
interest of different players in the sector. Prominent amongst
them are the Computer Society of Nigeria (NCS), Nigeria Internet Group
(NIG), Computer Vendors Association of Nigeria amongst others.
Nigeria Computer Society
is the premier member association responsible for the advancement of
Computer Science and Technology, Computer Applications and Professionals
Practice.
The Computer
Professionals Registration Council of Nigeria (CPN), established by
Decree 49 of 1993 is responsible for the control and supervision of the
Computing Profession in the country. CPN has responsibilities amongst
others for the accreditation of Computer Training institutions, courses
and programmes.
However, most Computer
training institutions and programmes operated and run in
Nigeria
are presently not accredited by the CPN.
- The Institute of
Software Practitioners of Nigeria (ISPON) is a nonprofit organization
specifically set up to facilitate business and trade in software and
related services in
Nigeria
.
- The Association of
Telecom Companies of Nigeria (ATCON) is the umbrella organization of all
telecommunications companies operating in
Nigeria
.
Non-Governmental
Associations (NGOs)
ICT4D in
Nigeria
is largely driven by Non-State Actors, who with little resources have
made substantial impact at local and international levels promoting the
emergence of an information society. Some of the leading ones include:
Development
Information Network (DevNet)
DevNet started the ICT4D
campaign when she collaborated with the British Council and WangoNet to
form the Nigerian Network on ICT. This platform was used to facilitate a
national educational project that culminated in a National Conference on
Nigerian IT Policy. DevNet also facilitated contributions of NGOs to the
WSIS (
Geneva
) and Tunis Phases. DevNet is a member of the National ICT Strategic
Plan Committee and also is a member of ACSIS-African network of NGOS in
the Information Society. Since 2004 DevNet has published 12 publications
as part of promoting the information Society in
Nigeria
. A yearlong Television and Radio programme highlighting the information
society ended in February 2007. See Appendix for a full list of
publications. Contact Bankole Olubamise, 7,
Adesoye Street
,
Mende
,
Maryland
,
Lagos
,
Nigeria
.
Lagos Digital Village/Nigerian
WSIS Youth Caucus-facilitated by the young former IT Ambassador
Gbenga Sessan has contributed immensely in promoting youth in ICT4D. At
WSIS Tunis, they collaborated with NYIN, Schoolnet Africa, Paradigm
Initiative Network and Nigerian WSIS Youth Caucus to put up a most
scintillating performance on youth and ICT in
Nigeria
. Their publication Global Process, Local Reality: Nigerian Youth
lead action in the Information Society is a seminal contribution
on the efforts of youth in promoting the information society.
Fantsuam Foundation;
led by the affable Dr John Dada, this is
Nigeria
model Rural Based ICT4D initiative. The Award winning foundation is a
Cisco training center, microfinance and empowerment center for over 3500
women in Kafanchan,
Kaduna State
Nigeria
. Dr Dada recently collaborated with
Lagos
Digital
Village
and Coseo Limited to launch the Nigerian Telecentre Network to
facilitate Telecentre initiatives in Nigeria See www.fantsuam.org
The Nigeria Internet
Group (NIG) is a non-governmental organization promoting and
facilitating full Internet connectivity in
Nigeria
. It has recently launched a campaign to use the internet to create over
20,000 jobs through the Internet for Jobs initiative.
Centre
for Information Technology and Development (CITAD) Founded
with a vision to
use information and Communication Technologies for the development of
society. The organization works under five semi-autonomous
projects. These are the Computer Literacy Project (CLP), the SchoolNet
Project (SnP), the Community Access Network (CAN), the Trade in ICTs
Monitor (TIM) and the ICTs Research and Adaptation Programme (ITRAP).
The method of work includes training, seminars and workshops, research,
advocacy and publication.
Contact : Y. Z. Ya’u Flat
3, First Floor,
Zumuchi
Stores
Building
,
BUK Road
, Kofar Kabuga,
Kano
P. O. Box 10201
,
Kano
Yunusayau@hotmail.com
Further details about
NGOs active in ICT4D contact devnet@devnetnigeria.org
c. The
Private Sector in
Nigeria
: An Overview
Nigeria
is the second largest economy in sub-Sahara after
South Africa
. It is the tenth largest producer of crude oil in the world at
2.1million barrels per day. It also has enormous natural gas reserves, vast agricultural
lands, natural resources and a dynamic private sector.
The
private sector in
Nigeria
was largely dominated by foreign brands until the indigenization decree
in the 1970 made it possible for Nigerians to own businesses. It has
since grown to become the engine of the Nigerian economy. Largely
dominated by the Oil industry, which contributes over 80% of National
Income, Agriculture and trade/commerce play a role. Industry and
Banking, now seems to be on the upward swing, especially with the
consolidation process which will produce about 25 globally competitive
banks. Other major players include the service industry, trade and
commerce. SME’s also
provide a sufficient level of activity to be relevant, though support is
virtually nil.
Small and Medium Enterprises
A Nigerian Bank for Industry (BOI) was set up
by the government to meet the financing needs of local manufacturers and
small and medium scale industries (SMEs). In addition, in its Monetary
Policy the CBN in 2001 mandated banks to set aside 10 percent of their
gross profit towards financing SME projects through the Small Medium
Industries Equity Investment Scheme (SMIEIS). Under this scheme, the CBN
makes available loans, channeled through selected banks to small
enterprises, such as farmers, at a rate lower than prevailing commercial
rates. All banks operating in
Nigeria
are required to deposit 10 percent of their profit after tax to fund
SMIEIS loan programs.
Furthermore, the Small and Medium Enterprises
Development Agency of Nigeria (SMEDAN) was established by the SMEDAN Act
of 2003 to promote the development of Micro, Small and Medium
Enterprises (MSME) sector of the Nigerian Economy. There is also an
Association of Small Scale Industry (NASSI) that represents the
interests of SMEs operating within the economy.
The largest investment in SMEs has been in the ICT sector, with the
popular
Lagos
Computer
Village
a manifestation of the growing ICT industry in
Nigeria
. It is estimated the turnover of the
Lagos
Computer
Village
is in excess of $50Million per annum. A Testimony to the growth of small
scale ICT industries.
Agriculture
In 1960s, agriculture was the most important sector in
Nigeria
in terms of its contribution to domestic production, employment and
foreign exchange earnings. However as from the mid to late 1970s Oil
became the principal foreign exchange earner.
Agriculture however employs over two thirds of the population, and
accounts for a third of the GDP. Nigerian agriculture is characterized
by its product diversity - tree and food crops, forestry, livestock and
fishing. However, the agricultural sector is not very efficient as
Nigeria
still imports much of its foodstuffs.
Traditional
Industry and Manufacturing
There are different types of manufacturing industries in
Nigeria
. Industrial outputs vary from industry to industry - manufacture of
food products and Beverages, Tobacco, Textile products, Electrical
Equipment, Vehicle Assembly, Building materials, petroleum/chemical
products, Paper conversion, Weaving apparel, Tanning and Dressing of
leather and recycling.
Nigeria’s manufacturing capacity utilization still remains very low due
primarily to the high costs of production owing to the poor state of
infrastructure such as power generation and water supply Most
depend on generating sets for reliable power supply..
Although buy-Nigeria campaigns have been launched, demand for local
manufactured goods is quite low compared to cheaper imported products.
Manufacturers Association of Nigeria (MAN) is a national industrial
association serving and representing nearly 2000 companies in private
and public sectors in manufacturing, construction and service sectors of
the national economy.
There is renewed focus on local sourcing of raw materials, and a need for
the manufacturing industry to become more globally competitive. Export
of manufactured good isn’t really significant at present.
Oil & Gas
Nigeria
is the world's sixth largest oil exporter and the leader in oil exports
in sub-Saharan
Africa
. Thus petroleum production and export play a dominant role in
Nigeria
's economy and account for about 90% of her gross earnings. The oil and
gas industry is the most important private sector group in the economy
of
Nigeria
. The Shell Petroleum Development Company of Nigeria Ltd (SPDC), is the
oldest and largest of the oil and gas companies operating in
Nigeria
.
The dominant role of Oil has pushed agriculture, the traditional mainstay
of the economy, from the early fifties and sixties, to the background.
Since the 1970s, it has become heavily dependent on earnings from oil,
which account for more than half of Federal Government revenue and over
90% of export earnings..
The Nigerian National Petroleum Company (NNPC) is responsible for upstream
and downstream development, which entails exploiting, refining, and
marketing
Nigeria
’s crude oil.
Besides oil,
Nigeria
had substantial reserves of natural gas.
Nigeria
is marketing liquefied natural gas (LNG) (instead of flaring gas
produced in the oil fields). Nigeria Liquefied Natural Gas Limited (NLNG)
is jointly owned by the
Nigerian National Petroleum Corporation (49%), Shell (25.6%), Total LNG
Nigeria Limited (15%) and ENI (10.4%). NLNG was created to harness
Nigeria
's vast natural gas resources and produce Liquefied Natural Gas (LNG)
for export.
Major oil companies exploring oil resources in
Nigeria
are Shell, Chevron, Mobil, Agip, Elf
Aquitaine
, Phillips, Texaco, and
Ashland
.
The relationship of the companies and the Government with local
communities in the Niger Delta region is still a troubled one.
Inter-ethnic clashes, community strife, vandalism, hostage takings, and
the rise of other criminal activity clearly highlight the tension in the
area.
Finance
The
Nigerian financial system comprises bank and non-bank financial
institutions which are regulated by the Federal Ministry of Finance (FMF),
Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC),
Securities and Exchange Commission (SEC), National Insurance Commission
(NIC), Federal Mortgage Bank of Nigeria (FMBN), and the National Board
for Community Banks (NBCB).
The CBN is the apex
regulatory authority of the financial system. In 2005, CBN gave the
banks 18 months to recapitalize the minimum paid-up capital for banks
from N2 billion to N25 billion and at the end of the day only 25 banks
were able to meet this target. A major component and source of
investment drive for the 25 recapitalized banks is the synchronization
of their computer networks. All the Banks now offer real time online
transactions, Automatic Teller Machine (ATM) services and even online
internet and mobile banking. Most of them have also migrated to new
banking software platforms.
Following the successful
conclusion of the banking industry consolidation / recapitalization
exercise in the banking industry, the National Insurance Commission of
Nigeria (NAICOM) is also carrying out a reform of
Nigeria
’s insurance industry. Insurance companies in the country must
recapitalize by
February 28, 2007
. Life insurance companies are required to recapitalize to a minimum of
N2 billion while non-life insurance companies will have a minimum
paid-up capital of N3 billion. Each insurance company will also be
required to have a
functional Information Technology Centre in each of the 36 states of
federation. A key body in
Nigeria
’s insurance industry is the Nigerian Insurers Association (NIA).
The main institutions in
the capital market include the Securities and Exchange Commission (SEC),
which is at the apex and serves as the regulatory authority of the
market, the Nigerian Stock Exchange (LSE), the issuing houses and the
stock broking firms.
At present, there are
six branches of The Nigerian Stock Exchange. Clearing, Delivery and
Settlement: Clearing, Settlement and Delivery of transactions on The
Exchange are done electronically by the Central Securities Clearing
System Limited (CSCS), a subsidiary of The Stock Exchange. The Exchange
had since
June 2, 1987
, linked up with the Reuters Electronic Contributor System for online
global dissemination of stock market information - trading statistics,
All-Share Index, company investment ratios, and company news (financial
statements and corporate actions). In 1996 The Exchange launched its
Internet System (CAPNET) to provide access to key market information and
facilitate communication, by local and international participants in the
market, as well as subscribers to the system
include stockbrokers, quoted companies, issuing houses, etc,
The Current Reforms
The financial services
industry plays a critical role in the socio-economic development in any
society. The current reforms in the finance industry aim to strengthen
the operators for global competitiveness and for better performance.
Financial services are improving in
Nigeria
. But in addition to low capitalization, there is a great need to
address issues such as lack of innovation, poor public perception, low
level of IT leverage, poor national finance culture, (savings,
insurance), limited capacity (human and financial), poor research and
development, lack of innovative products and unethical business
practices.
Development Finance Institutions
The Bank of Industry (BOI)
is a product of the merger of three development financial institutions.
They are: the Nigerian Bank of Commerce and Industry (NBCI), the
Nigerian Industrial Development Bank (NIDB) and the National Economic
Reconstruction Fund (NERFUND). BOI was created in January 2000. BOI’s
mission is to “transform
Nigeria
's industrial sector and integrate it into the global economy by
providing financial and business support services to existing and new
industries in order to attain modern capabilities to produce goods that
are competitive in both domestic and external markets.”
Other Financial
institutions and funds operating in
Nigeria
’s financial system are Finance and investment companies, Bureaux de
change operators (Banks also offer this service), Primary mortgage
institutions and the Nigerian Social Insurance Trust Fund (NSITF). The
Pension reform law of 2004 also established a contributory pension
system for the country and though in its early stages has attracted a
lot of investment in ICTs. 12 Pension Fund Managers have been
licensed-some of them a merger of the Pension Fund Managers of various
banks and insurance agencies. These companies have also made substantial
investments in ICT, especially online pension services.
Privatization
Privatization of state
enterprises by the Bureau of Public Enterprises (BPE) accelerated
between 2000 and 2006. Government enterprises in the following sectors
were privatized or scheduled for privatization:
Telecommunications,
Electricity ( Generation and Distribution), Petroleum Refining, Coal Bitumen Production (mining, Processing and Export) and
Tourism generation (Tour and Travel, Hospitality, etc). Many of these
companies have made huge investments in ICTs to enable them recommence
business.
Nitel, the government
owned former monolithic in the telecoms industry has been sold to
Transcorp- a special purpose vehicle for promoting
Nigeria
business.
Foreign Direct Investment (FDI)
In an effort to provide
an enabling environment for the inflow of Foreign Direct Investment (FDI),
the Federal Government of Nigeria has developed a package of incentives
for various sectors of the economy.
Since the private sector
is the engine of growth and the creator of wealth, government's major
responsibility is to provide the enabling environment for the private
investors to operate.
The Nigerian
government's policy of economic deregulation and liberalization has
opened up new windows of opportunity to all investors wishing to invest
in the country's economy. Nigerian Investment Promotion Commission (NIPC),
is an Agency of the Federal Government which mission
includes maximizing the value of domestic and foreign investment
resources. NIPC has the
responsibility to ensure the realization of the maximum benefits of the
policies of liberalization and deregulation of the national economy.
The lastest investment is the $400million paid by Mukadala for
the 5th GSM license. Most of the existing operators are also
angling for the new 3-G license that the NCC is about to auction with a
price tag of $150 million each!
Export
The
Nigerian Export Promotion Council (NEPC) is responsible for promoting
export development in
Nigeria
. There is an attempt to shift focus to non-oil exports, however, oil is
still
Nigeria
’s main export earner. Oil
still accounts for over 90% of export earnings.
Manufacturers
Association Of Nigeria Export Promotion Group (MANEG) is a Sectoral
Group of MAN, made of all the exporters of the Association from all the
Sectoral Groups.
It is the largest group
of manufacturing exporter companies in
Nigeria
with the largest non-oil exports of products manufactured in
Nigeria
.
The ICT industry has
witnessed export services since 2004 with the establishment of West
African operations of many Nigeria ICT firms such as Technology
Distributors, ZInox and Omatek Computers.
a. The
Framework for National ICT4D Development
The National development
program is based on a "private-sector" led and "market-
oriented" economy. This is based on the need to diversify the
economy away from its over-dependence on the capital-intensive oil
sector.
Measures taken have
included deregulation of fuel prices, privatization of the country's
four oil refineries, and instituted the National Economic Empowerment
Development Strategy (NEEDS). In November 2005,
Abuja
won Paris Club approval for a historic debt-relief deal that by March
2006 should eliminate $30 billion worth of
Nigeria
's total $37 billion external debt. The deal first requires that
Nigeria
repay roughly $12 billion in arrears to its bilateral creditors.
Nigeria
would then be allowed to buy back its remaining debt stock at a
discount.
The Federal Government
has put in place the National Economic, Empowerment and Development
Strategy (NEEDS). NEEDS is the instrument for poverty reduction in the
country.
The State and Local
Government counterparts of NEEDS are State and Local Government
Economic, Empowerment and Development Strategy (SEEDS /
LEEDS
).
The strategy lays
particular stress on four key actions: reforming the way government
works and its institutions; growing the private sector; implementing a
social charter for the people; and re-orientation of the people with an
enduring African value system.
NEEDS, in collaboration
with State SEEDS, constitutes a response to the challenges of
underdevelopment. The aim
is to mobilize people around the core values, principles and programmes
of both strategies.
After a long campaign by
the
Nigeria
authorities, in October 2005
Nigeria
and its Paris Club creditors reached an agreement that will see
Nigeria
's debt reduced by approximately 60%.
Nigeria
will use part of its oil windfall to pay the residual 40%. This deal
will free up at least $1 billion annually for poverty reduction
programmes.
2.
The National Development Strategy
a.
The Framework for National Development
The
National Economic Empowerment Development Programme (NEEDS) is the key
economic and social development framework of the current administration.
Released in 2004, it outlines the key development objectives of the
government over the next 3 years (2007) whilst anchoring the pivot of
the economy on the private sector.
b.
Challenges to Development Strategy / National ICT4D Plan.
The major
developmental challenges are the absence of the infrastructure for the
successful take off of the developmental aspiration of the government.
The private sector itself is still in infancy, there is hardly a
privately owned company that has the kind of experience the national
development strategy seeks to pursue. The Strategy itself came late in
the life of the government, and thus its implementation is still largely
uncoordinated, and without a clear definition of the goals. Furthermore,
there is the added problem of low capacity within existing governmental
infrastructure for the attainment
of the stated national development priorities. Thus, a Multi-Stakeholder
Partnership (MSP) is the government’s best bet in getting closer to their stated
developmental priorities.
The financial sector and
the oil and gas industry remain the leading users of information
technology in
Nigeria
.
Lack of Statistics -
There is a dearth of statistics on the ICT sector and the effect of ICT
on other sectors. Such information is critical for planning, policy
analysis and decision-making.
The role of Organized
Private Sector (OPS) in policy formulation is still minimal and mainly
reactive.
Most of the economy is
in the informal sector. Inflation has been a problem hindering growth.
A solid enabling
environment needs to be created - Economic activity is still plagued by
generally poor infrastructure, including roads, inferior public
transportation, gasoline and water shortages, electricity outages,
widespread fraud and corruption, and public health crises.
Infrastructure, is poor and inadequate - power supply is epileptic, not
made much progress in creating a solid enabling environment.
Human capacity needs to
be developed to meet the challenges of the Knowledge Economy. There
needs to be consistency in economic decision making.
Increased dependence on
imports and lack of growth in the non-oil sector indicates that there is
still an urgent need to diversify the Nigerian economy – SMEs,
traditional manufacturers need to perform better and be globally
competitive.
Nigeria
is one of the few nations in the world blessed with abundant mineral
wealth, an entrepreneurial population and a productive agricultural
base. By virtue of its
size, population, location it is well positioned to be hub or economic
activities in
Africa
. ICT is an opportunity to use the private sector to drive economic
development and bridge the digital divide.
Emerging Initiatives
UNIVERSAL
SERVICE PROVISION FUND
Pursuant
to Chapter VII, Part IV, of the Communications Act of 2003, the Federal
Government of Nigeria established a Universal Service Provision Fund (USPF)
to facilitate rapid achievement of national policy goals for
universal access to telecommunications, information and communication
technologies (ICTs).
Mission
:
To achieve universal access, universal coverage and
universal service through a public-private partnership framework that
stimulates economic and social development, private sector investment
and market-based provision of basic affordable and quality ICT
infrastructure and services to unserved and underserved areas,
communities and populations.
The
Fund will seek to contribute to national economic and social development
by enhancing the universal accessibility and availability of
telecommunications and ICT infrastructure and services to all,
particularly to rural residents, and socially and physically
disadvantaged populations. The Fund will also promote technological
innovation and competition in ICT service delivery in rural areas;
support the establishment of efficient, self-sustaining, market-oriented
businesses, including cooperatives, which will continue to expand access
to ICTs on their own initiative, requiring the minimum amounts of short-
and long-term Fund support possible as well as ensure effective
utilization of funds to leverage investments in rural communications.
•
Strategies and mechanisms for extending access to rural and underserved
areas of
Nigeria
.
• Criteria and modalities for eligibility to access the fund
• Type of Projects to be funded
• Appropriate technology for service provisioning in rural
and underserved areas.
• Micro-financing mechanism
• Tariff and Interconnection for rural areas
• Affordability and sustainability concerns of ICT services
provisioning for rural areas
• Alternate Power Sources
• Research and Development.
USPF Projects will be categorised in the following manner:
- Category
A: Projects that require less than NGN 50 million in USPF Subsidies.
- Category
B: Projects that require between NGN 50 million and NGN 200 million
in USPF Subsidies.
- Category
C: Projects that require between NGN 200 million and NGN500million
in USPF Subsidies.
- Category
D: Projects that require more than NGN 500 million in USPF
subsidies.
- Pilot
Projects: Pilots will be executed for projects that test out new
models, approaches or technologies.
DIGITAL SOLIDARITY FUND
THE
DIGITAL SOLIDARITY CHARTER
In
a spirit of digital solidarity, the Charter affirms the following
principles, objectives and commitment :
THE
PRINCIPLES
To
build democratic, fair, participatory and pacific societies, reduce
poverty and disparities
- the
information society should give all individuals the means to ensure
their physical, mental and intellectual development, a better
quality of life and the opportunity to fully tap their potential,
- the
information society should contribute to economic and social justice
and enable communities at all levels, wherever they are in the
world, to guarantee Human rights and fundamental freedoms. It should
help to attain the objectives contained in the Millennium
Declaration.
To
access education, health and employment
- the
information society should provide all individuals with free access
to infrastructure, tools and content required for them to flourish,
work, produce, communicate, access learning, transmit and develop
their knowledge.
To
contribute to the development of humanity’s heritage and enrich
cultural diversity
- the
information society should, with respect for cultural diversity,
ensure the transmission to future generations of values, traditions
and institutions that contribute to the long-term prosperity of
human communities, while seeking to revitalise them so as to better
manage the new challenges of globalisation.
To
develop good relations and promote social integration with respect for
nature and natural resources
- the
use of ICTs should contribute to better relations and a greater
security between people and between populations, and promote social,
cultural and economic integration while taking full advantage of the
diasporas,
- the
development of ICTs should be compatible with the ecological
management of natural resources, particularly natural, non-renewable
resources and help respect the natural balances required for a good
quality of life for citizens.
The
freedom of action of every individual in a caring information society
should also take account of the needs of future generations.
THE
OBJECTIVES
The
Digital Solidarity Fund will devote all its efforts and all its
resources to supporting these principles with the following objectives :
- provide
an equitable and affordable access to ICTs and their content for
everyone, especially the marginalised, such as women, the disabled,
the elderly, indigenous populations and the poor in urban and rural
areas, with a special effort devoted to the most disadvantaged
countries and communities;
- promote
such access as a fundamental right, and to do so both at public and
private sector level, independently of market fluctuations, growth
and issues of profitability with respect for a socially, culturally,
economically, financially and ecologically sustainable information
society;
- guarantee
everyone access to information and knowledge to contribute to the
autonomy and personal development of every individual and to
strengthen the commitment of local communities at the social,
political, economic and cultural level ;
- effectively
reduce economic, social and cultural inequalities between the
info-rich and the info-poor through the identification and
mobilisation of resources resulting from new financing mechanisms.
THE
COMMITMENT TO DIGITAL SOLIDARITY
Recognizing
that globalization and the emergence of the information society calls
for new forms of solidarity between citizens, private organisations and
the public authorities, nation States, local authorities and private
companies who approve these principles undertake, on a voluntary basis,
to reduce the digital inequalities between the info-rich and the
info-poor by devoting effective and identifiable resources to digital
solidarity.
This
commitment is aimed at people, companies, associations, institutions and
national and international organisations and the public authorities. It
can assume two forms:
- public
authorities (local and national) commit to include in their
public bids for ICT (hardware, software and services), a clause for
digital solidarity which stipulates that the company who wins the
contract must make a contribution of at least one percent of the
amount of the transaction to the Digital Solidarity Fund (in
accordance with the « Geneva principle »1)
;
- as
an alternative, public authorities (local and national)
commit to donate an amount of at least one percent of their budgets
earmarked for the purchase of ICT materials and services directly to
the Digital Solidarity Fund.
A
commitment similar to that undertaken by public authorities can be
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