Stakeholders in Nigeria’s telecommunications industry have flagged the acute dollar shortage, limited capital, and the continuous devaluation of naira as constraints limiting the participation and growth of local investors in the industry.
This was discussed at the third edition of the Policy Implementation Assisted Forum (PIAFo) which focused on the national policy for the promotion of indigenous content in the Nigerian telecoms sector.
The forum, themed ‘Establishing Trackable Metrics for Developing Nigeria’s Indigenous Telecoms Sector’ centered on the travails of local investors and how they can be addressed.
Muyiwa Ogungboye, chief executive officer, Estream Networks LTD said the growth of the technology industry depends on the presence of local content which is also a key to nation-building and national development. He added that every developed country prioritized local content to attain its current status.
“Inclusive growth in this sector remains elusive as over the last decade we have seen the emergence of local players largely regional who have carved out a niche for themselves but have unfortunately fizzled out,” he said.
Ogungboye who was represented by Martins Akingba, chief operating officer, Estream Networks LTD mentioned that as of June 2022 The Nigerian Communications Commission (NCC) had licensed 756 Internet Service Providers (ISPs) however, only 188 (24.8 percent) of them were active.
“The type of investments Indigenous operators can do and their ability to raise the much-needed capital has a major role to play in their growth and this is a major reason local telecom operators tumble,” he said.
Akingba added that the volatility in the forex market has killed several telecom expansion projects because loans gotten in dollars have increased significantly when they should be serviced due to naira devaluation.
Omobayo Azeez, lead executive, PIAFo and managing editor, Business Metrics Nigeria, in his remarks said over the years, the telecommunications sector has become an indispensable economic enabler for the country however, it remains grossly dependent on foreign inputs which result in capital flights in excess of $2.16 billion.
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“When operators have to depend solely on foreign talents, solutions, equipment, and accessories, they will also have to deal with the hassle of accessing forex as one of the major problems,” he said.
Azeez added that this challenge is further worsened by the continuous devaluation of the Naira against the Dollar hence the policy needs to be promptly implemented to create inclusive benefits for individuals, businesses, and the economy.
Providing recommendations to improve the participation of local players in the industry, Akingba said policy makers and sector managers must implement policies that ensure local investors and entrepreneurs have incentives to invest, adding that the development of home-grown applications that drive business efficiency is crucial to growing local content for this industry.
Similarly, Chidi Ajuzie, group chief operating officer, WTES Projects limited said there are some key elements that must be employed in driving the national indigenous content program such as the procurement of local goods and services, local skills and capacity development, strategic partnership with local firms, development of local supply capabilities.
“In addition to this, there is a need to create an enabling environment by lowering the market-entry barriers to increase the participation of Nigerian companies and implementing a long-term strategy to strengthen the indigenous telecom SMEs,” he said.
