While Nigeria gradually moves down the path of diversifying its economy from oil, the federal government is seeking to reduce the level of foreign dominance in the nation’s fledging Information Communications Technology (ICT) market, industry observers say.
Plans are already in motion to ensure that Nigeria, Africa’s largest economy by GDP, produces 25 indigenous and sustainable software companies by 2017, the ministry of communications technology, has confirmed. This however represents one in a series of high-powered initiatives specifically geared towards increasing local participation in the ICT industry.
The modalities for the realisation of this agenda are currently been ironed out, but market observers are of the view that developing competitive alternatives is easier said than done. According to them, there is still widespread scepticism about the competence and talent of local software developers.
“It is a mind-set that was genuinely developed based on encounters and experiences. But, not all local software developers are lazy and incompetent,” said Segun Akano, managing director, UpperLink Nigeria Limited, an indigenous software development firm.
According to him, many local developers are making massive investments in international certifications and partnerships in an attempt to put their solutions in pole position to compete with their counterparts in other parts of the world.
“The government is also driving series of initiatives to support technology entrepreneurs. In the next two years, Nigerian and foreign businesses will have a different mindset about local software developers”, said Akano, in an interview with BusinessDay.
The imminent launch of the Nigerian Content Agenda by government, will also play a massive role in building the local Information Technology (IT) industry.
According to the National Office for Technology Acquisition and Promotions (NOTAP), Nigeria has lost approximately $1bn to foreign software imports and maintenance contracts on an annual basis over recent years.
Large scale buyers of foreign software include companies in most of Nigeria’s major industries, including banks and financial services, manufacturing, oil and gas, telecommunications, ministries and the ICT industry itself, which relies almost entirely on foreign operating systems.
“We are all consumers when it comes to the local software market. Everything is imported,” Emmanuel Bamiyor Iwegbu, managing director of ICT Convergence, a local technology solutions company. Omobola Johnson, minister of communications technology, said, in a paper presentation, that about 300 Nigerian firms play at the fringes of the ICT industry despite its robustness and largeness.
The sector is still largely dominated by multinationals, “which is actually not bad. But to further deepen the industry, there is need to build successful local businesses.” The minister observed that Nigerian firms needed to be more capitalised in order to compete favourably in the global market, dominated by the likes of Google; Oracle; SAP, etc.
She further added the ministry has created guidelines that would support the growth of local firms in the ICT sector including, accelerating the demand for local ICT products; ensuring procurements through local firms and partnership with multinational ICT firms.
Nigerian software sector loses about $360m yearly as capital flight.
Foreign manufacturers also supply most of the ICT-related hardware that is purchased in Nigeria.
As at mid-2013, foreign firms accounted for around 70 percent of the PC market and 100 percent of the handset market.
The government has introduced various ICT-focused initiatives in recent years. In April 2013, the ministry of communications technology, in conjunction with the National Information Development Agency (NITDA) and private sector players, launched the Information Technology Developers Entrepreneurship Accelerator (iDEA) programme, which aims to identify Nigerian ICT enterpreneurs and help them establish successful businesses.
iDEA centre focus on software development, and particularly mobile apps, enterprise solutions and software related to linguistics, education and Business Intelligence (BI).
Individuals admitted to the iDEA programme will be given better access to capital, training, mentorship programmes, business advisory services, shared tools, facilities, and if necessary work space. Only last week, Nigeria presented 14 start-ups for this year’s DEMO Africa, targeted also at creating big businesses out of the country’s ICT sector.
Ben Uzor
