FG should adopt, implement local content bill, in ICT sector-Teniola
Mr Olusola Teniola is the President Association of Telecommunications Companies of Nigeria (ATCON). He spoke with selected journalists during a media parley in Lagos concerning the intrigues in the ICT industry, the advocacy role of ATCON and other sundry issues. Tony Nwakaegho was there for Daily Times. Excerpts:
Could you lead us into ICT industry with your experiences since you assumed the leadership of ATCON?
It is six months now that I had my first briefing on my assumption of office. This industry is going through some transition and it is the only industry that has been recognized by government and other stakeholders both nationally and internationally that ICT in Nigeria is very critical sector. What I mean by critical is that we know we are in recession and government is struggling to balance its budget so they are looking to sectors that will get ourselves out of recession. Some people may have written and read what the CBN Governor said about the monetary policy, that he has used every tool. Why is it that everywhere we go whether to the Senate Presidency, National Assembly, speaking to the Ministry or the regulator, they are now pointing to the ICT. And the last one pointing to the ICT as the panacea to all our problems is NITDA. So it pose a lot of responsibility on the shoulders of ATCON, because we now need to sit down and recoup how we can assist Nigerians and including the government to take ourselves out of recession. I read a lot of things in the paper and all they talk about is the problems and not the solutions.
The Senate President during our visit said that the Nigerian government of the legislators is not going to do anything that will negate the increase contribution that ICT, especially telecom is making to our GDP. Unfortunately with that statement we must recognize the fact our GDP is not the same as it was in the past. We have a contraction. Q3 forecast of the GDP is another contraction. We have inflation at 80.7 percent. We cannot be sitting there and being comfortable because we are almost entering depression. We are still in recession and if we get into depression it is harder. Some of the tools we are seeking from government; government may say it is diversification of the economy. The Vice President, Yemi Osinbanjo at the recent eNigeria that I was involved in, mentioned that ICT is the fortune tow to diversify the economy. I agree with him, but diversification takes time. We can all take full measures; we know the minimum that you can get on the impact on diversification in the economy of our size which at the moment the GDP is about $520billion. Anything from 24 months to three years, but we have a problem now how do we solve the 2016 and 2017 gap, that is the federal budget. The only thing we have been pleading and pushing is the local content. We can’t afford to be making the same mistakes that we have been making in the past and expect change to happen. So government has a difficult situation on their hands, stagflation is there according to the CBN Governor, he has used all the tools on monetary policy but that is the era of fiscal policy that we need to explore. We need to now ensure that the goose that is laying the golden egg which is the ICT is not killed with excessive tax. It is a balancing act. All I know is that our members are ready to work with government to find an appropriate balance that will make sense not only to this industry but to every citizen. You cannot overtax citizens that are already seeing their wages now being obliterated just on inflation. Then you have the foreign exchange issue, our members right from the big mobile operators to the smallest operators find it difficult to import equipment to reach those same people that we want to tax. Because when you make that sector unattractive and the consumers are not able to make the necessary calls because there is no network coverage or increase or not able to extend the networks or you make the tariff expensive because they are not going to be borne by our members. It will be pushed to the consumers and it will not be at a percentage but it’s going to be at percentage plus cost to our members. They are not here as charity, they are here to make profit. If they cannot make profit here they will take their investment elsewhere. You cannot force people to stay in a country. You cannot force foreigners to stay in the Nigeria, the industry is foreign dependence. We can cry and do whatever; we do not work the equipment that is running this industry. You know now that you have no choice but to create the incentive to attract that foreign direct investment that will be used as an investment to increase and improve the networks that will enable employment. Because if it does, you will have higher youth unemployment, because you cannot layoff when you do not add jobs. Our visit to the Senate President was to plead that they should do something that will kill the real thing they are saying will diversify the economy. The suggestion that I made and it is a realistic suggestion that they should consider is that there should be 1 percent VAT increase across the board. When I say across the board it is not just on communication. You are talking of quality of service and you want to tax, it doesn’t make sense not only technically, but economically to apply that kind of thinking as a tool or a solution out of the quagmire is not going to work. We have to be realistic that the option that we presented, the VAT increase is probably the only option that makes realistic sense. If you keep on targeting the very industry that you are saying will take you out of recession, then I cannot see why we are not thinking of incentives in form of tax holidays, tax breaks, etc, not imposition of taxes.
What does ATCON want government to do to assist the industry?
Government should adopt the local content bill and the implementation that we have in the oil and gas sector in this ICT sector through the Office of the Nigerian Content for ICT, (ONC) which is part of NITDA. That will help to reduce the capital flight which has been recorded from 2billion plus 1 billion dollars that is associated with the software that is flying out of the country on annual basis. I say local content because it has been predicted that by 2019 the spent that Nigeria will make on foreign goods and property and services will be about a 170 billion plus, according to the new DG of NITDA. So we want members of ATCON to benefit from that because if you create local jobs it will benefit the government through the taxes generated. And that is fundamental to diversification to those relying on the extractive industries. The other thing that we want is that the government should not impose any more taxes to this industry.
ATCON is an advocacy body and we are here to protect our members’ investment and to encourage the government that they increase their investments. To date $68billion has been invested in this sector, and half of that is foreign based. One company out of the $64 billion contributed half of the $34 billion and that is significant. We want to encourage further investment because that is what it will take to build a national backbone network. We need this national backbone network so that we can have the services and platforms for the digital age. What changes are now going on in history is that the changes now are voice dependent revenue to data services. We have to create a broadband ecosystem that involves our members so that we can transit directly to the government ducts otherwise we will have a decline. There is nowhere in the world that they are using manual labour in certain sector, they are all digitalized.
What must be done to get this local content right?
Local Content is neither here nor there. Have you been able to articulate the skill and the type of software we have even as we don’t want foreign ones? We are only trying to play the catch-up by trying to assemble 2 billion phones and you say you don’t want to import anything is like working in a fool’s paradise. We should look for forum to be imbibing some of the foreign content. Nollywood is created by us, so why do we host Nollywood aboard and not bring them to our Data Centre here. We need application and content developers. Our youth are doing that right now. If you bring foreigners into the country to do certain jobs, the knowledge and the skill set needed should to be transferred within a specific time. We are only in sales and marketing and we need to stop dependency. NOTAP is already working a policy around it and we say implement it. We are surcharging ourselves when it comes to that by taking our money aboard and using it to employ foreigners there.
What are ATCON plans for 2017?
We are planning exhibition, conference and award event in Q1 2017. We will be more involved in the ICT 2016-2017 road map yet to be approved by Federal Executive Council. We will work with the regulator for members to have spectrum at affordable rate to assist in broadband penetration as we are getting close to 2018. ATCON members were honoured by the Senate for the first time and so they are aware of the issue we are facing in the nation, so we need to work with them to see the change mantra.
