Foreign software contributes to 80% revenue loss in Nigeria
Absence of local content policy has been attributed to 80 percent revenue loss from foreign software purchase for the country.
These dynamics of capital flight from foreign software purchase formed the interview sequence when Tony Nwakaegho met with Dr. Femi Adeluyi Assistant Chief Scientific Officer of NITDA who represented the Acting Director General NITDA, Dr Vincent Olutunji at the Tech+ 2016 in Lagos at an aside.
Adeluyi cited the Nigeria’s National Office for Technology Acquisition & Promotion (NOTAP) which evaluates and registers technology transfer agreements figures indicated that Nigeria spends $1billion annually for software imports, many of which have local substitutes.
According to him, the Nigerian Communications Commission (NCC) also revealed that about $4.8billion is spent annually to import 48 million phones.
While UNCTAD report, he stated also indicated the import-export imbalance that in 2012 as Nigeria imported $2 billion of ICT goods but only exported $5million and that leaves the country with an Export-Import Ratio of 1:400.
Again, Nigerian branded computers represents less than 8 percent of all computers bought in Nigeria.
Until recently, he stressed that 100 percent of the over 100 million smart cards (for SIM and ATMs) were imported.
Adeluyi stated that these and many more examples give NIT DA the motivation to use a Local Content Policy approach to stem the tide.
According to him, in March 2001 the Federal Executive Council approved the National Information Technology Policy, while NITDA was established in April 2001 to implement this Policy and the NITDA’s Act was passed in 2007.
NITDA coordinates the development of ICT in Nigeria and part of NITDA’s mandate is to serve as the clearing house for ICT in government.
NITDA’s initial approach to promoting local content, he revealed was focused on getting pronouncements from the Federal Executive Council in the form of Circulars and Directives.
He lamented that both achieved some degree of success, but they were short-lived, while it became obvious that a clear cut policy/guideline and an institutional approach was required to achieve longer lasting success.
“This led to NITDA establishing an Office of Nigerian Content (ONC) in 2015 which is similar to the Nigerian Content Development and Monitoring Board (NCDMB).However, while NCDMB focuses on the petroleum sector, ONC focuses on the ICT sector.
“ONC is a Special Purpose Vehicle (SPV) established as a sustainable institutional framework to enforce compliance with the regulatory Guidelines for Nigerian Content Development in ICT under the NITDA Act of 2007.”
He informed the Daily Times that what ONC is doing: “We want to ensure that our software will be at par with software produced outside the country. We want to be able to service our local industry as well as be able to export. We have the Indians exporting a lot of their soft wares and it is generating revenue for the government, we also want to do that for the government here. We have a young population that loves ICT so we want to take advantage of that.”
Commenting on the impact of the Original Equipment Manufacturers (OEMs) stakeholders meeting with ONC, Adeluyi said that there is actually a draft policy that they are working with, adding the ONC is discussing with them to ensure that they have support services, create the market for them as well as create the capacity for them.
On the other hand, he explained that the agency is working on creating the market for them in the sense that government establishments should patronize them, while they have to meet a certain standard failing which the agency will sanction them.
“I want to assure you that even though you have not seen the effect yet, you will see it very soon,” he added.
He pointed out that the enforcement of the policy has not taken effect yet because the agency is still educating them about it, but the enforcement will start when the Agency has started the implementation of government establishments buying from them.
