Danbatta: Digital Transformation Key to Nigeria’s Development
The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Professor Umar Garba Danbatta, spoke on Nigeria’s participation at the International Telecommunication Union Telecom World conference in Durban, South Africa and how Nigeria intends to drive her digital transformation, using modern technologies. Emma Okonji who attended the world conference, presents the excerpts:
Nigerian delegation led by the Permanent Secretary, Ministry of Communication, Mrs. Nkechi Ejele, attended this year’s International Telecommunication Union (ITU) Telecom World conference in Durban, South Africa, which attracted global participation. What necessitated Nigeria’s attendance? Nigeria participated in this year’s ITU Telecom World conference in Durban, South Africa to explore policies, technologies and innovations that can lead to a smarter Nigeria and assist in transforming our country, including the different sectors of the Nigerian economy like the telecoms sector. We want to see how we as a nation can use the policies, technologies and innovations that were displayed at the conference to transform our industries and organisations. We plan to apply the knowledge gained from the conference on the telecoms sector and other sectors, in order to enhance Nigeria’s smart city initiative. NCC for instance, sponsored some Nigerian startups to this year’s ITU Telecom World conference who are the future technology disrupters, to showcase their solutions and talents to the world. Last year, at the ITU Telecom World conference in South Korea, NCC also sponsored some of them and they were able to impress international audience with their solutions and they returned with international awards, just like this year.
NCC has been at the forefront of wooing foreign investors to invest in Nigeria, especially in the telecoms sector of the country. What is government doing to attract these investors through tax incentives? The Economic Recovery and Growth Plan (ERGP) document of the federal government clearly shows government willingness to create the enabling business environment for investors to thrive in Nigeria. For example, in the ERGP document, there is a pioneer status given to investors who are coming in to invest in any sector of the economy, including the telecoms sector. The pioneer status incentive is 30 per cent, which means a reduction of Company Income Tax by as much as 30 per cent. This is in addition to other incentives like the relaxation of monetary policy of the federal government, access to foreign exchange, physical policy, reduction and waivers on custom duties, among others like the Executive Orders 5 and 6 of the ease of doing business.
All these are measures put in place by the federal government to make business in Nigeria very easy and profitable for willing investors, and we at NCC will continue to encourage investors to come to Nigeria and invest in the telecoms sector, and our efforts are beginning to yield good results. The telecoms space is big enough to accommodate more investors and we will continue to encourage Foreign Direct investments in Nigeria.
Last year, NCC gave an update on telecoms investment in Nigeria, which was put at $70 billion. What is the current investment figure and the contribution of the telecoms sector to Nigeria’s Gross Domestic Product (GDP)?
I must make it clear that we get statistics about telecoms contribution to GDP from the National Bureau of Statistics (NBS). The figure we gave last year about telecoms investment in the country was $70 billion, and the figure was what the NBS released as at last year. Although the bureau has not released statistics for this year, but I can confidently say that the total telecoms investment in Nigeria has surpassed $70 billion. This is true, based on the reliable information we have that telecoms investments, which include foreign direct investment ( FDI) and portfolio investment, has currently reached 10.5 per cent, up from 9.15 per cent in the previous year. The NBS quarterly report puts the contribution of telecoms to GDP at $5 billion per quarter, which is 2 per cent rise per quarter. This of course is a steady quarterly growth and when you calculate the four quarters in the last one year after the $70 billion figure was released, it becomes clear that telecoms contribution to GDP has surpassed $70 billion in the last one year, and this is a significant contribution to the Nigerian economy. In the last one year, Nigeria recorded a steady growth in voice and data services offering, including broadband penetration and all these put together in monetary terms, clearly shows the immense contribution of the telecoms sector to the Nigerian economy.
What are some of the opportunities for additional foreign investors that may be interested in investing in the Nigeria’s telecoms sector? There are lots of opportunities for investors in the county’s digital transmission system including microwave, satellite and optic fibre, such as submarine cable communications, as well as digital exchanges for both wired and wireless lines. We also have investment opportunities in our billing systems and data communications networks, broadband and integrated service digital network (ISDN). Nigeria needed 120,000km metropolitan optic fibre coverage for ubiquitous network connections nationwide, but the country has only 38,000km coverage now, which I see as an investment opportunity beckoning on both foreign and local investors to take advantage of, and invest in the country.
NCC is intensely focused on bringing efficient, qualitative and affordable ICT platforms within the reach of individuals and corporate bodies through the implementation of our 8-point agenda, the Federal Government’s Economic Recovery and Growth Plan (ERGP) and the ICT Roadmap to drive synergies, which would expand opportunities for disruptive technology innovation and global competitiveness in Nigeria.
What are some of the regulatory measures taken by NCC to deepen broadband penetration in the country? Several regulatory measures have been put in place by the NCC to further grow broadband penetration in the country. The commission had earlier assigned 2.3GHz licence to Bitflux Consortium and six of the 14 slots available on 2.6GHz to MTN Nigeria and two slots to Openskys, and six slots are still available for assignment.
Nigeria had a mere five per cent broadband penetration in 2012 but now we have attained 22 per cent and hope to hit the 30 per cent recommended by National Broadband Plan by December 2018, through various initiatives including granting subsidies to Infrastructure Companies (InfraCos) licencees, and for spectrum trading. In line with our initiatives to encourage investment for InfraCos’ roll out, the commission created subsidy provisions in its 2017 and 2018 budgets for the InfraCos, which is expected to be disbursed by piecemeal to the InfraCos as the deployment of their infrastructure progresses. We have, however, assured all the licencees that the subsidy is based on the implementation and milestones of their rollout obligations
As part of the flexible approach to regulatory management and constant stakeholders’ engagement, the commission introduced spectrum trading only a few months ago. This is to enable holders of such spectrum that is not in use to transfer, lease or share such spectrum with those who may have a need for it. We see this as a cutting edge regulatory initiative to safeguard the use of this scarce national resource. The NCC undertook these regulatory steps in line with the National Broadband Plan (NBP) of 2013-2018, where it is anticipated that 30 per cent broadband penetration will be attained by the end of 2018.
At the opening ceremony of the ITU Telecom World 2018, the President of South Africa, Mr. Cyril Ramaphosa highlighted three pillars on which his country is driving digital transformation. What are the strategies for Nigeria in driving her digital transformation? Yes, I heard clearly, the South African president’s speech at the opening ceremony of ITU Telecom World 2018 conference, when he listed the three pillars on which his country is driving digital transformation, to include Women, Youths and SMEs. The truth is that every county has its own strategy and I subscribe to the position of his Excellency, President Cyril Ramaphosa of South Africa on the country’s drive in digital transformation for a digital economy. The Nigerian strategy is similar to the South African strategy as enumerated by their president, but we have additional strategies beyond that of South Africa.
In Nigeria, we have identified about five strategies of the digital ecosystem, but to successfully achieve these strategies in Nigeria, we need government enabling polices and the right institutions that will enhance digital transformation in Nigeria, because digital transformation is key to Nigeria’s development. As part of the Nigerian strategy for digital transformation, we have considered the youths, women and SMEs in our policy. In all of these, the role of NCC in the digital transformation of the country is key and the NCC is currently giving access to telecommunication services in the underserved and unserved areas of the country, more so in a situation where only 50 per cent of Nigerian households have access to telecommunication services. Again we are
In Nigeria, we have identified about five strategies of the digital ecosystem, but to successfully achieve these strategies in Nigeria, we need government enabling polices and the right institutions that will enhance digital transformation in Nigeria, because digital transformation is key to Nigeria’s development. As part of the Nigerian strategy for digital transformation, we have considered the youths, women and SMEs in our policy