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Workshop examines impact of liberalisation on ICT business

Scholars from diverse academic disciplines assembled at the conference hall of Faculty of Social Sciences, University of Lagos to look at Information Communication Technology (ICT) and its impact on trade, goods services and funding dissemination.

With a population of over 140 million people, Nigeria is easily regarded as the most populous country in Africa.
About 42% of this population is below the age of 15 years, whilst about 3% is 65 years and above. An estimated growth rate of 2.02% was recorded in 2008. Adult illiteracy is estimated by a World Bank report to be 70%, while combined gross education enrollment is 52.3%, which compares favourably with similar metrics for other African countries.

Professor Ike Mowete, Department of Electrical/Electronic Engineering in a joint paper with Professor Tayo Fakiyese of the Department of Economics noted that when evaluated in terms of ICT development metrics published by the International Telecommunications Union (ITU), Nigeria’s performance is well below its status as a regional economic power. For example, the IDI for 2007 1.37, with sub-index measures of 0.31 for ‘access’, 0.23 for ‘use’ and 3.8 for ‘skills’.

Although these figures constitute improvements over those recorded for 2002, they do not reflect the fact that the country has a high adult literacy rate and one of the fastest growing telecommunications market in the world.”

In the report, they examined the characteristic features of the ICT services sector in the country, with the general objectives of identifying the extent to which the implementation of sector liberalization strategies have influenced the development of the private sector for ICT services.

Whereas by the turn of the millennium in 2000, Nigeria had only 400,000 connected telephone lines and 25,000 analog mobile lines by the end of October 2008, there were some 59 million lines, 57.6 of which were digital mobile lines to record a teledensity figure of 42 lines per 100 inhabitants.

In their presentation titled – “Characterization of the ICT Trade in Goods and services sector in Nigeria.”
Using tables and pictural descriptions, it was recalled that the process of liberalising the telecomm and ICT sector essentially began in 1992 when the NCC Act 1992 was signed into law by the Federal Government.

“That attempt cannot be said to have been successful, because by 1999, less than 1% of the country’s population had access to a telephone line. This failure of the NCC Act 1992, no doubt informed the provisions of the Nigerian Communications Act (NCA) 2003 which repealed the 1992 Act; and whose main objectives concerned the furtherance of the cause of liberalisation by instituting the ground rules for the systematic development and regulation of the telecommunications and ICT sector.”

Following the wake of that ACT’s becoming law in Nigeria, the NCC, as a sector regulator has licensed various categories of ICT providers.

As at the time of the report in July 2009, further improvements were recorded. Although teledensity decreased slightly from 48.04 in March to 47.98 in April, indications are that a steady increase will be recorded in the coming months to the extent that a figure of well over 50 should emerge at the end of the year.

As may be expected, GSM operators dominate the market with a share of 89% as against 9% for mobile CDMA and 2% for the combined fixed and fixed wireless operators.

“In the case of GSM operators, MTN has the largest share of the market (40.5%) followed by CETEL/Zain (30.2%) and GLO (28.1%) in that order. ETISALAT (EMTS), a new market entrant has already attracted 0.7% of the market share, while MTEL, an offshoot of NITEL (a then government monopoly) has only 0.5% of the market share.”
Contributions of telecommunications to the country’s GDP were highlighted.

Between 2001 and 2005, these contributions rose above the 0.2% (using 1990 current basic prices) market, but by 2006, a figure close to 1% was recorded; and this improved dramatically to about 1.2% in 2008. Over the same period, deployed infrastructure, which was mainly microwave in 2000 attracted significant contributions from fiber optic cables and base stations. Also, private investments, which stood at US $1,200m in 2001 increased ten-fold to US $12,000, in 2008.

According to the experts, one of the key fallouts of the liberalisation of the ICT sector is the increasing intensity of competition, which has seen many businesses diversifying into internet services provision market.

In particular, service providers are now liveraging new technologies to deliver services. Some of the major internet services providers listed also displayed types of technology utilised for service delivery.

“There are now well over 400 licensed ISPs operating in the country, with the result that Nigeria is now ranked second in Africa, next to Egypt. According to a publication of Internet World STATS, there were 10 million users of the internet (Egypt) 10.5) in Nigeria in 2008, as against the 147,000 users in 2002, representing 4,90% increase from  200 to 2008.

This gives an internet penetration of 6.8% which is larger than the average figure of 5.6% recorded for Africa as a continent.”

It was added that, 18.5% of internet users in Africa are resident in Nigeria as against 19.40% in Egypt and 8.5% in South Africa, whose ranking in this regard is 4th, next to Egypt, Nigeria and Morocco (12.2%) in that order.

The presention dwelt on general characteristics of businesses in the sector, activities of businesses, employment profiles, commercial performances, turnover, business targets, nature of competition, running costs, estimate of running costs, tax, liabilities, typ of taxes paid government grants/subsidy, subject to VAT, Bank loan/own means/external capital, imported goods, custom duties, etc.

Professor Peter Kogam, Department of Commercial and Industrial Law, University of Lagos, talked on “The Legal and Regulatory Framework of ICT in Nigeria” He described ICT as “any technology employed in collecting, storing, using or sending out information and includes those involving the use of computers or any other telecommunications system.”

He said that the opportunities brought about by the development in ICT require a strict legal and regulatory environment for proper coordination. The current status of ICT in Nigeria has been influenced by various policies, statutes and regulations.

He listed the laws and policy that apply in the industry to date as:

* Wireless Telegraphy Act of 1961 and its Regulations
* The Federal Republic of Nigeria National Telecommunications Policy
* The Nigerian Communications Act 2003

All these were exhaustively examined, reviewed and analysed in the presentation.
Concluding, Fogam said it is evident that ICT has and is still gaining importance in all areas of the Nigerian national development. Electronic transactions have almost completely replaced all others in virtually all aspects of life.
“Yet a total application of ICT in most developing countries is hindred by lack of a comprehensive legal and regulatory framework. Nigeria seems to have taken a bold leap forward going by the legal and regulatory measures on ground.

However, the ever changing nature of the ICT industry is such that it is difficult to imagine the challenges that these measures may face in future.

He added that much therefore may yet to be done to meet the future challenges. “Nevertheless, what exists today by way of the National Communications Policy and the Communications Act 2003 underscores the fact that a sustainable ICT industry in Nigeria needs an environment of trust created through a legal and regulatory apparatus.”


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