August 30, 2015

Closure of ChamsCity: Death of entrepreneurship, innovation

Closure of ChamsCity: Death of entrepreneurship, innovation

By Emeka Aginam

There appears to be growing concern among Nigerian entrepreneurs following lack of government effort to protect and support local capacities.

This development, according to recent findings has led to the closure of many of the local capacities as a result of lack of government encouragement of local efforts.

demolaCircular on patronage of local efforts

It would be recalled that a 2006 government circular signed by the former Secretary of the Federation, Chief Ufot Ekaette had directed all federal agencies and ministries at the federal and state levels to   patronize made in Nigeria software and locally assembled computers as a priority choice of applications for all their functions.

But the apparent truth, is that only   few PCs assemblers in Nigeria     survived the competitive market.

Meanwhile, government has always faulted the outsourcing of operations generated locally to foreign companies under the Business Process Outsourcing (BPO) arrangement.

According to the former minister of Communications Technology, Dr. Omobola Johnson, local companies in Nigeria have the capacities and skill manpower to handle outsourcing within and outside Nigeria, even though Nigeria is not regarded as a destination country for BPO.

Just recently, Chams Nigerian Plc announced the closure of all four ChamCities across the nation   due to the company’s   inability to consistently sustain the upkeep of the ultra-modern malls which housed the various equipment.

The closure of   the digital cities , it was learnt,   may not be unconnected   with the imbroglio of the Nigerian Identity Management Commission, NIMC, in revoking the concession agreement struck with Chams Plc for the National ID card project and instead, startlingly changing it into a contractual agreement with another set of firms, a situation which has badly affected Chams Plc through her subsidiary ChamsConsortium.

Meanwhile, the Guinness Book of World Records, had certified ChamsCity   as the only digital mall globally to have the largest number of PC’s in a single location with over 1000 fully networked PC’s, processing and enabling the activation of a wide range of activities simultaneously, a development   which positively portrayed Nigeria’s image on the world stage.

The sad story

According to the founding Group Managing Director, Chams Plc, Sir Demola Aladekomo   who was obviously very distraught   in an interview with Vanguard remarked that, “Today is a sad day for entrepreneurship and innovation as we close down ChamsCity at Ikeja that got Nigeria into the Guinness World Record because my government could not protect Chams Plc from the onslaught of the NIMC management. A nation that kills its own.”

Speaking on how corruption and vested interests killed the digital mall,   he said   that,   “Shareholders N9.2b wasted for pecuniary interests of converting a concession to contracts. May God help Nigeria. We tried, we begged, we did our best to protect a Concession we won after a major international tender process.”

Establishment of ChamsCity

He disclosed that   ChamsCity was established to handle multiple challenges associated with the substantial registration of Nigerians in the National ID card project.

Chams aspirations for the ICT hub

The IT guru who is passionate about entrepreneurship further   said Chams aspirations for the world-class ICT hub was for it to exist beyond the ID card project, offering government agencies, educational institutions, professional and corporate organizations, IT service providers, and small businesses the opportunity to experience efficient qualitative services in information and communications technology.

“Data capture was not a new exercise in Nigeria. The usual procedure was to assemble people in schools, hospitals, local governments, under the tree or makeshift venues to collect their details. But when at Chams got the concession, we decided to do the data capture in a different way.  “We calculated that to do 50 million cards, we needed at least 1,000 computers in about 29 locations, such that within the first five years, the 50 million Nigerians would have been fully captured. “We settled for this option because part of the concession agreement gave us the right to operate the agreement for 10 years. So, we designed the mall, and went to the Nigerian Stock Exchange (NSE) where we were able to raise about N8.4 billion from the market. We also added N800 million from our internally generated money, making total of N9.2 billion,” Aladekomo explained.

According to him, it was a   huge project that caught the attention of   Apple Inc,   the   US-based tech   firm following the   quantity of devices Chams ordered for installation at ChamsCity.

He said,   “When we placed the order for the first 2,000 machines, the Apple people called from US to tell us that nobody had ever placed an order for 2,000 machines, not even the US State Department or the US Education Department. They demanded to know why we needed 2,000 computers. We explained to them what we were trying to do and it baffled them.”

Although the story of Chams is not limited to the   Nigerian economy, it is regrettable that such innovative company that has provided jobs to millions of Nigerians   can have one of its flagship project killed by government manipulation of converting a concession into a contract regime.

For now, the equipment has been converted for storage at the company’s warehouse in Lagos. Are we likely to see such initiative again? Only time can tell.

But for now, an incisive entrepreneurial initiative, due to sleaze, brazen highhandedness, and vested interests of a few, has unfortunately kissed the dust.

Even with the closure of ChamsCity, the   other operations of Chams Plc remain solid even though the NationalID was a substantial investment for Chams PLC. Chams PLC has other investments in ChamsMobile,   ChamsAccess,   and ChamsSwitch, a payment processing company. Chams PLC has been very profitable for the past three years having survived the worst effect of NIMC’S acts in 2012. Chams declared dividend to its shareholders and prays to keep giving shareholders dividends yearly from 2014 onwards.