•Says financial inclusion growth rates are disappointing

The Nigerian digital economy is growing from strength to strength despite challenging infrastructure. The Chairman of the Association of Licensed Telecoms Companies of Nigeria, ALTON, Gbenga Adebayo, in this interview with Vanguard Sun Tech News spoke on a number of industry issues . Noting that   Nigeria financial inclusion growth rates are disappointing, he said     that investments in the digital economy will generate up to $88 billion and 3 billion jobs for Nigerians before the end of 2021.



Nigeria’s Digital competitiveness in the next five years

There are indications that investments in the digital economy will generate up to $88 billion and 3 billion jobs for Nigerians before the end of 2021. The Nigerian technology sector has recorded some progress and doubled in size, now accounting for up to 9% of our GDP. However, in the 2nd edition of the world digital competitiveness ranking (released in 2018), which measures knowledge, technology, and future readiness, Nigeria was not on the list.

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We believe that the commitment and investments in industry infrastructure by telecommunications and network operators, aimed at achieving 30% broadband penetration by end of 2018, and building incremental growth thereafter, will go a long way towards rectifying this; and as such, we hope to have contributed to building a fully digital economy in Nigeria by 2020.

Challenges of mobile operators in Nigeria and how government can address it

The impact of our industry on national security and economic activities is enormous, and could be leveraged further by government agencies. However, an increased level of protection is required for the operators’ resources. The telecommunications sector should be designated and classified as critical national socio-economic and security infrastructure in order to reduce incidences of service disruption from the activities of revenue collection agencies, and willful damage to critical network infrastructure. We’d also like to see government efforts in reducing cases of duplicate regulations.

Our journey towards financial inclusion

Our financial inclusion growth rates are disappointing, especially in contrast with the global and regional landscape – between 2014 and 2017, global inclusion rates rose by 7%, Sub-Saharan Africa growth rates rose by 9%; Nigeria, in comparison, experienced an increase of 1%. The 2014-2017 economic crisis certainly played a significant role in limiting the growth of inclusion; factors like job losses, business closures, and increasing unemployment rates led to reduced spending and saving power for millions of Nigerians. Limited infrastructure is another factor – the cost to banks of establishing branches and ATMs, in rural areas are far too high. Knowledge, trust, and confidence is the security of the banking system has been another prevalent factor.

Granted, some of these factors are beyond anyone’s control, but if we better leverage the resources that we have at our disposal, we will begin to see more tangible results. Mobile money presents a robust solution, as the Nigerian mobile market continues to grow enormously, with 162 million subscribers and an 85% penetration rate. Improved cross-industry collaboration amongst key players, and regulations that accommodate Telecoms Operators will help to bridge the financial inclusion gap in a sustainable way.

GSM operators’ commitment to expand financial inclusion to 90 million Nigerians by year 2020.

This commitment when evaluated against a backdrop of their capacity and expertise is extremely significant and could reduce Nigeria’s exclusion rate to as close to zero as is possible. The Nigerian telecommunications industry has the technology, requisite infrastructure, subscriber base, distribution and contact point network that can be leveraged to quickly give many un-served Nigerians access to financial services.

These network operators have a combined reach of 85% of Nigeria’s Landmass; up to 1,000,000 unique agents across the country, creating a strong distribution network; and they have service contact points in all Nigerian local government areas. This, in addition to a subscriber base of over 160 million individuals, means that the telecommunications industry holds the largest coverage and customer base of any industry in Nigeria.

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Through their existing distribution network, and in collaboration with banks and financial service providers, the leading network providers – Glo, 9Mobile, Airtel and MTN – have committed to making use of their agents to improve access and distribution of financial services and products.

Achieving digital and financial inclusion with affordable 3G enabled smart phone devices

By July this year, the NCC reported that the number of internet users had hit 103 million individuals. Considering that this represents a 73% increase between 2012 and 2018, there is evidently a rising demand and use of internet services, despite the associated costs. However, in recent years, there has been a significant increase in internet service providers; and investments into the sector have been significant, with over $70 billion deployed for the installation of over 50,000km of fibre optic cables and thousands of 2G, 3G and $G sites. This rising proliferation and improved infrastructure will inevitably result in lower costs for end users in the near future. Furthermore with many low cost smart phone options being introduced to market every year, we see this supporting the increase in digital activity

The role of Telcos in driving financial inclusion

We are collectively driving this process as an industry, and with the understanding that the telecoms industry has the most reliable public and socio-economic infrastructure in Nigeria, we came together as an industry to discuss how we could effectively contribute to one of the greatest potential drivers to our national development. We have agreed to deliver a concrete commitment to Nigeria – a promise to materially improve financial inclusion rates and to deliver access to financial services to 90 million customers within the next 30 months. This will be done by using our customer service agents and distribution networks across the country; in 30 months, which is the deadline we have set ourselves, our aim is to have brought access to financial services to 90 million customers, to be serviced by 600,000 agents.

ALTON’s commitment to deepen financial literacy across the country

We acknowledge the concrete commitments the industry has made towards delivering access to financial services today, as well as their commitment to financial literacy. However, while vital, it cannot be implemented by one single industry. A more integrated and collaborative approach, if allowed to, will deliver long term solutions and tangible impact.On our part, by deploying our highly rated human capital development resources, we plan to train and equip our existing and future distribution agents with the requisite knowledge and capabilities. In this way, they will be able to educate citizens on financial services while effectively delivering these services.

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Engaging government to create enabling environment

There is certainly a willingness on the part of the government and regulatory bodies to provide the right environment in which Telecoms Operators thrive, but this willingness must be translated into a level playing field on which the Telcos can play. The Nigeria Communications Commission has indicated no objection to our participation on delivering mobile financial services and participating in the fight to a more inclusive society; however, we believe that constant intra-industry dialogue is an integral part of enhancing the potential for success, thus we will continue to engage all the stakeholders as we work towards a common goal for the greater good- a more included and prosperous Nigeria

Position of ALTON on the lawsuit by MTN Nigeria against CBN

We are very concerned about the signal that this sends to foreign investors. As an industry that has succeeded in consistently acquiring Foreign Direct Investment, and contributed significantly to our GDP year-on-year, this type of policy inconsistency could send the wrong signals. We recommend constant and continuous dialogue, and will continue to contribute to ensuring an amicable resolution for the good of the industry and the country at large.

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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.