‘Infrastructure deficit, multiple taxes, others, hamper outsourcing penetration’
Stakeholders in Nigeria’s outsourcing sector have identified severe infrastructural deficit, multiple taxes and tariffs, tough environment, and regulatory policies among others, as key challenges hindering growth in the sector.
According to them, the government is yet to take the right steps in making precise decisions and policies to drive Foreign Direct Investments (FDI) into the sector and make the nation a major outsourcing destination.
Speaking at a summit for stakeholders, organised by the Association of Outsourcing Professionals of Nigeria (AOPN), in Lagos, the professionals stressed the need for Nigeria to position itself to take advantage of the opportunities that exist in the market, and be able to inject and harvest value from the economy.
Specifically, the Managing Director, MDS Logistics Limited, Taiwo Ajibola, said the lack of a suitable environment has made foreign investors see Nigeria as unstable, and the policies put together by the government as inconsistent. He said the hope and potential in exporting outsourcing services can only come to fruition if the government takes strategic and intentional actions to create a long-term plan to develop the sector.
According to him, the border closure is also affecting the industry, as a lot of cross-border trades are now been hindered. He said the closure leaves the air and sea as the only means of exporting goods and services to neighboring countries, which increases cost and makes the products less-competitive.
In his remarks, Chief Executive Officer, Cowrie Asset Management Limited, Johnson Chukwu, said inadequate power supply, penetration of broadband internet services, and low level of cutting edged knowledge are also challenges to the sector growth.He stressed the need for the government to be dynamic in making policies for the industry, noting that a lot of outsourcing services are now relying on technology, which calls for policy review especially on how it addresses disruptive technologies.
He said: “Take for instance the issue of electronic signature that we have not really legislated on; if electronic signature is administrable in court, there is no need to bring papers for a client to sign before a contract can be executed. This will help professionals in the industry to do a lot more.”
Speaking further, he maintained that the border closure has also been a challenge, as those who want to outsource their services to Nigeria are looking at restrictions in terms of entry. Earlier in his remarks, President, AOPN, Prof. Obiora Madu, said the association is already in talks with the National Information Technology Development Agency (NITDA), and other stakeholders in the industry, to review the policies that governs the sector.
Madu disclosed that the regulator is putting together a committee that will review the outsourcing policy within the first quarter of 2020, sequel to the submission of a bill to the National Assembly. He maintained that the review of the policy would boost professionals’ adherence to the sector standards, and proffer penalties for violators.
We talk of Service Level Agreement (SLA), so there is the need to have standards. When people violate, there should be a penalty. Right now, the big guys are taking it as winner takes all, and that he who pays the piper dictates the tune. It shouldn’t be so.“SLA is a joint decision taken by the provider of the service and the buyer of the service and so it’s not a one way thing and that is currently what it is. But when you have a policy in place, then of course you can implement it,” Madu said.