Influx Of Substandard ICT Products Put Nigeria’s Market In Ruins
ON June 20, Jumoke Adeoye, a banker went to a popular store in the heart of Computer Village, Ikeja, Lagos, to change her Samsung Galaxy Duos mobile phone, which recently developed fault after serving her for good three years.
Unfortunately, that particular brand was not available at the store; she decided to look for it in other shops. After frantically combing the market, she eventually got it in a shop. But after using the mobile phone for just three weeks, Adeoye had to go for another one, this time, a small Nokia (Touch light Model). The Samsung smartphone she bought from one roadside shop in the Computer Village market had packed up.
With pain, she went back to the market in search of the shop where she bought the phone, but she was surprised to discover that the place had been sealed up for displaying counterfeit wares.
Adeoye is not alone in this fate. Many Nigerians had been duped in the same manner and sold various counterfeit and fake products.
The high volume of counterfeit and sub-standards products in the domestic market has become a huge threat to Nigeria’s economy, raising serious doubts on current efforts by the Federal Government to resuscitate the real sector in order to contribute meaningfully to Gross Domestic Product (GDP).
Report has it that in Nigeria; about 55 per cent of imported products are fake and substandard, and that the country is losing over N15b yearly to fake or counterfeit goods.
For every fast selling genuine product in Nigeria, counterfeiters would have produced 20 similar products without regards for standards and specifications.
There is hardly any product that is not counterfeited in Nigeria. From the pharmaceutical to the textile, beverage, ceramics, electrical and electronics, book publishing, music and even Nigeria’s fast rising home video industry, the story is the same. The trend has affected investors’ confidence, as many have expressed fear that they might not be able to recoup their investments and remain in business amid challenges of infrastructure and the uncontrolled influx of fake, counterfeited and pirated items.
Counterfeiting destroys creativity. It acts as bane to efforts by genuine manufacturers. It discourages investments and entrepreneurship as it renders genuine products non-competitive. But more worrisome is the fact that sub-standard goods are inimical to the health of citizens.
A manager at Carlcare services centre, in Ikeja, a firm that specialises in the repair of smart phones for overseas manufacturers said the problem with many ICT products in use in Nigeria is that they were copied; they are not original.
“Someone took an original smart phone to China and reproduced it en mass and brought them to Nigeria as original. That is what we have discovered here. We repair for Tecno, Infinix and two other products, but once they bring any of the products for repair, either because of physical damage by the end user, we look out for certain features and if they are not there, we will know that it was copied, we will reject it because it is not from the manufacturers. It is the copied product that malfunctions and not the original, he said.
Quality of phones is poor in Nigeria. The type of phone you use also affects the networks you have on it. The challenges here are much, no infrastructure; Naira devaluation; foreign exchange fluctuations, among others. I can categorically confirm to you that 95 per cent of phone accessories in the market today in Nigeria are substandard
Apathy For Local ICT Products
INVESTIGATIONS revealed that Nigerians have a high degree of apathy for local ICT hardware products, including Personal Computers, laptops, and mobile phones, among others. This has given room for the importation of substandard products.
A reliable industry source said during the week that Nigeria might have ceded about 70 per cent of the country’s technology market to foreign brands.
While, the Nigerian ICT hardware and services industry is currently estimated to worth $39.7b in 2014, and forecast to grow to $144 billion by 2020, an official of the Ministry of Communications, who spoke to The Guardian on the matter, said foreign brands have continued to dominate Nigeria’s hardware market without official control.
According to him, major multinational ICT hardware manufacturers such as Samsung, Acer; HP; Dell; Asus; Toshiba and Lenovo, among others, currently account for 70 per cent of sales in the market, which has not been reciprocated.
This revelation came on the heels of a declaration that the continued importation of ICT hardware and services may also have accounted for a $2b (N320b), yearly losses to capital flight from the country.
He said the major local PC manufacturers and assemblers include Zinox Computers; Omatek Computers, Brian Integrated Systems, Inlaks Computers, Veda Computers, Beta Computers among others; will be required to have a minimum capitalisation of N2b next year for them to operate efficiently.
Though, before she left, former Minister of Communications Technology, Dr. Omobola Johnson, said the ministry was working to achieve 50 per cent growth in local content by 2017, the ministry’s sources said the Federal Government, through the Office of the National Content may require foreign OEMs to achieve 50 per cent local content in their make up.
According to him, the Federal Government wants foreign OEMs to achieve 50 per cent local content instead of shipping in boxes or systems that have already been produced in other countries. He hinted that government actually wanted international brands to establish factories in Nigeria or partner with any local operators or by buying components of their systems that are produced by local manufacturers.
The source said part of the guideline will be that foreign brands maintain in-country research and development departments for the purpose of product conceptualisation, innovation, adaptation, and design and prototype development.
He also said the government had wanted international brands to design and develop products to support Nigerian languages and local use case, among others.
According to him, 18 months ago, local PC manufacturers were producing between 130, 000 and 150, 000 units on a yearly basis, and the average cost of a low end laptop was N50, 000 ($315).
The source, said unlike many more developed markets, in which most users upgrade their hardware every two to three years, “in Nigeria both desktops and laptops are often used five years or more. As a consequence, the after-sales agreement is considered to be an integral component of the local PC market, and the majority of new computers are sold under warranty.”
In a presentation titled: “Investment Opportunities in the Nigerian ICT sector”, at Gulf Information and Technology Exhibition (GITEX) in Dubai, UAE, a telecommunication expert and Federal Government’s consultant, Amstrong Katang, said Nigerian economy today mostly rely on ICT imports and that government was ready to change the trend.
Katang explained that the potentials in Nigeria are huge with an estimated population of 170 million. He said Nigeria today is the seventh largest country in the World; and the largest in Africa with 42 per cent of Nigeria’s population below 15 years, adding that the country’s Gross Domestic Product (GDP) has grown at close to seven per cent over the past five years.
“Also, Nigeria is Africa’s largest economy after recent re-basing exercise from $509.9 billion in 2013 from $269.5 billion. Nigeria’s consumer class is growing at approximately 23 per cent of population in 2012 while the country has had 106 active infrastructure projects valued at $ 100 billion in 2012.
“Today, abut 800, 000 PCs are shipped into the country yearly but available market is about three million, meaning there is demand gap of 2.2 million; yet, $2 billion of IT products and services are imported yearly while export is just about $5 million. Also, about four million mobile phones are shipped into the country monthly. Nigeria has a vision to be ICT hub of Africa, yet, we are having huge Internet bandwidth capacity and last-mile connectivity is non-existent”, he stressed.
Local Experts’ View
EXPERTS said the solution to the influx of substandard ICT products is to manufacture the items locally. According to them the foreign manufactures should be encouraged to locate their factories in the country so as to stop importation.
A telecommunications analyst, Akin Akinbo, said: “I think that the number of phone importation into Nigeria is huge and it is enough to warrant the citing of assembly plants in the country by these phone manufacturers.” According to Akinbo, “ It is only when this is done that we would be able to create value locally and create jobs for the multitude of our employable but unemployed youths.”
Also, President, National Association of Telecoms Subscribers (NATCOMS), Deolu Ogunbanjo, noted that the need for a policy seeking the establishment of local assembly plants by phone manufacturers was long overdue in Nigeria.
He said: “A world-class assembly plant would no doubt catalyse a manufacturing ecosystem in which Nigerian companies would be integral players. The effect would be the creation of skilled and unskilled jobs and the retention of a significant percentage of the value chain in country.”
Chairman, Zinox Group, Leo Stan Ekeh, recently called on government to make available the basic infrastructure, such as stable power supply, to serve as nectar that will encourage investors to establish local assemblies for coupling of their CKDs.
According to him, having the right operating environment in place would not only attract the investors to establish plants in the country, but also deepen win-win collaboration between foreign firms and indigenous players.
SON’s Raid On The Computer Village Market MEANWHILE, during a raid at the Computer Village market last August, the Standard Organisation of Nigeria (SON) lamented that over 80 per cent of mobile phones and other technology devices at the market were counterfeit and substandard, a claim, which Computer and Allied Products Dealers Association of Nigeria (CAPDAN) denied vehemently.
The Director General, Dr. Joseph Odumodu, said counterfeiting of goods had impacted on the sales volume, prices and cost of right holders, likewise investment, royalties and brand value.
He stressed that the impact had been very devastating because of weak regulatory and legal frameworks.
“Though the challenge is not a Nigerian thing, it is global. But in other parts of the world, there are effective regulations, which don’t really give room for culprits to operate. So what they do is to divert those products to Africa, cum Nigeria in collaboration with some unscrupulous elements. We at SON are fighting this menace.
“Our raid on the Computer Village market, which is adjudged to be the largest technology market in Africa, is not over. It is going to be constant. The frequency is what I cannot say for now. “
He lamented “some people within the Ikeja market just assemble all manner of components together, call it mobile phone and decide to put any name on them.”
NCC Approves 2,629 Phone Models For Sale
FROM checks; only 2,629 mobile phone models are currently permitted by laws to be sold in the Nigerian telecommunications market. This is based on the latest report on type-approval released by the Nigerian Communications Commission (NCC). The report showed the various models from different brands already type-approved by the regulator as at April 29, this year. In the report, major phone brands with most approved models are Nokia, owned by Microsoft, Samsung, Tecno, Huawei, LG and Motorola, among others.
The NCC is empowered by the Nigerian Communications Act 2003, to establish and enforce standards for all telecommunications equipment in operation within the country to ensure that they operate seamlessly and safely within the Nigerian telecommunications environment.
According to the Commission, all equipment manufacturers, vendors and operators, including customer devices such as mobile phones and wireless adapters, must ensure that their equipment is in conformity with the applicable standards before bringing them into Nigeria.
Over the years, the NCC had carried out enforcement activities on phone manufacturers that failed to type-approve their imported phones. Head, Enforcement and Monitory Department of NCC, Idehen Efosa, warned phone manufacturers to ensure they comply with the Nigerian laws in their business dealings in the country. “If phone manufacturers consider Nigeria as a good place to do business, they must also be ready to abide by the law of the land,” he said.
I think that the number of phone importation into Nigeria is huge and it is enough to warrant the citing of assembly plants in the country by these phone manufacturers.
How The Economy Influences Counterfeiting
THE Managing Director of a leading mobile phones franchise firm, with branches spread across Nigeria, said the influx of substandard ICT products is a reflection of the Nigeria economy.
According to him, it has become practically impossible to completely erase the menace from Nigeria. According to him, the Naira devaluation and foreign exchange policy have impacted negatively on the economy.
He said refurbished phones are being shipped into the country, mostly from China, stressing that because 80 per cent of Nigerians are poor, it has become practically difficult for some people to go for new and genuine mobile phones.
“Quality of phones is poor in Nigeria. The type of phone you use also affects the networks you have on it. The challenges here are much, no infrastructure; Naira devaluation; foreign exchange fluctuations, among others. I can categorically confirm to you that 95 per cent of phone accessories in the market today in Nigeria are substandard
“The Nigerian economy is not a producing one, we are still a consumer nation, That is reason for the influx of various uncertified products into the country, not only mobile phones. This challenge cuts across other sectors of economy as well”, he said, adding that some Chinese firms are having “a swell time in Nigeria”.
He said the substandard products are cheaper and affordable to many Nigerians because of the low economic index of the country.
SON Canvasses Stricter Border Control To Check Menace
WHILE Nigeria battles to stem tide of influx of sub-standard products, the SON has blamed the seeming uncontrolled influx on poor policing of seaports and land borders by the relevant government agencies.
Odumodu, who stated this in Lagos during a courtesy visit to the leadership of the National Association of Government Approved Freight Forwarders NAGAFF, however hinted that the agency had projected the reduction of the influx of such goods to less than 15 per cent by 2016.
He noted that the current efforts of the organisation at ridding the nation of fake, adulterated and substandard products would yield little or no results if the seaports and land borders were not properly policed.
“We need to properly police our seaports and land borders because we strongly believe that sub-standard products are not brought into the country by ghosts but by importers, who are human,” Odumodu said.
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