Friday, 1st December 2023

Made-in-Nigeria phones: Another good idea, awful execution

By Editorial Board
23 August 2023   |   3:55 am
For a country like Nigeria with her huge potentials, and enterprising people in haste of real development, it remains pathetic that despite higher ranking among countries in the world with huge mobile connections today...

For a country like Nigeria with her huge potentials, and enterprising people in haste of real development, it remains pathetic that despite higher ranking among countries in the world with huge mobile connections today, manufacturing of mobile phones in Nigeria has remained a mirage, as over 99 per cent of mobile devices in the country come from abroad. No thanks to policy flip-flop, and insincere loyalty of public officers.

The missing sense of patriotism and nationhood is never far-fetched across the board. It looms large in the irony of noble policies of the government that are controverted by actions of public office holders, including the policymakers. The sabotage, deliberate or otherwise, explains the steady influx of foreign-made phones in a country that also has a ‘Made-in-Nigeria’ policy in place. Such contradictions signpost a country undecided, and a red flag for investors.

Recall that the former Minister of Communications and Digital Economy, Dr Isa Pantami, in 2021 announced with relish that the Federal Government had achieved 100 per cent in the production of Subscriber Identification Module cards as well as the manufacture of many components of cell phones used in the country. Pantami added that the local production was sequel to the national policy on local content signed by the then President, Muhammadu Buhari, on the promotion of indigenous content in the Nigerian Telecommunications sector.

Like in other spheres of the dense economy, the telecoms sector has a huge potential and a goldmine waiting to be harnessed. According to numbers, local mobile connections are already more than 320 million SIMs since the telecoms revolution began about two decades ago. Active mobile connections through technology platforms such as GSM, fixed wired/wireless and Voice over Internet Protocol (VoIP) are around 221.2 million. Connections to the GSM platforms through mobile network operators (MNOs), largely the quartet of MTN, Globacom, Airtel and 9mobile, as at May 2023, stood at 220 million. These figures have pushed the country’s telephone density to 115.9 per cent.

In this loop abound both fortunes and missed opportunities for Nigeria. For instance, from 2019 to 2021, the total telephone shipment to Nigeria was put at $2.35 billion, bringing the average monthly import to $65.2 million. Myriad brands sold about 63 million devices in Nigeria yearly. Another report estimated that an average user changes devices six to 18 months. At the current exchange rate (N768/$), the data, supplied by the International Trade Centre (ITC), suggests a monthly import of N50 billion worth of phone products to Nigeria – and on the slip side, a national wealth transfer to Asian countries and the likes.

Indeed, the local content policy to have international brands set up manufacturing outlets in Nigeria as companies like AfriOne, Imose, RLG, Bryte, Solo, Omatek and Zinox delve into local assemblage of phones and computers. Today, they have all closed shops and are outmuscled out of the local market by cheaper imported brands that are also allowed legal entry by the same government that made a public show of ‘Made-in-Nigeria’ phones!

The awful policy somersault and public officials working at cross-purposes are indeed lamentable. The truth is that the lack of patronage is not peculiar to the telecom sector but across the board. Remarkably, the automotive policy has been here for over a decade and several local vehicles have already rolled out. But how many of such vehicles are in Mr. President’s convoy – at least to show leadership by example? If state governors and Houses of Assembly members are freely rejecting Innoson Vehicle Manufacturing (IVM) Limited in preference for more expensive popular brands and at taxpayers’ expense, then why should private citizens venture? It showcases the prodigal behaviour of those at the helm of affairs and their colonial hangover of everything foreign is classy and better. It is that mindset of gluttony that has kept the country import-dependent and consumption-centric.

For a fact, the indigenisation policy to ensure global brands transfer capacity and retain wealth in developing countries is not new. Transsion, owners of brands Tecno, Infinix and iTel, has a major factory in Addis Ababa, Ethiopia, where its smartphone components are assembled, tested and completed. Egypt, Algeria, Mauritius and South Africa all have phone assembly factories locally. Rwanda said its Mara Phones are manufactured completely in the country. So, why is Nigeria pussyfooting on such policies and its public officers working hard to circumvent real development without sanctions?

Besides zero incentive on patronage, there is the valid concern on high cost of operation that relatively made some locally assembled products more expensive than their foreign counterparts. Absolutely, Nigeria is still a very difficult environment for manufacturers and investors alike, a reason for a progressive administration to be belligerent in tackling the plight of the manufacturers. In 2016, Samsung Electronics had cited economies of scale, improved infrastructure, and tax reliefs, among others, for the reason it sited its first two African manufacturing plants in South Africa and Egypt ahead of Nigeria. Unfortunately, none of those gaps has been filled in Nigeria, and a reason many legacy firms are leaving the country. It makes no economic sense to set up a manufacturing firm where over 40 per cent of the cost of production is on power alone. The security and other infrastructure are self-generated, yet multiple taxes and charges are remitted to government agencies that have no positive value. Such an environment is closer to hell than investors’ haven!

The current administration, if it has the political-will to walk its talk on industrialisation, must recalibrate its policy direction on local content. Beyond mouthing the policy, the architecture for a strong plan of localising firms must be laid and one that severely deals with saboteurs. For a start, the business environment must be made clement and fit-for-purpose. Secondly, patronage of those products, not just smartphones, must begin with Mr. President, state governors and other public office holders. It should become a law that if public funds must be spent on purchase and office holders, then the local manufacturers and their outputs should be given the right of first refusal and the ultimate preference, in that order. If Nigerians do not patronise Nigeria, then who will? Then, the regulators must be adept at quality and price control, coupled with sanctions for compromises. Firms that cannot replicate or surpass international standards in Nigeria should have no business here.

A good regulatory body like the Nigerian Communications Commission (NCC) and the Ministry of Communications and Digital Economy, if they are more patriotic than self-serving, should be able to negotiate competitive pricing with its local manufacturers. That products are manufactured or assembled locally is no incentive for a hike in unit cost.

The country is already a latecomer in basic trends of modern developments, but it needs not reinvent the wheels or lower standards to catch up. What is worth doing at all, is worth doing well. But the government must as well show good leadership in policy direction and fidelity to its implementation.