Harnessing digital resources for national economy
The rapid spread of digital technologies is transforming many economic and social activities. However, for developing countries, including Nigeria, not to be left behind, a smart embrace of new technologies, enhanced partnerships, and greater intellectual leadership are needed to redefine digital development strategies. ADEYEMI ADEPETUN writes.
The digital revolution is transforming lives and societies with unprecedented speed and scale, delivering immense opportunities as well as daunting challenges.
Notwithstanding the challenges, developing economies are fast-making efforts to catch up with the developed world. Although these are still early days in the digital era, there are more questions than answers about how to deal with the digital challenge.
Given the absence of relevant statistics and empirical evidence, as well as the rapid pace of technological change, decision-makers face a moving target, as they try to adopt sound policies relating to the digital economy.
The need to find the appropriate policies for digital economy journey formed the basis of the Association of Telecommunications Companies of Nigeria (ATCON), organised a National Dialogue on Telecoms and ICT Sector in Nigeria, themed: “Harnessing the Digital Resources for the building of our National Economy,” in Abuja, at the weekend.
According to stakeholders and industry thought leaders at the conference, broadcast virtually and physically, the expansion of the digital economy creates many new economic opportunities.
To them, digital data can be used for development purposes and for solving societal problems, including those related to the SDGs, and can thus help improve economic and social outcomes, and be a force for innovation and productivity growth.
From a business perspective, stakeholders noted that the transformation of all sectors and markets through digitalisation can foster the production of higher quality goods and services at reduced costs.
Delivering the Principal Keynote address, the Minister of Communications and Digital Economy, Dr. Isa Pantami, re-emphasized the resolve of the Federal Government to continually advance the digital economy agenda of the country.
Represented by the Executive Vice Chairman and Chief Executive Officer of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, the Minister reminded that the digital economy journey was started by the Ministry.
This followed the President’s approval in 2019, and culminated in the development of an eight-pillar National Digital Economy Policy and Strategy (NDEPS), with a view to providing a more coordinated and enhanced national policy direction for transforming Nigeria’s economy into a truly digital economy.
He said the NDEPS is a policy document that addresses different aspects of development that require attention to have a vibrant digital economy, adding that, like Nigeria, most nations are prioritising the need to develop their digital economies because of the multiplier effect on all other sectors of the economy.
The Minister listed some of the challenges of the digital economy to include rapid evolution of technology, and widening inequalities between the digital “haves” and “haves-not”; need for new regulations; cybercrime and other threats; low level of digital literacy; and the need for infrastructure.
While expressing optimism about Nigeria’s digital economy strategy, Pantami identified economic growth and productivity; increased transparency; growth of digital innovation and entrepreneurship; digitisation of work; and useful insights from big data as some of the opportunities that abound from which the economy will gain.
“The telecom and ICT sector stand to gain a lot from the development of our digital economy and the public and private sector need to come on board to maximise the impact on the entire economy,” the Minister said.
Place of Broadband Infrastructure
However, speaking as the lead presenter at the second panel session with the theme, “National Funding and Investment Strategy for Broadband Infrastructure and Digital Economy,” Danbatta focused on what the Commission had done in the last five years.
These are stimulating the development of resilient ICT infrastructure, and the benefits these regulatory efforts have brought to the economy.
Situating his presentation in the context of, “Nigeria’s Telecom Sector: Yesterday, Today and Tomorrow,” Danbatta explained that access gaps in the country have been reduced from 217 in 2015 to 114.
“We have licensed Infrastructure Companies (InfraCos); we have introduced innovative policies such as spectrum trading and spectrum re-farming; broadband penetration has increased from six per cent to 43.3 per cent in the last five years. Also, from eight per cent in 2015, the telecoms sector contributed over 14 per cent to the country’s Gross Domestic Product (GDP) as in the second quarter of 2020, valued at N2.3 trillion,” Danbatta said.
Improving service delivery
Also critical to harnessing digital resources for the national economy is the task of improving quality of service (QoS). Danbatta informed that periodic review of measured and monitored key performance indicators (KPIs) showed that two prominent key issues are adversely impacting service quality. These are technical and non-technical challenges.
Danbatta said machinery was in place to address these challenges through the Task Force on QoS; QoS on Fixing Project; Industry Working Groups on QoS, Short Codes, and Multiple Taxes; and Deployment of QoS and Spectrum Tools.
He said in 2018, the Commission finalised the adoption of 3G and 4G KPIs and monitoring of the KPIs have commenced in 2018 and 2019 respectively. The same year, he also finalised the adoption of Internet Service Providers (ISPs), and Collocation Service Providers (CSP) KPIs and their monitoring has fully commenced.
Through these initiatives and periodic monitoring of operators’ performance as measured against the thresholds set in the KPIs on QoS delivery, the NCC has been, and will continue to put operators on their toes, especially for digital services.
Utilising spectrum for improved economic returns
Danbatta also said a number of initiatives are in place including spectrum trading, infrastructure sharing, satellite infrastructure to support the Federal Government’s drive for socio-economic development and digital economy.
For instance, he said the transfer of the spectrum licence of 2X 10MHz in the 900MHz E-GSM Spectrum band from Intercellular Nigeria to Airtel Networks Limited amounted to about N8.9 billion. The amount, generated through that singular initiative which was put in place as revenue to the Government.
Through effective utilisation and optimisation of spectrum, between 2015 and 2019, the Commission had remitted N363.344 billion to Federal Government Consolidated Revenue Fund (CRF), through spectrum fees and operating surplus. All of the above initiatives have also helped the Commission in identifying potential frequency bands to be harmonized for 5G deployment, which include 26GHz, 38GHz and 42GHz.
Harmonious relationship among service providers
For seamless services, Danbatta said there must be harmonious relationships among operators, and urged telecoms operators in the country to settle the huge interconnect debts being owed by various industry operators, noting that this should be resolved in the wider interest of the industry.
He said: “interconnectivity indebtedness valued at over N70 billion is a big challenge to infrastructure expansion and inimical to healthy competition,” which are needed for facilitating digital economy in Nigeria.
Need for a telecoms bank
To expand services, the operators have called for the establishment of a specific bank that will see to the funding of activities, especially industry’ infrastructure roll out.
Like the Bank of Industry, Bank of Agric, the service providers said it will be a great leap if the Federal Government can help with a telecoms bank.
Leading this charge is the Managing Director eStreams Communications, Muyiwa Ogungboye,who said though the sector is fast maturing, “but funding has been a constraint. Having a telecoms bank, specifically created for the industry will not be a bad idea.”
He said local banks see investments as once and for all initiative, “but globally telecom is a long term project, which requires time to mature.”
The eStreams boss appealed to the leadership of the Nigerian Communications Commission to priotise the challenges of small operators in the sector.
On his part, the Deputy Managing Director at Huawei, Osita Nweze, observed that the industry had grown significantly in the past 10 years and getting international investors in the areas of phone assembly and infrastructure deployment had become easy.
However, he said Nigerian financial institutions were not encouraging operators as funds were given out at high-interest rates that would make the investment non-viable.
At high naira to dollar exchange rates, Nweze said no investor would be willing to deploy infrastructure in underserved areas of the country.
“The CBN has tried to implement measures to help the telecoms industry but presently, the intervention is not enough; there needs to be more. No one will provide broadband services in underserved areas unless decent exchange rates are available,” he added.
According to the Chief Executive Officer, 9mobile, Alan Sinfield, it is very difficult to have a pocket deep enough to do the scale of network infrastructure deployment that Nigeria needs and deserves.
He said what 9mobile had done was to attract hyper-scale investors and partner other industries and companies that had already deployed infrastructure.
The Director, Regulatory and Government Affairs, IHS Nigeria, Oluwabankole Falade, said in terms of market size, geography and intellectual capacity, Nigeria was ready to attract funds.
However, he said, operators often considered the terms and interest rates of such funds.
Falade said public-private partnership would address funding challenges a great deal, saying the broadband plan highlighted the role of collaboration.
He added, “What we need is to cascade this plan and bring it to the subnational level and work in partnership with states to make the business environment friendly.
“If we get the environment right, we will have a lot of people rushing to bring money into Nigeria and the cost of those investments will be more favourable.”
While moderating the session, the President, Association of Telecoms Companies Of Nigeria (ATCON), Olusola Teniola, noted that the Nigeria National Broadband Plan 2020 to 2025 stated that the country needed up to N5bn to bridge the network infrastructure gap.
Danbatta noted that the foregoing is by no means, the complete portfolio of the Commission’s focus.
He said the role of the NCC is to drive major digital initiatives and policies of the government, hence, the need to continue to work with the government as a critical stakeholder.
According to him, the NCC remains committed to driving the NDEPS and the NNBP 2020-2025 for advancing the digital economy vision of the Federal Government.
The President of ATCON, Olusola Teniola, said the national dialogue was targeted at harnessing the digital resources in the country with a view to optimising innovative ideas to effectively pursue the digital economy agenda of the Federal Government.