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‘Nigeria needs enabling policies to drive digital transformation’

By Adeyemi Adepetun
13 December 2017   |   3:20 am
One of the major constraints we experience is the high cost of operations, vide access to forex, low availability of Power (as you have to rely mostly on diesel-powered generators for a 24/7 operations) and high cost of importation.

Gbenga Adegbiji

The General Manager of MainOne’s Data Centre subsidiary, MDXI, Gbenga Adegbiji speaks to ADEYEMI ADEPETUN on the importance of essential policies to support indigenous businesses to achieve digital transformation in Nigeria.

What are the challenges companies are facing in enabling the digital economy in Nigeria?
One of the major constraints we experience is the high cost of operations, vide access to forex, low availability of Power (as you have to rely mostly on diesel-powered generators for a 24/7 operations) and high cost of importation. Data Centres are capital intensive and usually require huge, clean power for its operations, whether via the public utility or privately owned diesel generators. We have invested significantly in a direct connection to the national grid via one of the DISCOs, in addition to the huge investment in specially designed diesel generators, so we can guarantee high availability of power that such a data centre requires.
Also, we face challenges importing critical equipment in-country. The Federal Government’s policy on forex has adversely affected telecoms companies. In addition, the impact of devaluation of naira to the dollar has been felt by most telecoms operators since most of our revenues are in Naira and the bulk of our expenses are in foreign currencies. We currently import all our equipment from outside the country and with the forex constraint; we have had to almost double what we were spending on equipment two years ago.
Unfortunately with this very high cost of operation, Nigerians still patronise data centres located outside the country which makes it more challenging from a cost/revenue perspective. Despite the existence of world-class data centres in country, built to international standards and armed with all the relevant certifications, most government and enterprise businesses still host Nigeria’s data abroad, rather than patronise indigenous data centres where the security of our data could be guaranteed.

The Federal Government needs to enable policies to drive the diversification from an oil-dependent economy to a services-focused one. Policies such as pioneer status for indigenous operators, tax exemptions, data residency and priority access to forex will go a long way to help Nigeria’s data centre operators, encourage foreign investments in this sub-sector and get us ready for the information revolution that is underway.

Data residency and localisation have become a recurrent theme in ICT in Nigeria. What exactly will the country benefit from implementing this?
Let’s imagine you attend an event or party; where do you park, far away from the hall or close? And if you park far away, do you park in a place with security or do you leave your car on the road where it can be stolen? Data localisation is exactly the same as this. You cannot protect what you cannot control effectively. If you do not park your car or leave valuables where you cannot guarantee its security and safety, why do we store critical government and enterprise data outside the country? A lot of Nigerian data is hosted outside the country, including very sensitive data containing national intellectual property and citizens’ information.

For example, everyone who holds the Nigerian Passport has his data outside the country. In the wrong hands, access to this data is dangerous and makes us extremely susceptible to cyber-attacks. If the servers hosting these details are attacked, we lose heavily; not government now, but all of us. We need to bring all that sensitive Nigerian data into local certified data centres, which are regulated by local laws. This also saves the country forex as capital flight is reduced, generates more employment opportunities for Nigerians and fosters rapid ICT development in Nigeria.
In the Oil and Gas industry for example, local data centres will enable upstream operators retain their data locally as well as provide the capacity to grow their systems on demand while complying with local content laws.

In addition, latency is significantly reduced as they can access their critical business applications without routing traffic outside the country. Reduced latency increases productivity and optimizes automation to positively impact overall production costs. And we can provide these services out of the most secure facility in West Africa, with all the benefits available in world-class facilities at no additional CAPEX costs to Oil and Gas operators. If international OTT players and financial giants are beginning to keep relevant Nigerian content in certified data centres in-country, there is no longer a question of our capability to provide reliable and secured data centre services in Nigeria.

Many world powers are already talking post oil including China. Can Nigeria really wean itself off oil; and what should be our focus?
Yes, Nigeria can evolve from oil-dependent to services-focused. We have depended for too long on crude oil and natural gas at great risk while our GDP is impacted by circumstances beyond our control.

Reliable Power, broadband availability and other transformational infrastructure are critical to this next phase. Once there is adequate power, other sectors, including manufacturing would witness significant expansion. Broadband is also another quick way to transform the economy to deliver services, engage the teeming youth population, create wealth and attract Foreign Investment.
Unfortunately, Nigeria continues to be ranked among countries with the lowest broadband penetration in the world. In latest International Telecoms Union (ITU) ICT Development Index, Nigeria was ranked 143 out of the 176 member states, behind many other African countries including South Africa, Kenya, Ghana, Egypt, Morocco and Cote D’Ivoire. 

Nigeria’s position as the biggest economy on the continent may be in jeopardy in upcoming years if the country does not acquire the digital tools that are a necessity for economic growth in the 21st Century.  It is thus imperative that the Nigerian government aggressively implements strategies to drive internet and broadband penetration.

We have seen first-hand the capability of broadband to transform economies. Through MainOne’s infrastructure investments in the technology ecosystem of Lagos, Nigeria has attracted visibility from global technology companies, enabled over $500million direct investment into Nigeria and created 100,000 direct and indirect jobs by a stimulation of ISP, eCommerce and ePayment sectors.

What are MDXI’s plans for the future in West Africa in the mid-term?
We plan to expand data center build-outs across West Africa in Sagamu, Ghana and Cote Ivoire to address the growing demand for content hosting.We have been in the data centre collocation business for more than 5 years now and plan to remain the gold standard data centre company in the region with great focus on operational efficiency and security, giving our clients the time to focus on their core businesses. We will continue to maintain our certifications that set us apart from the crowd through operational excellence and best practices.
Currently, our Lekki Data Centre is the only PCI DSS certified data centre in Nigeria, which means it is the only facility within the country that can effectively protect consumer security for all businesses that process transactions using electronic payment cards. The wider the financial inclusion envelop, the more data centres like ours will be sought after, to protect our online card transactions.
In addition, we plan to remain West Africa’s biggest edge data centre, servicing both content providers, carriers and local ISPs. We plan to retain West Africa’s internet traffic, within the continent, by building the largest Internet hub in West Africa, with a new interconnection solution “Open-Connect”. Open-Connect is a service that facilitates improved interconnection, collaboration and peering within our data centre and enables superior peering at the Nigerian Internet Exchange also housed within the facility. This product enables the creation of an environment that allows collocated customers connect to multiple networks, cloud and content providers while significantly reducing the cost of backhaul links to various providers. It also ensures competitive pricing in an open access, carrier neutral environment.

MDXI is currently offering free passes and flight ticket to Mobile World Congress. Can you share details about that?
We will be attending the Mobile World Congress, the world’s largest gathering for the mobile industry, organised by the GSMA. This event holds in Barcelona, Spain, and will attract over 108,000 attendees and 2300 exhibitors from 208 countries.

We are offering a lucky C-level executive the opportunity to join us to experience cutting edge technologies that they can adopt to support their business, at no expense. All the winner needs to do is visit our Tier III, ISO 27001 and PCIDSS certified Data Centre and you stand a chance of joining us on this all-expense paid trip to Barcelona.

What are your perspectives on Nigeria’s data centre landscape today?
We are in the information age and our lives now revolve around the availability of one application or the other which is accessed online. Today, almost everyone has one social media account or the other; Facebook, LinkedIn, Whatsapp, Twitter etc; or you use ATM card, do online transfer of funds, watch a movie on Youtube, upload photos or send messages, consult Google maps to know the shortest route; call Uber/Taxify from your phone or order from Konga/Jumia and so on. These applications reside in one Data Centre or the other around the world and accessing these applications rely on connectivity. This is why when one talks about data centre, you have to talk about connectivity as well.

Therefore, as we grow to be more sophisticated digital natives, we will continue to need bigger and more advanced data centres and MDXI and MainOne are rightly positioned for this future.
In Nigeria, the dynamic evolution of digital technology and adoption across multiple verticals is disrupting how business is done across industries, forcing companies to invent new, information-centric business models. Indeed, as Nigerian businesses expand their participation in the global digital and online economy, in areas such as electronic banking, eCommerce, online content distribution, e-learning and online testing, investment in ICT infrastructure will need to grow at a pace that precedes adoption. Data Centres lie at the heart of this, enabling enterprises, social networks et al to store their critical data.
Global regulation is also fostering data centre expansions; Apple, for instance will build its first data centre in China to speed up services such as iCloud for local users and abide by laws that require global companies to store information within that country.

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