‘Nigeria’s ICT industry is yet to exist’
How will you weigh Nigeria’s ICT industry now compared to other countries?
Talking about comparing the Nigeria’s ecosystem with that of other countries, your guess is as good as mine. We are not doing well as a country.
The industry is very fragmented and without trying to be an alarmist, I can very nearly say the industry does not exist because I’m an economist. It doesn’t mean that there are no firms. There are quite a few firms that are doing well but the industry is a collection of firms that are engaged in similar services.
If you have 10 to 25 companies, when in fact you should have 3000 companies, then the industry does not exist. That is the case with Nigeria.
The challenges are both internal and external. Internal, we have looked at ourselves. I am the President of Institute of Software Practitioners of Nigeria (ISPON) and I say to my respected colleagues in the industry that sometimes when attending meetings, our competencies are being challenged, sometimes, we say we can deliver and they tell you, “You don’t have the capacity.” This is true at times. There is no capacity to do certain kinds of work and for us, as practitioners, we need to up our game.
One of the challenges is that we don’t have resources. Let us take the CCMI certification, for instance. If a company desires to attain the CCMI certification, the company needs N250, 000 to start with. That’s cash alone. I’m not discussing human resources because you are going to place people down in your company that will do nothing, more or less, for about six months. How many IT firms have that capability?
Those are some of the challenges. But a lot of external challenges, and when you have the combination of these factors, it is constraining the industry. So what you see is that externally, we don’t have market access. I mean the people that would buy.
The big buyers, the telcos, oil and gas, government, financial institutions and this person have so much money that they can afford to buy at a premium, especially from abroad. They look down on the Nigerian firms and prefer to buy sometimes, substandard applications, abroad.
I’m not saying those applications are not good. But they are substandard to the challenge locally. That affects us because they are built for other societies and they are brought to fix a local need. So, two things can happen.
Sometimes, the project fails. Other times it succeeds. This is on our own flesh and blood. We, Nigerians, then teach the foreigners how to go and re-develop and re-package the application. But then the foreigners take that knowledge away and they own it and later re-sell it to us. That is iberiberism!
You canvassed for a Chief Information Officer at the presidency. What role would the CIO play?
The Chief Information Officer (CIO) is the custodian of government data. He seeks a single tool for the government.
The current scenario is that one minister will say this and another will say that. That brings inconsistencies everywhere, yet, they work for one government. There is one government in Nigeria.
Smart government is run strategically with one line of thought. There is a central control where all data comes from. So when the ministry of health needs data, the same information is available to the ministry of national planning, labour and a concerted strategy for others and that brings efficiency.
To tackle corruption, bring transparency to the system by creating a system of truth that is open to everyone and remove discretion by automation. That’s the work of the CIO. With a national strategy, the CIO can tell the nation what the road map will be for the next five years and we will begin to tune up for it.
What will be your definition of PFS in Nigeria’s tech ecosystem?
PFS is pioneering so many things. We are known for a few products. When you say PFS, it is known for reconciliation.
We have done lots of work in that field. Like Clirec. People also talk about the iTeller for cheque clearing and truncation. Not only have we automated a number of the banks, we have automated the switch for clearing house in Nigeria (that’s the national switch).
We are also known for some beautiful application, which is a payment system. When people ask me that question the answer I always give is that the most important product that we have is the one that we have not built yet. That is still in the minds of people because we say that if we can conceive it, we can deliver it. That’s the way we’ve lived in the past 25 years. We have rediscovered ourselves. We have rediscovered ourselves. We are never satisfied even with our own best.
So many developments are springing up. I can say that PFS is pushing some frontiers. For instance, recently, we had ISPON annual general meeting and what PFS did was to address the software developers about the benefits and the process of CMMI certification. Many people will think because we did it, we want to hide it.
You think it’s a competitive advantage. Rather than hiding it, we believe a candle does not lose anything by lighting others.
The system should be both competitive and complimentary. So those are the kind of things we do. We have supported other companies and shared ideas. We show companies how we did it.
The fact that you are doing that does not mean they will take you out of business. It raises the bar for everybody. Those are the things that make me happiest. It is not about how much money we have made or we can make but let’s first thank God that we can pay our bills and we don’t look hungry. Most importantly, we are creating values. We are creating confidence in the society that the black man can do it. To us, those are some of our contributions.
You said that the industry does not exist yet, but how long will it take companies like PFS, and others in the sector to become a trillion dollar company?
That is a very interesting question. It is also very superfluous to become a trillion dollar company.
What does it mean? Is it in the valuation, revenue, asset and the balance sheet figures? So what’s the valuation? A company’s valuations are never real in this world. It is usually done based on fear and greed. That’s all. Today, I can create a company that has only manufactured one brand of phone and I can hype the company and value it to be a $1 billion company. That’s perception.
So when you talk about a trillion dollar company by perception, I don’t know what that means. A lot of things are happening now and there’s a focus on the valuation of companies. We are old school and I’m not blaming people but we are trained to create companies and values to solve problems.
Talking about whether a Nigeria company can become a trillion dollar company, it is not easy. I talked about the combination of factors.
Some of the big companies that we see today, like Microsoft and Oracle started as local products in their countries. No company has become global without first being local. It is because the environment allows them to thrive. The environment promotes and feeds them, and then they become big.
The environment does everything including subsidy, rebate and every incentive that you can imagine. Do you have an idea how much contract Boeing does with NASA? So if the country is doing such a huge contract with Boeing, now how much it will be valued for? But what happens when you come back home? It is your own brother that will tell you your software is not good and then goes ahead to buy a much more substandard application abroad. People accept an application from Jordan and Estonia? How low can we stoop?
These are things, even if our people cannot do it, give them a good runway, give them access and won’t they do it? We attended the same schools as all these foreigners. We have demystified some of these things but the environment here is the problem.
Another challenge is for example, when Theresa May, prime minister of the UK visited Nigeria, who do you think was on her entourage? She came with accomplished and established businessmen that already have their targets. That’s how it happens.
When American President, Donald Trump, travels anywhere, even for state visits, who are those in his plane? But when our president travels, who are those with him? You will see civil servants, ministers, among others.
When Theresa May came to Nigeria, they invited leaders of business and president of ISPON didn’t get an invitation. What’s the future? Who makes money from oil anymore in the world? We are just a system that is not ready to move forward. We will continue to talk. We have done this for almost 30 years. They don’t seem to understand what we are talking about. But I don’t think, we should continue in our folly.
What are the fundamentals that we need to put in place, having mentioned the challenges, to ensure that the industry exists the way it ought to?
The first thing is to create market access. That’s what we need to do. It is so simple. You say you want to consume what you produce and you stimulate the production of what you consume. You have a virtual cycle. You realise that Nigeria wants to buy an application for personnel for federal government workers; you give yourself a three-year gap. You have already invited the best firms in the world to bid. If the one company that scores 100 per cent is a foreign company, if a Nigerian firm scores 66 per cent, choose the Nigerian firm and then you’ll give the local firm three years. Tell the Nigerian firm that it must match what foreign firm that scored 100 per cent. That’s how sound nations do it. Rather than filter your own resources, later you say there is pressure on the naira.
One minister said Nigeria would start the manufacturing of pencil in the year 2020. While other nations are talking about driverless cars, autonomous vehicles already, some people are conquering space already and we still want to manufacture a pencil? The former deputy senate president said the best way to curb innovation because we are selling oil, is to make sure that electric cars are not in the market. We have people who just do not think before they talk. If we have people with knowledge, the fear of God and skills, Nigeria will develop.
Does PFS have products that can fast track financial inclusion?
The problem with the so-called financial inclusion is that people think that financial inclusion is about creating products. I don’t think so and I have said this lot of times. People will remain financially excluded because they are financially disempowered, that’s the fact! You still have the population, a large population of people living below $2 a day. How do you want to include them financially? The game is laziness. All of us are running around. We cannot be financially included when we are not financially empowered. The first solution is financial empowerment. When 90 per cent of our population is engaged in meaningful work, leave financial inclusion alone, it will solve itself. Anybody that says anything to the contrary does not understand it.
Let’s talk about cheque truncation. What does it mean to the software sector?
The only thing it says is, ‘yes we can’. It is straight forward. Those were the things that they said were not possible. We put a light on it. We have the system, clearly one of the most successful in the world.
Apart from the ATM reconciliation, what other space do you see that there are issues?
There are issues everywhere and that’s the honest truth. Today, the biggest business in Nigeria is politics. The guys that are sound are struggling to look for employment and the brain is like a muscle as well, if you don’t exercise it, it diminishes. The truth is it is either you are in politics or you are a government contractor. If you are not a contractor, you in doing oil and gas, speculating bitcoin or Forex. This isn’t creativity.
Smart countries create egalitarianism and that does not mean equality but equal opportunities. This is how it works. Look at where the lawyers are doing well, construction is doing well; the textile mill and steel mills are working. Do you know what that means? It creates more employment and that will require more automation. So, the people who are in oil and gas will focus on oil and gas. They are not going to be envious of those servicing the lawyers or healthcare sector. That’s how smart economy works. That’s why we are where we are. Had we allowed a system where all works, then you will see creativity and people building because they can.
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