Where is the local content in ICT policy? By Y.Z Ya’u
Local production of goods and services has many advantages, notable among which are it makes these goods and services more readily available, cheaper, and more affordable, and creates jobs for the citizens as well as wealth for the country as it cuts on the outflow of foreign exchange for the purchase and consumption of the equivalents. But it also does much more. In the tech area it enables the mastering of technology, facilitates its mainstreaming in all sectors of the economy and society which in turns makes the economy to be more competitive. This is why countries have continually striven to be self-sufficient in certain critical areas of their needs. Nigeria should not be an exception. Yet, the reality for Nigeria with respect to information and communication technology (ICT) is the contrary to the norm.
Nigeria is majorly an ICT goods and services consuming country. We import hardware devices, infrastructures and utilize foreign services such as trainers, consultants, apps, not to talk of the consumption of bandwidth. It is not that we cannot produce these goods and services. Indeed, there have been attempts by both entrepreneurs and private sector players at producing both goods and services. The four local computer assembly plants are just one example. There is of course countless software developed in the country. Matter of fact, Nigeria is one of the leading countries in fintech technology, producing many fintech applications and solutions that have been deployed in several countries. Yet, we have not maximized this advantage and opportunity to make Nigeria a technology producing country.
It is not that nothing has actually been done. Government has, through the National Technology Development Agency (NITDA) developed two initiatives aimed at the local production of ICT goods and services. These are the support by NITDA for innovation and the local content in ICT policy. The innovation promotion by NITDA that is coordinated by the Office for Nigerian Digital Innovation is meant to support young digital innovators to produce goods and services. This support includes training, mentoring and provision of some seed funding, although it is short of a full acceleratorship programme. While this can help in the production of services such as software, apps, etc, it cannot easily produce goods. It can lead to the transformation of tech ideas into businesses, but it cannot on its own lead to goods production.
There are two critical challenges to the production of ICT goods in the country. One is infrastructural constraints and limitations which make such production, where possible, to be very costly compared to in other countries. This cost factor, along with our porous borders makes the country to be opened to technology dumping which allowed sub-standard products that kill local industry.
The second challenge is attitude that is also linked to corruption architecture. This attitudinal aspect manifests in the preference for foreign goods (and even services) such that government MDAs will ignore products by say Zinox (for example) and the other three local computer assembling companies and run to buy clones from Taiwan and Dubai. It is also implicated in the preference of foreign consultants by government officials over their local counter parts, patronizing foreign trainers and their institutions in place of local ones.
Whereas the attitudinal inclination relates to the false notion that everything foreign is necessarily better than local equivalent, the corruption angle is that importation provides a means for fleecing the public treasury.
It was in this context that government initiated the second response in encouraging the local production and consumption of ICT goods and services, which is the local content in ICTs policy. The policy provides that all public ICT procurement is subject to the minimum of 30% local content. However, for years now, the policy is hardly enforced as some of the culprits are very high up in government. In addition, state governments seem not even know about the local content policy. Three years ago, CITAD undertook a survey in Kano about the implementation of the local content policy and found most ministries, departments and agencies (MDAs) in the state did not know about the policy. This lack of awareness is not limited to government only but also within the industry as a number of ICT organizations and businesses did not know about it.
The local content policy is to be driven and signposted by a campaign on Buy Nigeria to be led by the Federal Government. This has failed to pick up as MDAs are violating the policy and are not sanctioned. Ministers and federal permanent secretaries do feel guilty flaunting their foreign acquisitions of digital systems in adorning their officers.
Last year there was spirited effort at the National Assembly to establish a more robust implementation and enforcement mechanism for the local content policy, through a new legislation. Distinguished Senator (Dr.) Aliyu Sabi Abdullahi, the Deputy Chief Whip at the Senate sponsored a bill in 2020 entitled Nigerian local content development and enforcement Commission bill 2020. the bill had three proposes. namely to repeal the Nigerian oil and gas industry content act 2010 and to enact the Nigerian local content development and enforcement commission act and by so doing establish the Nigerian Local Content Development commission.
The bill had three key features. One, it thought to create a centralized implementation and enforcement agency for all local contents in place of the current practice in which there are two separate enforcement agencies: one for oil and gas and the second for ICTs. The second feature is that it expanded the scope of local content to go beyond these two sectors to include more broadly all public procurements including medicine. The third feature is to establish a start -up fund through the local content implementation and monitoring which is to support startups to produce local goods and services in certain critical sectors of the economy such as ICTs, oil and gas.
While professionals across the ICT sector where happy with the bill, it did not get the blessings of the federal government. The popularity of the bill was such that when CITAD convened a stakeholders’ forum for ICT professionals and organizations to look at the provisions relating to the ICT sector, the feeling was like people were going to match from the venue to the National Assembly to demand for immediate passage of the bill. In the end the bill was shut down by private interests, business organizations and entrenched interests, including from within government by those that considered the bill as capable of removing from them of some powers they enjoy without the new law. Consequent upon this, the bill has remained comatose at the National Assembly.
In the absence of the new local content law, there are three things that can be done to promote local production of ICT goods and services in the country. One is for government to return to the basics and kick-start the buy Nigeria campaign. This should go beyond rhetoric as government has to be seen purchasing and using made in Nigeria ICT goods and services. Seeing the government purchasing and using locally produced goods and services will go a long way in dousing persisting wrong perception that local PCs for example, are inferior to imported foreign brands. Government and its agencies should also patronize young innovators and developers to encourage them to grow and make the country globally competitive.
Secondly, government must step up rigorous enforcement of the Local Content Policy. Enforcement will require the development of appropriate sanctions; it is important in this connection to propose real sanction not just again the MDA caught violating the policy but also for the officials in the MDAs who have responsibility for decision making in the procurement of ICT goods and services. The third is that local content policy can only be effective if there are local goods and services to be used. While the current effort by NITDA is commendable, more needs to be done by the government at both federal and state levels. In particular we need to urgently address the infrastructure deficit that makes the production of ICT goods difficult and costly in the country.
NITDA needs to go further and provide citizens and businesses with appropriate information about made Nigerans ICT goods and services because some people and organizations patronize out of Nigerian goods and services not because they valorize foreign goods but because they have no information about the availability of local equivalent. But government on the other hand, patronizes out of Nigeria goods and services, not because it has no information but because, it has no interest in using made in Nigeria ICT goods and services. That is what needs to be changed.
Y. Z. Ya’u, CITAD
