Nigeria Needs To Develop Local Content From Foundational Innovation – CWG Plc Boss

Over the years, Computer Warehouse Group, Plc has grown from a small integration company to a one-stop shop for all IT needs. The company is still looking forward to becoming pivotal in solving IT needs around the sub Saharan Africa. In this interview with CHIDIEBERE NWANKWO, the Group CEO of the company, Mr. JAMES AGADA throws more light on the company’s vision and mission; and gives an informed insight into what the country should pursue as Local Content in ICT, among other issues.

 

How will you introduce yourself and the company?

I am James Agada, the Group CEO of CWG Plc formerly known as Computer warehouse Group Computer warehouse Group Plc comprises of three (3) major subsidiaries companies, namely – Computer warehouse limited, ExpertEdge Software and Digital Computer Communications. ExpertEdge Software was the software arm of the then Computer Warehouse Group, and was originally started by Mr. James Agada in 1994, but was acquired by the then Computer Warehouse Limited in 1997. From then on, Mr. James Agada went from the Founder of ExpertEdge, to become a Director at Computer Warehouse, and become the CTO of Computer Warehouse, and has become the CEO of CWG Plc. I am married, I have four kids.

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For some years now, Nigeria have been clamouring for local content in the ICT industry. How will you rate Indigenisation and local content in ICT?

Unfortunately, I will want to point out that it is a pretty much more complex scenario than a lot of people will understand, so it will be very easy to talk glibly of local content if you don’t fully understand what makes up ICT. So, typically, many of the things in ICT starts from fundamental research. So if somebody does fundamental research and identifies physical mechanisms that could be used to do different things. These kinds of research is being done in universities, and in some corporate research organisations.

These fundamental physical things that are established are the signs of ICT. So for instance, somebody discovers or comes up with a scientific explanation of how a transistor works, and why it should work the way it works. And that scientific explanation allows people to build integrated circuits; and it is because you could build integrated circuits that could have microprocessors, and because you could have microprocessors you end up being able to have computers at home. So, if you didn’t have that beginning, you couldn’t have that end. By the time it had gone through that process, a lot of that had become standardized. In theory, I wouldn’t need to know the detailed science of why a transistor works the way it works, in order to build a factory and start producing microprocessor. However, I will find that I wouldn’t be able to design the next generation of microprocessors if I didn’t have this foundational knowledge. So, it is with that physical scientific, that people use it to create the technology, and it is with that technology that you create the product, and it is with the product of course that you start creating the services that use those products.

What I am trying to say is that, because when you want to look at what is local content, you need to put all these things into consideration. If you are looking at something like software, it is the same thing. The foundational area of software, which is governed more by algorithms, by mathematics by statistics, by fundamental research that is done in neuron sciences, in Biology, like linguistics; even in social sciences – these are foundational sciences. Today people talk about DEEP learning and Machine Learning, but what’s the basis for Deep learning and machine learning? It all starts with mathematics, statistics, a lot of thing coming from neuron sciences and biology, a lot of things also coming from philosophy, before you now saying this is a product, before you start applying it as services. So, the man who is going to define the future is the man who knows these foundations. Every other person will be applying what he has come up with. And he is in a better position to come up with new things based on the fact that he knows these things. From there you have the technology. If you take software for example, people create tools that allow you to explore those foundations, and on top of those tools, people create applications that you and I can use. And a lot of the value that society sees is how we use these tools, not necessarily how those tools are built. Why I am trying to make this distinction is that when we look at the wide applicability of ICTs , so that when we say ‘Local Content’, we have to define what we mean by Local Content. It had always been a bit difficult to define it.

As of today, in terms of the foundational things, our local content is practically non-existent. And that’s sad, because that is the area that most of what you require is just your brain and your education. If you go and check how many scientific papers have been published; if you go and check how many scientific papers is being cited in patents, or important papers; or you go and check how many people are doing PhDs in these areas, you will find out that Nigeria probably doesn’t show up on the map.

On the tool side, it is the same thing. The Operating System – probably Windows, Linux. We are not there, there is nothing we are doing. Or you databases, or your compilers; lots of the tools in that technology side, we are not present. We are present in some of the areas we are trying to use these things. We use it in two parts. The thing with ICT is that you can create layers upon layers. So, we are creating services, or products using these tools.

Let’s take software; when you come there, you look at the whole wide area where software is applied. Whenever you buy a phone, there is software on it. And when you buy any phone, the man who wrote the software is being paid. In fact the story is, that for every Android phone you buy, $10 goes to Microsoft, check the number of Android phones we are selling in Nigeria, and check the amount of money that is going to Microsoft. But that’s just one little part of it. For every car you buy, especially the modern cars, there’s software working inside it, somebody wrote that software. So, each time you ride that car, you are using that software, so you pay a little piece for that software. If you go to the Telcos, there’s a whole amount of software. Each time you make a call, somebody has a switch, and its software that is running it. For each of those calls, for each of those lines, somebody must have paid for the software that is running it. Each of your warships, it’s still software that is controlling it. And your country has paid for that warship, and paid for that software that is controlling it. Each of your planes that are flying, when you buy the plane, you are paying for the software, very expensive ones. There are a lot of areas where there is a lot of software that we are using, we are using them and we can count them. But there are others that we don’t know we are using, but we are using them.

So if I am looking at this whole space, and I am asking, how much is my local content? Its minuscule, it’s very small. Not only is it very small, but we don’t even have the capacity to make it bigger. We can’t say let us ban foreign software, because if I say let us ban foreign software, will you still use your gadgets? Will you ban your planes? Will you ban your telcos? Will you ban your warplanes? It’s not even realistic. The issue here is that in the entire stack, what can possibly be local content is actually quite minuscule.

 

Where do we draw a line between canvassing for patronage of local ICT products and services and ban of the use of foreign software?

I agree 100% as a businessman. If I write software, I expect that I be patronized. But like I said, we don’t even have the capacity to write significant software. So, even what we have done, we haven’t even scratched the surface. Since we now know the scope and how much software is out there, we can ask ourselves, how much software is being done by anybody in Nigeria to control the radar at the airport, but it’s somebody’s software, and its national security. How much software are we doing in Nigeria to help us to prospect for oil? But that software is being used in Nigeria for as long as oil is being prospected in Nigeria. How much software are we writing for our military.

The reality is that the sheer volume and scope of what is possible for us to do, if I were to measure our local content against that, it is very minuscule and will remain minuscule because we don’t control the foundational technologies, so our ability to create these is limited. That is why you find that most people are saying local content, they are looking at Human Resources; they are looking at Accounting; they are looking at Banking; these are what they look at.

 

How do we address this anomaly to be able to make an impact?

The first thing is for us to tell ourselves the truth. Which is that, number one, the areas we think that we are protecting is like throwing the bone to the dogs. We think it’s big, but it’s not big. So, if we really want to make an impact, we will really need to know where we are. When people are saying we are spending such an amount on software in the banking sector, that is true; but however, how many phones are we buying in Nigeria? And those phones somebody is collecting $10 on each phone. So really where do you think we are spending more money?

So there are many ways to address it. One of the ways is if the government want Nigerians to build capacity in those areas. Because government is one of the biggest users of software in the whole world. And we can easily take examples from what other countries have done, for example US, India, and others. Like US, is there an Agency of government that is charged with building this software for the critical areas of government; and having this software to be built these software from scratch by Nigerians? It’s not rocket science. I personally am trained in Radar Engineering, I can write that software, and I’m sure a lot of younger people can do it. But this is where government is going to spend money on if it believes it wants to do it. Because in building that software, you build a lot of capacity. The Israelis had issues with people launching missiles. So, the Israelis sat down and built software that worked with the radar, controls the radar, so that the radar can scan and find where an incoming missile is, the software will calculate the trajectory of this missile and where it will fall, and decide if it is going to fall where people live or if it is going to fall in the desert, and then will make a decision that if it is going to be a dangerous one, that it will launch another missile, at a certain speed, at a certain angle, at a certain direction, so that it can go and intercept it. And they deployed it. The only new thing they did was the software. The radar was already there, the missiles they could launch were already there; the only thing that was missing was somebody to track, estimate, coordinate and fire. They didn’t outsource it to anybody, they didn’t buy it, they built it themselves. So, if the government starts making that kind of investment, you are building people who have quite a lot of capacity, because what we lack is capacity. In my view, the important thing is for you to build capacity. It is not the capacity to build HR, because quite frankly, anybody who has the capacity to build software that will control radar, will be able to build software that will do HR. it is doable. Just from the government point of view alone, if government takes those billions they have, they can invest in these people, train them, or do like the Americans and say, I have $10 million to give to the person that builds this software in Nigeria, by Nigerians in the next one year. Build it and I will give you a million naira. So that side of that investment needs to be done. A lot of what we are seeing today came out of such investments. Oracle database that everyone is using was financed by the CIA; the foundational science in technology grew out of mathematics and Set theory by people working in IBM. And these were published, its general information. If for instance, Nigeria decides that government cannot continue to store its data in Oracle databases, for whatever reason, because the information is freely available, Nigeria can say, Nigerian Universities, companies or individuals, I am giving you X amount of money over X number of years, build your own equivalent of Oracle database from scratch, and I will replace my own. There’s no use the man building the software and nobody uses it. Remember what I said, government is the largest user of IT anywhere in the world. You want to do passport, which is supposed to be a secured system, you bring an Indian company to do it. You don’t even have an input into the technology, you don’t even know if it is properly done. If we are looking at long term, becoming sufficient and having local content, or what I call consequential local content, we have to build our capacity to have that foundational technology, we have to be able to own a stack from base to ceiling. Then we will say we are possibly arriving. But if we focus on saying, we spend X amount importing software, we will continue being in the situation we are.

 

What is your view on the adoption of New technologies?

In a way, I think we use them, but the issue is if we know we are using them. By default we are using them. When people use phones they are using Cloud services. When you use Whatsap, Google, mail, you are using Cloud services.

Many corporate organisations, and it is not a Nigerian thing, have an inflated sense of their ability to secure and manage their own IT resources. I say it is inflated because in actual fact there are few organizations that can claim to have the amount of computing power that Google has; the amount of expertise that Google has in managing that computing power, that has the amount of expertise that Google has in securing it. So, when a Corporate thinks, I want to have the system in my office because I want to secure it, it is actually a fallacy. What makes you think you can secure it, so what makes you think that you can secure it? It is a fallacy. But it is not a Nigerian thing, it is same all over the world. And it takes a time for people to transition. But in that transition, I don’t think we are any faster or slower than the rest of the world. We have to go through that period where people will become comfortable. The real funny thing is that most of the time people are privately using the Cloud without fear, without complaints. But when those people become Corporates, they make the decision not to use the Cloud services.

The other part of it is also that many Corporates has made how much they made in IT to make it appear as if they are innovative, and because they invest a lot in IT that means they are efficient. So they use how much they have invested in IT as a proxy for those. So you have banks in Nigeria that has about 200 people working in their IT department.  A lot of researches I have seen show that there is no correlation between how much you spend on IT and how much profit you make, which to me is not surprising. Because the truth is that it is not how much you invest that matters, but what you use it for and how you use it. And that comes back to analytics. The job of technology is to create technology. So, you have lots of solutions that are looking for problems to solve. The job of the business is to take a problem and solve it. So, on the business side, what you should have are problems looking for solutions. And it depends on how you want to solve the problems. If analytics, which is a tool, and not a solution, and if you can’t figure out how to use it to solve your problem, or you assume it can solve the problem somehow; you have two choices, you make the investment and discover that it doesn’t solve it, because you don’t know how you are going to solve it, especially for analytics. You, being a newspaperman, you see analytics showing you how many people read your stories, and you don’t know what to do with that information, the analytics is useless because the analytics can’t tell you what to do with that information. So, if you don’t know what to do with analytics, investing in it is a white elephant. You will get the information, but you won’t do anything with it. You will feel nice, if somebody comes, you will the person your dashboard, but what have you done with it. What you have done is that you have just invested in a solution looking for a problem, but there is no problem. So in terms of or ability to adopt new technology, as much as the rest of the world, if the technology solves the problems, and we know how to use the technology to solve the problems, we adopt it. Nobody told Nigerians to adopt phones. I believe in some cases we adopt the technology too fast.

 

How relevant is the proposal to set up an ICT University in the country?

What I do know is that we have more than 100 Universities in this country. What I do know also is that the foundational things in ICT are not actually unique or dedicated to ICT. Mathematics is mathematics. A lot of things you are going to do is in mathematics, various branches of mathematics and statistics. When I was doing my Masters programme, one of the things I learnt was Digital Signal Processing, and one of the tricks I came up with – and I actually published a good part of it and later had a student do further research on it, is that there is a way you could analyze signals by treating those signals as language, and figuring out what are the rules to that language. And so, when the signal comes and it doesn’t obey the rules of that language, then you know that there’s something wrong. The application we had was analyzing ECG. So, when you take your ECG in your heart, there is a certain way it is that shows that your heart is ok. So what we did, was to decipher the rules of that language. We collected thousands of ECGs. And we deciphered the rules of that language. And ones you have that language, and you have a new ECG, and you check if it follows the rules of this language, if it doesn’t, then there’s something wrong. We did it and it was successful. We had a student write the programme and it actually did work.

Now, the rules of language is defined in linguistics. My dad studied linguistics. So, I actually had to go back and pull out some of his books on linguistics, and asked him some questions. This is because Linguistics had already advanced how those kind of analysis can be done, because that is what they use in analyzing things. So if I set up an ICT University, I am not sure what subjects you are going to put there. Are you going to put linguistics in there? Will those people apply the rules of linguistics if the rules of linguistics is the best approach to solving a problem? Steve Jobs said because he studied calligraphy, when they were doing the Apple Mac, he made it have very beautiful fonts. Before, nobody cared. If he didn’t study calligraphy, which of course wouldn’t show up in any ICT or science, he wouldn’t have that idea. What I do know is that if the objective is to create highly skilled ICT professionals in that narrow area, probably there is nothing wrong with it. If it is something like a post-graduate school where people will come to after they have gone to Universities and acquired various exposure, then there is nothing wrong with it. But for me, the critical thing is building capacity. If we build capacity, and that capacity is not a capacity on application. I am happy with a lot of the things we are talking about innovation. As a country we have invested in innovation, we have invested in trying to find innovative solutions that solve problems and help people grow. The room for innovation is very wide because there is a lot of problems in Nigeria, and where you have a lot of problems, it is an avenue to innovate and solve them.

Looking at what CWG Plc has achieved over its 25 years of operation, what will you say is the company’s growth formula?

I am not sure that there is one single secret. The biggest secret is simply that we want to create an organization that outlives us. A sustainable organization that outlives us. As it is, we have done a transition from our founders to a new set of management. And we hope that the new set of management will do another transition to another set of managers in the not too distant future. So, if your emphasis is on, how will this organisation survive me, after me, go beyond me? The push to do lots of thing to ensure that the company is there. And a lot of things to make sure that the life of the next manager is easier than mine, by solving extra problems, and keeping infrastructure or doing something that when he comes in he can make it bigger. So the real driver is that we don’t want the organization to die with us, and therefore whether there is recession or not, we have to find a way to make sure that it is there for other people to take care.

 

What have been you challenges as compared to other countries where you operate? And where do you see the company in the next 5 years?

We have already set our target for the next 5 years. For the next 5 years we want to move our business to the point where we will be primarily known to be providing platform services. And we plan that by that time we should be doing 60 million transactions per month across our platforms. But of recent we have started to look at that wonder if that is not too small, so we might reverse that. And the reason we want to move to that, remember I said our guiding principle is that we need to set up a sustainable company that outlives us, and that can be transferred from a generation of managers to another generation of managers. And in trying to achieve that we tend to create those platforms so that day in day out service is being provided, value is being created for customers and we are being paid for those values on continuous basis.

Challenges. well, we are an African country so many of those challenges are the same, but I don’t have to invest in 1megawatts in generating capacity, which is what I have here, in other countries, which is a big cost. In other countries, I don’t have to spend N80 million a year on diesel, and another N40 million a year on electricity bill; which is a big cost. Versus other countries, I don’t even have generators. However, those are countries are much smaller than Nigeria. so, what we are battling now is that I can make much bigger revenue in Nigeria than those countries; but because of the cost of doing business in Nigeria, I tend to be making more profit in the smaller countries than in Nigeria, because of the  cost of operating there is much lower. You understand the paradox! Because Nigeria is much more bigger than those other countries, I am making 10 times more profit in Nigeria, but because of the cost of operation, I am making less than a tenth of the profit I’m making in Ghana in Nigeria.

In terms of policies, the only difference is the issue we have with exchange rate. Apart from that, the policies are not particularly different. And understand that some of the things we are trying to do, if those people were to copy it we will be in trouble, because we will be a foreign company there too coming into their countries. So some of us are praying that they don’t copy what we are doing. If they copy what we are doing, we won’t be able to do business in their own countries. That is why when you set up some of these policies, it is assumed that you are only looking at yourself, which means you didn’t go out. Other than that, we are all African country. After all, for some days Eastern Cameroon has been without internet.

Knowing that there has been renewed call for PPP, how have you been partnering with the Federal Government towards ensuring growth in the industry?

We try to partner with the federal and state government in several ways. On the policy side, we do try to partner as members of professional organisations of ISPON, ATCON, NCS. We play our roles as active members of these organisations by making our inputs in the policy objectives. We also do direct engagements with the policy organisations and regulatory organisations from NOTAP and NITDA. We have had engagements with them. We have given them White Papers, we have gone to do presentations with them. We are actually planning an upcoming workshop with NTDA and NOTAP on how to promote local content.

We do send in proposals to government agencies that we think there are interesting things that can be done. And of course we go in with solutions to particular problems and engage with governments. And in the past one year, we have seen a willingness from local governments. For instance we have about two local governments that we are putting up IT platform to help them manage their collection of rates and taxes in the local government. And the argument is not that they don’t have the money, they can’t account for the money, and they don’t know the amount they have collected.

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