Inside Issues

Ufuoma DaroThe internet has revolutionized the global society as well as transformed economies and technological systems. Over the past three decades, this tool has no doubt made significant impact in the socio-economic development of nations with applications such as e-commerce, online banking and epayments, e-health, e-learning and e-government taking centre stage.

As Nigeria continues in its quest to become one of the 20 leading economies by 2020, stakeholders in the Information and Communications Technology (ICT) sector are concerned about the current level of internet connectivity, quality of service and penetration in the country. This is against the backdrop of the experience in other countries where speedy broadband penetration has been contributing substantially to economic growth.

Despite having over 98 million connected devices in Nigeria, access to affordable, effortless and seamless unlimited broadband internet experience still remains a major concern to many users. A lot of people use multiple devices in order to get access to internet at work, home or while socializing with friends.

Frustrations of Internet users in the country range from slow connectivity to high cost of services which are compounded by exploitations by the Internet Service Providers.

Recently, I was accosted by a lady on learning that I am a journalist reporting news in the ICT sector. Her grievance was that she is being exploited by her service provider and she seems powerless to do anything about it. Her frustrations with the ISP who claim to be providing services using 4G-LTE technology is that the service is very slow and she believes she is not getting the value she pays for. According to this lady, she subscribes to a service which costs N7000 for 15GB per month and which most times does not last for a week; adding that all she does is check her mails and do a few downloads, not videos. However, in a certain month when her children were around she decided to subscribe to the unlimited service which cost N18 000 per month with this same provider; that, to her, was a great mistake as the service was as good as Dial up internet. “There’s no greater punishment than slow internet,” she said as they could Google, Facebook, check your email under great difficulty and for downloads or watching of videos those were completely impossible. When she contacted the provider she was told that the problem was from her end as the Internet was working fine and that was it. As if that was not enough, after the expiration of that one month, she went back to her normal 15GB/N7000 and at that time the company had a bonus offer of 100percent which gave her 30GB; she said to her utter dismay in exactly one week the entire 30GB was gone. According to her, the children had gone back to school and she was the only one using the Internet to check her mails but no videos. She called the company severally asking for her usage history, they promised to send it to her by email but never did. She felt cheated and didn’t know what else to do. This is just an example of the many woes and frustrations that Internet consumers are going through in silence in Nigeria. It was therefore heartwarming when the NCC last year took a management decision to protect telecoms consumers and amplify its activities towards ensuring the consumer enjoys a customer experience that is enhanced and contented with in time and quality.

The declaration of the year 2017 as the ‘Year of Telecom Consumer’ by the Commission has continued to record more success stories but apparently only in the voice segment of the industry even though complaints in Internet usage are as old as voice.

Investigations have shown that high cost, lack of access, and slow Internet connectivity in Nigeria, remain a major concern in the telecommunications sector, and require urgent attention in the country.

Slow speed has implication in cost of use of internet; as service is slow, your data gets exhausted without getting the information you wish to upload or download. In fact, many cannot upload or download video.

Speaking at a forum last year, the Executive Vice Chairman, Nigerian Communications Commission (NCC), Prof. Umar Danbatta, attributed poor quality of service and slow Internet connections in the country to neglect of fixed telecommunications services, which have put tremendous pressure on mobile wireless services.

Danbatta said to reduce pressure on the existing lower microwave frequency bands and increase broadband access across Nigeria, the NCC has set aside the 38 GHz and 42 GHz bands, adding that both bands were suitable for short hop and point-to-point terrestrial links. These also support 3G/4G/LTE backhaul, and a high degree of frequency reuse due to the high directivity of their antennas.

The NCC however still needs to do more in the area of protecting the Internet users in the country. To start with, the Commission should ensure that all ISPs operate within the law and acceptable limited quality of service agreement.

Also, the Consumer Complaints Report Quarter 3 2017 published recently by the Commission focused on only voice telephony complaints as there no mention of complaints by Internet users.  The NCC therefore, should increase consumers’ enlightenment campaign in the area of complaints from Internet users so as to protect them and ease the challenges faced in this year 2018.

Recently, my sons placed order for shoes on a particular eCommerce site in Nigeria. The merchant got in touch with them and asked that they pay some amount of money as deposit, which they did; and the merchant promised to have the shoes delivered in  two days’ time. Two days became weeks, they kept calling and the response will be tomorrow and the tomorrow was never ending. Well, finally I intervened  and the shoes were delivered; as at that time of delivery one of  my sons had travelled to Abuja and I asked the young man who delievered the shoes what will happen if the shoes didn’t fit as he won’t be back for about two weeks. He said he will change it for him.

Two weeks later my son returned and the shoes were too small. I again called the merchant who promised they will exchange the shoes for him and we fixed a date. When the day came, the shoes didn’t come and the merchant stopped picking our calls. Till date the shoes are still with us and my son has returned back to his school outside Nigeria. Unfortunately, there was no way to locate the merchant and no place to seek redress.

This is just an example of what some Nigerian consumers have experienced with eCommerce in the country.

What is eCommerce? At its core, e-commerce refers to the purchase and sale of goods and/or services via electronic channels such as the internet. Like any digital technology or consumer-based purchasing market, e-commerce has evolved over the years. E-commerce was first introduced in the 1960s via an electronic data interchange (EDI) on value-added networks (VANs). The medium grew with the increased availability of internet access and the advent of popular online sellers in the 1990s and early 2000s. Nigeria has joined the bandwagon and is making good progress with the likes of Jumia, Konga, Jiji to mention but a few.

The benefits of e-commerce are many. Suffice it to say that with e-commerce people can now carry out businesses without the barriers of time or distance. Purchases can be made 24 /7, making it available to every place in the world, at any time.

Also, consumers can do their shopping online in the comfort of their homes and offices. e-Consumers can browse through many products within minutes, compare prices quickly and place orders for almost everything he wants.

However, in spite of the advantages highlighted above, there are limitations on what one can buy online. There is the issue of inability to identify, view or touch the items to be purchased as well as the vagueness of information about the products offered. There is also no guarantee of transaction security and privacy. Anyone, good or bad, can easily start a business on the Internet. Many fake site operators defraud unsuspecting customers. These underscore the need for an adequate legal protection for e-commerce consumers. Otherwise, consumers will be cheated and subjected to all sorts of unfair trade practices as obtainable in the ordinary commercial transactions.

 

Currently worth around $13billion (about N4.01trillion), experts in the Nigerian financial service sector have estimated that Nigeria’s e-commerce market value could rise to $50billion (N15.45trillion) over the next decade.

 

A recent report by London based Economist Intelligence Unit (EIU), identified industry giants, such as Jumia, Konga and Jiji, as leading the African charge to boost the continent’s growth of online, technology based retail business.

 

Recently, the National Bureau of Statistics (NBS) predicted that the e-commerce sector is expected to contribute about 10 per cent, of a projected N10trillion, to the nation’s Gross Domestic Product (GDP) by 2018.

The above are indications that e-Commerce can boost the economy of any country, as long as that country wishes to take the advantages brought by the breakthrough in the modern day information technology.

However, this cannot be achieved without putting in place the relevant legal framework that will protect online consumers or e-consumers, as access to effective justice is essential for the enforcement of the consumer rights and obligations.

Unfortunately, general studies conducted on e-commerce in Nigeria have supported the conclusion that Nigerian legal system lags behind in ICT based legislation. And that the existing statutory laws are quite inadequate to address the pressing legal issues affecting e-Commerce and e-Consumers in the country.

The enactment of the Cybercrimes Act 2015 and the Evidence Act 201187 are however, giant strides toward establishing an adequate legal framework in Nigeria for e-commerce and consumer protection by extension.

 

In 2015 the Consumer Protection Council (CPC) unveiled plans to regulate eCommerce in Nigeria. Among the issues highlighted for regulation are non-disclosure of full information on products and services, deceptive advertisement, improper description of products, delivery of defective products, poor informal dispute settlement procedures, double payments and poor or non-existent customer service. However, there is nothing to show that this regulation has taken effect. Perhaps, the CPC needs to borrow a leaf from the Nigerian Communications Commission (NCC) and create awareness on the avenues for seeking redress.

There is also the need for the Nigerian government to put in place appropriate legal framework for the protection of e-consumers; a framework that will enable consumers’ complaints to be heard and determined in good time without much expenses and technicalities. Complainants need not go to the regular courts as courts in Nigeria are congested, and most of the judges manning the courts are not ICT law experts.

Doing this will not only benefit the e-consumer but will also attract investors at home and abroad. Integrity and trust are two key elements of growth in eCommerce. Government must ensure that these are in place and adequate provision is put  in place to protect the consumer.

 

Going by feelers in the economy, it appears the life span of the Ministry of Communications is at stake. Government is reportedly finalizing plans to move the three of the five agencies under the supervision of the Ministry to the Ministry of Science and Technology in a cost-saving gesture.

The agencies to be relocated are the National Information Technology development Agency (NITDA), Nigerian Communication Satellite (NIGCOMSAT) and Galaxy Backbone Limited. Though details are still sketchy, moving these three agencies leaves the Ministry of Communication with only NIPOST and NCC and there are rumours that these two may become answerable directly to the presidency.

Adebayo-Shittu

It will be recalled that in 2016, the Minister Communications Technology, Barr. Adebayo Shittu   and his counterpart in the Science and technology ministry, Dr. Ogbonnaya Onu, were reported to be locked in a protracted battle over the supervision of the NigComSat, Galaxy Backbone and NITDA. This prompted the President to set up a committee headed by the Vice President to look into the impasse.

As of today, there are 17 agencies/parastatals under the Ministry of Science and Technology, while, there are 5 agencies under the Federal Ministry of Communications.

Reports have quoted the Attorney General and Minister of Justice of Nigeria, Abubakar Malami as advising the Federal Government against the continued supervision of the 3 agencies by the Ministry of Communications. According to Malami, the provisions of the existing laws support that the ministry of science and tech supervises the 3 agencies.

The AG argued that while the Federal Government has powers to reshuffle its agencies or corporation, he noted that such powers are not exercised “with flagrant violation of the laws” as government directives through circulars do not override “an Act of Parliament.”

The situation has led to serious protest from stakeholders in the Information and Communications Technology (ICT) industry who have kicked against the planned relocation. Chief among the stakeholders is the Nigeria Computer Society (NCS) with over 20,000 members.

The body argued that all over the world, countries like Egypt, Singapore, India, United States of America, United Kingdom, among others, the Ministry of Information and Communication Technology were created to foster the development of an information society and stimulate the growth of a strong, competitive, vibrant, export-oriented ICT sector.

Given the importance of ICT to the nation’s economic revival and diversification, NCS strongly recommended that NITDA, NIGCOMSAT and Galaxy Backbone should remain under the Federal Ministry of Communications for better performance, networking, coordination, cooperation and collaboration in order to produce better output.

The Ministry of Communications was created in 2011 as Ministry of Communication Technology, for sustained development and actualization of ICT objectives towards diversifying Nigerian economy and to foster a knowledge based economy and information society in the country. It was created to facilitate ICT as a key tool in the transformation agenda for Nigeria in the areas of job creation, economic growth and transparency of governance.

Areas of statutory responsibilities and functions of the ministry include facilitating universal, ubiquitous and cost effective access to communications infrastructure throughout the country; Promotion of the utilization of ICT in all spheres of life to optimize the communications infrastructure – digital content creation, domestic software applications and the delivery of private and public services over the internet; Promote and facilitate the development of the ICT industry and increase the contribution of the ICT industry to GDP.

The Federal Ministry of Science and Technology, on the other hand is one of the strategic Ministries of Government saddled with the responsibility of facilitating the development and deployment of Science, Technology and Innovation to enhance the pace of socio-economic development of the country with major focus on research.

Galaxy Backbone was established by the Federal Government of Nigeria to operate a nationwide IP-based network that will provide a common platform for connectivity and other infrastructure services for all Government Ministries, Departments and Agencies (MDAs) with the mandate to build and operate a nationwide broadband network that provides IP-based connectivity services to all Federal Government MDAs.

NIGCOMSAT was incorporated on 4th April 2006 with a mission is to be the leading satellite operator and service provider in Africa and charged with the management and operation of Nigerian Communications Satellite.

NITDA’s mandate is quite diverse and vast, focusing the responsibilities of the Agency on fostering the development and growth of IT in Nigeria. The agency is committed to implementing the National Information Technology Policy with the mandate is to create a framework for the planning, research, development, standardization, application, coordination, monitoring, evaluation and regulation of Information Technology practices in Nigeria.

To start with the Federal Ministry of Communications should be renamed Federal Ministry of Communication Technology to capture the entire ICT sector as it was before the onset of this administration.

In addition since, it is an issue of Act of Parliament, the Federal Government should amend the laws governing the agencies and Ministry accordingly.

Instead of making the ministry redundant or scrapping it altogether, the Federal Government should empower the Federal Ministry of Communications financially to improve on strategies to achieve gross earnings from the ICT sector, generate employment and wealth creation.

Given the importance of ICT to the nation’s economic revival and diversification, every effort should be made to strengthen the Ministry of Communications Technology, which was created to foster the development of an information society and stimulate the growth of a strong, competitive, vibrant, export-oriented ICT sector.

​A giant stride has been made in the Nigerian ICT space with the recent decision by the Nigerian Communications Commission, (NCC), and the National Information Technology Development Agency, (NITDA), to set up a joint committee to design a framework for collaboration to optimize development efforts for the telecommunications and ICT industry in the country.

An 8-man committee has been constituted to work and submit report  towards the integration process and the way forward with respect to service delivery and non-duplication of services being rendered to the public by both agencies of government.

The joint committee was a major outcome of the interactions between the Executive Vice Chairman of the NCC, Professor Umar Garba Danbatta, and the Acting Director General of NITDA, Dr. Vincent Olagunju, when the latter and his team paid a courtesy visit to the NCC headquarters in Abuja recently. Both agreed that a new era of inter-agency collaboration would bring about desirable results, in line with global best practices.

According to Professor Danbatta, the agreement to collaborate is consistent with the mandates of the two entities to ensure pervasive penetration of ICTs.

Danbatta said the initiative will prove to the world that sister agencies in our clime can work together in the interest of the nation, and charged the committee members to work assiduously to ensure that the objective of the collaboration is realized. 

Over the years Convergence in the ICT sector has been by default as the Information Technology sub-sector, and the telecom sector, already work together in their operations, as such, there should be no form of rivalry in the ways that the two organizations operate these days because it is all about common vision and common goals which are tied together for the future of our nation.

According to Dr. Olatunji, “The Information Technology sub-sector, and the telecom sector, already work together now in their operations. If those of us at the helm of affairs that are driving the industry do not work together, we will not go far.”

The Joint committee, chaired by Dr. Agu Collins Agu, a director at NITDA, is expected to provide detailed areas of collaboration and terms of reference, which will be initialed by the two organizations in due course. The committee would design a framework for collaboration aimed at optimising development efforts for telecommunications and ICT in the country.

This collaboration hopefully will ensure we reach the destination of what we call a networked society, a society that is e-driven, a society that is ICT driven; a society that will be relying on the power and leveraging on ICT to conduct all kinds of businesses.

Like the EVC put it, “We must concentrate on those things that we know that with the right investments and involvement of our human capital resources, we would realize things that we can show the world about the giant strides that are being made in this country, especially in the area of ICT.”

There is no gainsaying that the partnership of the two government agencies drive to pursue a revenue spinning ICT industry in Nigeria is apt at this time, as it will help the current administration’s drive to use ICT to create employment and diversify the economy with the volatility and disruption of oil revenue. ICT is one of the few options government have to diversify the economy and to build capacity using ICT to improve productivity and service delivery for Nigeria to cope with the present economic reality. 

We hope that the collaboration will see increased access to knowledge, content and information through ICT tools, creating jobs and wealth amongst the youths, bridging the digital divide between urban and rural areas, empowering Nigerian youths, expanding and deepening frontier of IT knowledge within Nigeria.

Both agencies should ensure that this collaboration leads towards effective and efficient service delivery to the public based on a pervasive penetration of ICT while taking into consideration the existing ICT infrastructures to coincide with the mandates of the two agencies.

They should ensure that we achieve measureable results. We must not allow the work of this committee to go the way of other government committees in which reports are either not implemented or are implemented haphazardly.

Since Nigeria attained democracy in 1999, one major ace has been the Information and Communications Technology (ICT) sector particularly the telecoms arm. The ICT sector continues to sustain its position as the fastest growing industry in the Nigerian economy.

It is widely reported that the sector has grown at an average of 34% per annum over the last 10 quarters, driven largely by the rapid expansion in telecommunication following the deregulation of the subsector in 2001. The industry’s contribution to the Gross Domestic Product (GDP) has grown from less than 0.5 per cent in 2001 to about 11 per cent in 2015.

Despite the many contributions of the sector to economic growth, government at various levels continue to see the ICT sector more as a “Cash Cow” and this has led to exploitation from all quarters resulting in multiple taxation. The taxes currently levied on the sector include IT Tax on Profit, Annual Operator Levy on Turnover, VAT on consumption of their services and sundry taxes and levies by state and local government authorities, thus making the proposed Communication Service Tax (CST) Bill “the last straw that may likely break the Camel’s back.”

The CST Bill 2015, currently in front of the National Assembly, if enacted into law, will require consumers of voice, data, Small Messaging Service (SMS), Multi Media Service and pay TV services to pay a nine (9) per cent tax on the fees paid for the use of these services.

This tax would be collected on top of the five (5) per cent Value Added Tax that consumers already pay when they purchase devices and communication services, the 12 per cent custom import duties paid on ICT devices, and the 20 per cent tax levied on Subscriber Identification Module (SIM) cards.

According to a ‘Tax Alert’ publication by PricewaterHouseCoopers, PwC, Nigeria, if the Bill was enacted into law, it would mandate service providers to file monthly tax returns with Federal Inland Revenue Service ( FIRS), failure of which will attract strict penalties.

The controversial Tax Bill is said to have passed the first reading at the House of Representatives and it will, upon passage and assent, compel communication service subscribers to pay additional tax on services rendered by their providers.

According to the Alliance for Affordable Internet (A4AI), the new ICT tax being considered by the National Assembly would prevent over 50 million Nigerians from being able to afford basic broadband connection. If passed, the Bill would make a basic Internet connection unaffordable for an additional 20 million Nigerians. Broadband penetration stands at just 12 per cent right now imposing the tax may reduce this figure further.

The reality is that 40 per cent of Nigerians earn less than half of the average income; this means that a basic mobile broadband plan actually costs the majority of Nigerians anywhere between 7 and 18 per cent of their monthly income. The addition of this tax will increase the cost to connect across the board, with women and low-income populations likely to be the hardest hit.

This analysis suggests that the passage of such a tax was likely to threaten Nigeria’s ability to achieve its goal of 30 per cent broadband penetration by 2018 and to undermine the socio-economic progress spurred by increased connectivity.

Nigeria is far behind the more developed countries of the world when it comes to broadband use, and the introduction of the CST will only widen this gap. The National Assembly must reconsider the passage of the CST and its impact on the development of broadband in Nigeria.

Nigerians are already agonizing over the current harsh economic condition in the country, the National Assembly ought to realize that whichever way it looks at the CST Bill, it will add more pressure to the purchasing power of the communication service user and lead to possible increase in charges by the service providers. The CST Bill, to say the least, is retrogressive for an economy.

At a time when the drive should be intensified to attract investors – local and foreign – to commit their resources into rescuing the troubled Nigerian economy, it is sad that our lawmakers are seeking to enact laws that will introduce disincentives to investors.

This proposed CST Bill at its best would serve no purpose except to shore up the revenue base of the government at the expense of the socio-economic life of the people.  It is not in the interest of the poor and vulnerable in the society who required incentives for social inclusion, which is what access to communication services provides.

This Bill is certainly not what Nigeria needs now, we must throw out the CST Bill and create a more tax-friendly environment for investors.

Inside Issues

The recent controversies of Treasury Single Account (TSA) which have ranged on for weeks with the Senate submitting that the contract with Remita, a locally but globally acknowledged software solution by SystemSpecs be terminated, has brought to the forefront the need for us to reconsider our sincerity in boosting local content in the Information and Communications Technology (ICT) sector.

There appear to be a contradiction as the Federal Government through the Ministry of Communications Technology is saying; on the one hand that it plans to enact enabling laws that will criminalize non patronage of indigenous ICT brands by government institutions and the Senate on the other hand is working on terminating the patronage of an indigenous ICT firm.

Vice President of the Federal Republic of Nigeria, Yemi Osinbajo had also promised that the federal government is ready to back up ICT development to enable local content development in the sector. He said the federal government is poised to set up the like of Silicon Valley in Nigeria in partnership with private sector firms.

The Minister of Communications Technology, Barrister Adebayo Shittu, says “Under my watch, Nigeria will not be a dumping ground for all forms of technologies. Local content development policy will be implemented to protect indigenous players in the industry and the ministry will galvanise right policies that will see to the need of Small and Medium Scale Enterprises.”

Barrister Shittu, while promising local Original Equipment Manufacturers (OEMs) of government patronage and favourable policies, pointed out that with the 2014 estimated worth of $39.7 billion, and a forecasted $144billion by 2020, it is disappointing to still see foreign brands towering against local brands in market demand in Nigeria.

The call for termination of TSA contract with SystemSpecs will not in any way promote or encourage local competence; rather it will help to further discourage indigenous firms in the country.

Why after all of these promises by the federal government are we seeing the Senate going in the opposite direction? This recent event is indeed is a clear indication of why we have made very little head way over the years in boosting local content in the ICT, despite the fact that the issue has been on the front burner of industry regulators and policy makers.

Nigeria has continued to lose a lot to the dearth of Local Content in the ICT industry as can be seen from recent statistics, which are quite frightening.

Nigeria has continued to lose a lot to the dearth of Local Content in the ICT industry as can be seen from recent statistics, which are quite frightening.

Recently in his keynote address at the Local Content workshop organized by the National Information and Technology Development Agency (NITDA) in Abuja, the Minister noted that foreign brands have dominance of the $39.7bn in the Nigerian ICT market and the country was losing about $2.8billion annually to the continued importation of ICT hardware and services.

In addition, a recent document released by Business Software Alliance (BSA), the global body responsible for the advancement of the goals of the software industry, said Nigeria’s yearly losses to illicit trade associated with software are estimated at $513 million (approximately N82billion).

ICT development is Nigeria’s next hope after oil; oil and gas sector has failed to deliver the required value to develop the nation in the last 50 years, and this should challenge the government to resort to indigenous knowledge in ICT.

It is however, encouraging that there is a Local Content Policy in place and that the Federal Government wants to strengthen the local capacity of the indigenous companies and make them compete favourably with the foreign ICT companies.

The federal government has also disclosed plans for foreign OEMs to achieve 50 per cent local content instead of shipping in boxes or systems that have already been produced in other countries and to establish factories in Nigeria or partner with any local operators or by buying components of their systems that are produced by local manufacturers.
To achieve this, government must make available the basic infrastructure, such as stable power supply, to serve as nectar that will encourage investors to establish local assemblies for coupling of their CKDs.

Having the right operating environment in place would not only attract the investors to establish plants in the country, but also deepen a win-win collaboration between foreign firms and indigenous players.

The local Software producers and OEMs must also be ready to work hard to ensure that their products and services are globally competitive; they should brace up for new challenges as they can no longer afford to be complacent. The Local IT entrepreneurs they should ensure that their products meet international and acceptable standards and qualities; they should also consider merging in order to increase their capacity and improve the qualities of their products.

The Federal Government through its agencies should ensure effective monitoring and Compliance to ensure that local products and services meet globally accepted standards.

The generality of Nigerians have a high degree of apathy for local ICT hardware products, however, for encourage local content in the ICT sector, they should not see patronizing ICT locally made products as an act of patriotism alone but as an act to reduce capital flight, increase human capital and infrastructure development.

Enough of paying lip service to Local Content Development. It is time for enforcement. Let’s walk the talk.

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