In view of the economic downturn in the country, and with the much bragging in the ICT sector being the cash cow of the economy, and in the light of ICT being import dependent, there is a need for the country to have a closer look at its campaign at attracting investments in the ICT industry.
As the Forex squeeze bites harder, one of the challenges most companies in this fledgling industry have is on funding. Companies have put on hold their infrastructure development projects waiting for investors or funding from financial institutions that are not disposed to lending to the industry.
As at the last quarter of last year, the Nigerian Communications Commission (NCC) disclosed that Foreign Direct Investment (FDI) in the ICT industry stood at over $35 billion.
Both the Nigerian Communications Commission (NCC) and National Information Technology Development Agency (NITDA) have at different forums tried to sell the country’s ICT industry to investors.
The Director General of NITDA, Dr Isa Ali Ibrahim Pantami had at a forum called on ICT investors and entrepreneurs seeking for high returns on investment to have Nigeria as a strong ally. While noting that the business environment in Nigeria is favourable, he further pointed to the quest of the Nigerian Senate to review the tax laws to aid the presidential effort to make Nigeria more investor-friendly.
Also, the Minister of Communications, Adebayo Shittu led an industry delegation to China and after discussions with the investment community and unveiling investment potential in the Nigerian ICT industry, the Chinese investors decided to come to Nigeria to invest about $15 billion into the ICT sector.
In a related development Nigeria’s first indigenous and largest automobile manufacturer, Innoson Group partnered a consortium of Chinese investors to inject $1 billion into Nigeria’s ICT sector.
The federal government has also established investment promotion initiatives that will provide funding for investors that address certain types of investment needs, most notably those aimed at providing broadband access to specific stakeholder groups or communities.
All these are targeted at developing the ICT industry and engendering growth in the economy. But a lot still needs to be done.
Paramount in the investment needs of the industry now, is infrastructure development. As the country moves towards achieving the 2018 target for 30 percent broadband penetration; and the need for funding for infrastructure companies (InfraCos); with the financial challenge in the country’s digital broadcasting migration bid, need for FDI and local funding is of utmost importance.
But also it is very expedient to ensure that we attract local investors into the industry. Banks and other financial institutions should see a reason why they should fund or invest in ICT. Furthermore, every business is looking at bottom line, Return on Investment (RoI). Therefore, it will be a wasted effort preaching the gospel of investment locally and abroad, while policies and practices negate that campaign.
It is high time the federal government looked critically, and with a long term focus, on some of the policies that have over the years threatened investment drive in the ICT industry.
For investment to come from foreign firms/consortium, there should be an assurance that the investments already in place are protected. A situation where policy goalposts keep changing in favour of the federal government will not attract any investor. Harsh economic conditions are already deterrent to FDIs,
Investors need to believe in the viability of projects before they can put their money down.
Efforts should be made to ensure that investor confidence is restored in the industry. Issues relating to multiple taxation, Right of Way, Levies, over-kill penalties and policy strangulation should be addressed.
There is a need to continue putting into focus international events as platforms that are meant to bring foreign investors into the country. Such forums as the International Telecommunication Union (ITU) Telecom World; African Investment Forum (AIF) held in Gulf Information Technology Exhibition (GITEX) in Dubai, United Arab Emirates (UAE), among others, should be used as campaign platforms.
While foreign investors are looking at huge capital intensive projects, local investors can collaborate in establishing ICT parks and other smaller projects.
There should be a synergy, a collaborative effort between the 3-tiers of government and private sector stakeholders; and between teams comprising the federal/state governments and private sector stakeholders versus foreign investors.
This is the time for investment. This is the time for growth initiatives.