Nigeria needs new strategies to grow local technology, says Ibrahim

Dr. Dan-Azumi Mohammed Ibrahim is the Director-General the National Office for Technology Acquisition and Promotion (NOTAP), one of the 17 parastatals under the Federal Ministry of Science and Technology. In this interview with reporters, among other germane industry issues, Azumi-Mohammed lamented the wanton importation of foreign technology, its economic effects and the need to domesticate technologies in Nigeria. ADEYEMI ADEPETUN, was there.

NOTAP recently disclosed that in the last four years, it has been able to save the nation about N188.8 billion that could have gone as capital flight. Can you shed more light on how this became possible?
First of all, let me say that it is difficult to say how much we are losing as a result of influx of various technologies into the country, because not all agreements come to NOTAP for registration. So, we looked at those agreements coming to NOTAP for registration from economic perspectives.

Sometimes, they would bring experts from outside the country to do one thing or the other. Where we feel that we have Nigerians with requisite capacity to do the same job, we say ‘No’ to barging expatriates from abroad. So, if they allocated, say $100,000 for that, we would cut it off and insisted that we have Nigerians that can do it and that they must involve locals and from such agreements we have saved $100,000 that would have gone out of this country.

But before we register any agreement, if it is fresh, we take due diligence to go and crosscheck the existence of the factory or firm. They would give us the addresses of the transferor and transferee, what they do and we take time to go there. We look at the records to ascertain whether the office exists in the address given and then discussion can start.

Sometimes, we go to those addresses and when we discovered that they don’t exist, we cancel such agreements. It is through this process – if you quantify the quantum amount of money we saved that would have gone out of this country- that has amounted to about N188.8 billion. This is from 2000 and 2014, which was what could have gone outside this country as capital flight.

Can you give a vivid assessment of foreign software licensing in Nigeria?
In the last six years, more than 99.9 per cent of the software that are used in the banking industry are imported and if you see the quantum amount of money that leaves this country as software licensing fees, you will shed tears. In fact, it is with pain and difficulty that we approve those agreements. But we have no option.

So, five to six years back, we said to our self: ‘we have to do something’ to ensure that the deployment of every software package coming from any abroad to Nigeria must be done by Nigerians. Nigerians must be part of the deployment exercise. Through this exercise, you will be able to develop the capacity of Nigerians in terms of the deployment of those software packages. If you are involved in the deployment of software in the various sectors, by the time you develop over a long period of time, you maintain it; you may be able to acquire some of the skills and technologies. So, in the process, I would insist that any software coming into the country, Nigerian firms must be involved. If you involve a Nigerian firm, you are developing the Nigerian firm indigenous capacity.

Then, another thing is that, we feel, also that we must give them the financial muscles. If software is imported into the country, the amount of money you pay is in lump sum. Then, after one year, you pay what we call technical service fee. That is like mountainous fee and we insist, out of this mountainous fee, six per cent must be paid to Nigerians. So, any software agreement coming into Nigeria and it is registered with us, we insist that its deployment must involve a local vendor and will also get 40 per cent of the yearly service fee.

With this arrangement, you are economically empowering Nigerians; you are also developing the capacity of Nigerians through software development. Through this action, we have been able to see now that Nigerians have developed capacity or are developing very serious capacity in terms of software development. The truth, however, is that we cannot be in a hurry because where more than 99.9 per cent of software that powers the Nigerian economy are imported, it takes time for Nigerian software to comfortably compete with those of foreign software packages. Another thing is the attitude of Nigerians. Some of those software solutions they import have so many modules and not many of the modules end up being effectively utilized by the Nigerians. But Nigerians are able to customize some of those modules to suite our environment.

The issue is, yes, local software have started penetrating but at a slow pace. But it is a matter of time as far as I am concern. The software products imported into the system are paid in dollars. The truth is that Nigerian economy can no longer sustain that kind of extra expenditures. We are used to getting dollars freely. Now, source of foreign exchange is very scarce. The reality on ground will now force establishments in Nigeria to now use locally-developed software solutions. What is local is by far cheaper, it is robust, in terms of maintenance, and the people that develop the software are always there locally to support you 24/7. So, the Nigerian economy has started accepting the software developed locally, but full acceptability would take time. But I feel the five years efforts that we have put in place are yielding positive results.

The Central Bank of Nigeria recently introduced a flexible exchange rate policy. Can you tell us in specific terms, how this is going to affect the industry?
You see a good number of industries bring experts from outside the country, bring in software and in some cases, raw materials from outside. Now, if you look at the current flexible exchange rate, what we used to get is N198 as official rate but now it has catapulted to over N330. So, if you continue to rely on an imported product that means you will pay a lot of money. By the time you produce a product, it may not be within the reach of an average Nigerian and Nigerian population is a very good market for all international organisations in terms of manufacturing, software licensing and what have you.

So, this forex regime will now force us to start developing things locally. For instance, if a company is importing raw materials from abroad, we have a company within the country that is trying to produce something similar to that. It would be far cheaper producing the product locally than to import raw materials. If you keep importing, in this kind of scenario painted, you won’t be able to compete favourably because cost of production will be too high and an average Nigerian would not be able to afford it. Even the companies have started looking inwards. I will tell you an example of an initiative we have started with PZ. We realised that PZ imports a lot of calcium carbonate from China and we have a lot of calcium carbonate in Nigeria. We have had a forum with them, we discussed with them and asked them: why were they not utilising the Nigerian calcium carbonate? One of the reasons they gave was that local calcium carbonate has a lot of cuts and that these affect machines. We insisted that if the cuts in our calcium carbonate are the problem, which is why R&D efforts are being carried out in our universities and other research and development establishments, we said the universities are there, they can be tasked on those challenges.

We told them to undertake R&D efforts to upgrade the Nigerian calcium Carbonate to the level that it will meet specifications of the industry and we need technology to do that. Then we say: ‘Ok, you are a big stakeholder and we are a stakeholder as well as far as this nation is concerned, why don’t we now put heads together to see that we bring in technology where we don’t have that could convert Nigerian calcium carbonate to the level that will be useful and to the standards they would need.’ So, we are in the process of getting this realised. So, the industries are also looking inwards.

How has NOTAP’s activities helped in developing local content technology in Nigeria?
NOTAP is one of the 17 parastatals of the Federal Ministry of Science and Technology. One of the major mandates of the Office is to regulate the inflow of foreign technologies into Nigeria but we have also responsibility to encourage the development of local technologies.

Technology, in real sense, is what demarcates developed and developing nations. Nations that have developed very well, I think, have been able to come up with technologies that could power their economies and according to our records, more than 90 per cent of the technologies that power the Nigerian economy are foreign and as a nation that is aspiring to become independent, we have to come out with policies and programmes to ensure that we develop local technologies.

So, in terms of local contents, this is what I would say a result of technological research and development (R&D). Japan does not have one-tenth of the resources Nigeria has but Japan is one of the global economies to reckon with. Why is this so? It is because, they have been able to develop technologies, which are home grown and have been exported to other countries.

So, in terms of local contents, you must have to have technology developed because, as I said, more than 90 per cent of the technologies that power the Nigerian economy be it in manufacturing, power, banking, ICT, are all imported. So, if the technologies that power your economy are imported, how you to develop local contents is either to innovate technology locally that would now add value to resources on ground or you allow technologies from outside into your own country but by that time you prepare what we call the ‘human magnet ‘that should be able to capture some of those technologies brought into this country, domesticate them, adjust them and make them locally relevant.

That is how we would be able to improve on local technologies. Nigeria has been refining oil for a very long period of time and the technologies, in terms of oil refinery, are imported and despite the fact that the refineries have been in existence for over 50 years, we still rely on people from outside to come and do the turn-around maintenance. This is because we have not placed a lot of emphasis in developing our human capacity that would enable us to develop our technologies or bring in innovations, adjust them and make them our own technologies. Iran was in the same level with Nigeria but now, Iran can comfortably export refineries outside their own country. So, in terms of local content, we are not doing too badly but we have a lot to do. First of all, from where are the technologies generated? Technologies are generated as a product of R&D efforts. Where do R&D efforts take place? They take place in universities and research institutes.

So, these are the sources of technologies. These are where the innovations are expected to come from to catapult Nigeria into economic prosperity but how are our universities faring? How are our research and development institutions faring? Do they have enough equipment? Do they have the capacity? Even though we have the human capacity, if you look at infrastructures in terms of laboratories, workshops and so on, we are not doing very well. So, for us, to ensure that our local content policies continuously increase, we have to pay a lot of emphasis on our infrastructure.

How robust, encouraging is our local content policy and how well will you say the country is implementing it?
For us to move forward as a nation, all regulators must have to be patriotic. Put your nation first and our elders brothers did a lot and that is why we are enjoying the services they have rendered. I have been able to go to school through scholarship from secondary up to PhD level.

Now, from nursery and primary today, people are paying from their own pocket. That is not sustainable. So, if you want to improve on local content development, the regulators must have to be nationalistic. We have to insist that if we have certain raw materials, solutions or capacities in this country, we insist that anybody who is coming to do business with us has responsibility to invest in local content. If we leave it the way it, we won’t go anywhere. Look at the waiver issue, in those days, people were given waiveR to import rice and even after importing the rice, they refused to pay what we call the custom duty and some even over-imported. If you want to develop local rice, I cannot understand why you give somebody a waiver to import rice, instead of incentives to produce locally. It is counter-productive. But, we are looking inwards now and the situation is changing.

Government is spending a lot of money now in agriculture and we are trying to block some of these major leakages so that huge quantum of money can now be diverted into the productive sector. The development of local content squarely lies on the agencies responsible for regulations. We insist on the guidelines that have been developed and which must be enforced in the economy, those players are also interested in the economy of the nation. So, if the economy must grow, we have a lot of responsibility as regulator. So, in terms of local contents, in our own, we are trying by making sure that any technology agreement brought to Nigeria for approval are looked at from three viewpoints. First, is it in line with the law of the federal republic of Nigeria? There are agreements that are brought onto Nigerians, throwing it to the population to swallow them the way they are with little or no regards to laws guiding the operations of that industry. Where we see that somebody coming to do business in Nigerian says he is not going to pay Withholding Tax, we moved against it, and say this is our country and if you do business and you make money, you have to pay taxes.

The second aspect is the economic perspective. Is the technology you are bringing into the system appropriate? Is the price you are paying commensurate with the services you are getting? If it is now, we tell you to reduce it.

Perhaps, the most important is that any technology agreement that is coming in must have some capacity clauses in them. You have to build the capacity of Nigerians, so that, gradually, those technologies are being absorbed and domesticated to become our own. That is what we do. If all these major criteria are put in place, we register the agreements. So, that is how we try to see that if you are in manufacturing sector and you are giving approval, we say in the next three to five years, we expect you to improve on local contents and that if you do certain things in this regard, we can give you incentives. So, these are the ways I think if we continue to, as a regulator, try to stimulate the economy, which is better for this country.

How well will you say we have been protecting our Intellectual Property through effecting patenting?
As I said earlier, technologies are expected to be developed from universities and research establishments and if you come out with the technologies and you want to reap the value of that technological innovation, first of all, you have to protect it. If you protect the intellectual property of that technology, nobody can use it and make money. But our intellectual Property protection is very weak in this country, particularly in research establishment and in the universities in particularly because researchers are eager to publish. The moment you hit any innovation, you want to hurriedly tell the world that you have done something such that by the time you publish it, it has come to public domain and you cannot claim any right over that.

So, that culture is not there.

Our researchers have missed so many opportunities through rushing to publish the innovation they have made. So, with the assistance of the World Intellectual Property Organisation (WIPO), we now felt we should go into the universities; we should go into the research institutes to establish what we call Intellectual Property and Technology Transfer Office. So far, we have established 38 of them at different universities, different research establishment and at different geo-political zones across in this country. While we establish, we provide them with facility and veritable source of information.

We have over 60 million technologies developed across the world in any sector of the economy and we have, through the assistance of WIPO, sources of the information which Nigeria can access and if you are able to access some of those technologies that are developed by other people protected, it would broaden your horizon in terms of R&D efforts. Maybe you are working crude oil processing, there are so many technologies on that, that you can go through and you may be able to modify the technologies, add one or two inputs to be able to suit your own environment and then, it becomes yours. So, this process broaden the knowledge of our science and technology (S&T) institutions so that you can now make money from our intellectual property.

What level of collaborations do you have with other government agencies in order to move the frontier of your mandates forward?
When the Federal Minister of Science and Technology, Ogbonaya Onu, assumed office, we sat together where he commended and believed strongly that we could use NOTAP platform to catapult Nigeria to economic prosperity. Investors want to come into the country to bring technologies and other innovations but we also give them some kind of incentives. Which are the agencies that can give the incentive? We discussed and the minister directed that a forum be organised with some of those regulatory agencies to put heads together to see what kind of existing incentives we do have and if there are additional incentives that would encourage companies coming from outside that are ready to transfer such technology to Nigerians, we should give them some incentives. So, we have had time cause to visit the Nigerian Export Promotion Council (NEPC), the Nigerian Investment Promotion Council (NIPC), and the Federal Inland Revenue Service (FIRS). We formed, therefore, formed a committee and analyse some of those existing incentives and we have even made another recommendations, which we are going to forward to the Minister. It is the Minister that will not coordinate this with the respective Ministers of those other partner establishments in the committees.
So, it is our hope that, as regulators, when we begin to work together, we can see areas where we can work harmoniously to ensure that we block leakages, and ensure we incentivise players willing to play in each of the sectors in the country.

What is your position on Foreign Direct Investments drive (FDIs)?
In NOTAP, we encourage inter-agency collaborations. Some of the agencies see what we do as counter-productive in terms of foreign direct investment, where we insist that anybody coming to do business in Nigeria must have to respect the laws of the Federal Republic of Nigeria. There must be no restriction. We should not be under any illusion; this foreign direct investment that is coming in is not here to develop this economy.
The investors are here to make money and we should not be under any illusion. So, it is for us as a country to develop strategies that will ensure that our country also gets the maximum benefits of the investments coming into the country. So, through this process, we ensure that if those foreign businesses in Nigeria feel that they have to import any raw materials, the materials must be those we don’t have any comparative advantage on.