Nigeria needs functional ICT ecosystem to sustain growth, says Onuegbu
Mr. Collins Onuegbu is the Executive Vice Chairman of Signal Alliance, an Information Technology (IT) service provider, and an end-to-end system integrator founded in 1996. Onuegbu, an IT professional with 23 years’ experience in the industry, has worked as an engineer, manager, consultant, and an entrepreneur. He holds a degree in Electronic Engineering from the University of Nigeria Nsukka and an Alumnus of Lagos Business School, as well as the Harvard Business School. He is a member of the Institute of Directors, Council member of the Institute of Software Practitioners of Nigeria (ISPON), member of the Computer Professionals Registration Council of Nigeria (CPN) and member of Harvard Business School Association of Nigeria (HBSAN). In this interview with ADEYEMI ADEPETUN, he spoke on the need for Nigeria to create a functional ICT ecosystem to sustain its growth, among other industry issues.
Over the years, there have been several clamour for local content development of the ICT sector, Signal Alliance, as an indigenous firm, can we say it has enjoyed fair share of the Nigerian market? I don’t think we have and I am yet to see any indigenous company that can say that it has had appreciable local content share of the market. But the market is bracing towards that.
The market has evolved of late. Most companies that were there 18 years ago were mostly representing international firms, but we are getting to the point where the local industry is beginning to evolve. New companies are coming up now that have no relationship or affiliations with international Original Equipment Manufacturers OEMs.
But Signal Alliance adopted the old culture of working with (OEMs), which we have done fairly with but there is need for us to build our local content in the industry. Part of what Signal Alliance wants to do in our new direction is to invest in local companies with local roots and indigenous products.
I see this as an opportunity to react to emerging trends in the evolution, which is gradually taking shape in the industry. So our focus will be to grow local content in the sector.But government supports are critical in making local content country in Nigeria’s ICT sector.
So what have been the contributions of the Federal Government in enthroning a sound local content regime in the ICT sector? I think before an industry indigenizes, there have to be some things that will happen locally and will ignite such influence.
To me, the two industries that have evolved lately are the Music, and oil and gas sectors. The music industry didn’t evolve by government fiat, but because the local consumers yearned for change, so gradually we started consuming local movies and music.
For the IT sector, we have come to discovered with over 140 million active mobile phone users, software development would become very significant in the scheme of things and that will be a force to drive local content growth in the country. Government is doing a little, but the industry proper will well propel its growth via local participation in the development of an efficient ecosystem.
Nigeria needs a functional ICT ecosystem to sustain its growth. In the Oil industry, there are local content laws that drove rapid growth for the sector.
For us in the technology sector, the creation of ICT ministry has helped to drive call for local content development. There is still need to do more and this must be by both stakeholders and the government. I see us building local Internet Protocols in movies, films, software and other sectors of the economy.
So many companies have befitted and will still benefit significantly from what the telecommunications sector is offering. As it is in the sector now, what industry vertical is Signal Alliance focus on? That depends on the solution, which we want to provide.
They are spread among most viable verticals, whether its financial, energy, public sector or manufacturing. In each of these verticals, there are specific applications that help them improved their operations and in all we work with OEMs to make available solutions for all. We are not tied to one vertical.
We deliver services to any customer or line that can consume it. The firm is a system integrator. By that what we do is that we take solution from OEMs or within its IT space and delivers trunk key solutions to customers.
So our services range from providing ERP solutions to providing customer applications to customers; integrating network systems and even basis software integration for firms, whether from Microsoft, SAP, Google among others. Signal Alliance has been around since 1996, what has kept the business going because so many others have fallen by the way side? The preference rate for SMEs in the first five years of operations is about 95 per cent.
That means that once you have passed the first five years and survived, the tendency is huge that you may not go under again. I don’t know if I should say we were lucky in the first five years, because we didn’t set up to say we have enough money, people or business plan on ground like that.
But when we started Signal Alliance, I think we had some viable experiences in the industry. ICT has kept evolving over the last few years and we have been in that revolution.
First of the things that kept us going was that we had some internal management capacity and we were able project the direction the company was going and we followed through, adjusted and rose above the turbulence of the industry.
Each of the periods we needed to take decisions, we tried to look at where the industry tilts towards and that has helped us far. Indeed, lots of players have come and so many have died. I am not sure we just survived it like that, but we also did some homework and managed to forecast the future.
Now, part of my current role is to see where and what else the company needed to do to garner more market share, while delivering good products and services.
Nigeria is challenged with being an IT consuming nation, how can we bridge this? I think consumption of foreign IT would continue for a long time to come. It will never stop. Even in well developed countries they still consume ICTs that are not locally developed, which comes from other countries.
But at some point, I see the percentage of our local production improves, whether in software or somebody is building laptops or mobile phones. This process will fast track local content growth, but the fact remains that we cannot do away with foreign contributions in the industry and as an economy as a whole.
Local content will not displace foreign technologies. What do you consider as the most challenging factor as far as IT development is concern in the country? Everything in Nigeria is challenging. No sector will say it has gotten there or not affected by the challenges prevalent in the country.
You can imagine the challenge of power, poor infrastructure among others. Though, we could say it a bit more difficult for IT because the culture of creativity in IT in other advanced environment is that there is an ecosystem that helps, which is still missing in this country. The ecosystem I am talking about includes accelerators; private equities; funders at various levels, among others.
I remember that one of the most difficult challenge the ICT sector witnessed in the past is that we couldn’t get the banks to support because they don’t see IT has very important then, all they fund is a container, which is tangible and visible.
But things are changing very fast now and will still change. It was very difficult then to create a local ecosystem that allows local production of IT systems. How can ICT become a positive tool of diversification if the economy decides to move from its mono-economic status? During the rebasing, the Federal Government made a lot of noise about the contributions of Nollyhood, the technology sector.
We can say that the one of Nollyhood was that of a local content, but I see IT having much more strength in diversification if it can be well explored.
The telecommunications sector was regarded as a star performer in the rebasing and it can still do more. So I see that diversifying the economy with much emphasis on the IT industry, there would be huge improvement.
However, if you look at other industries, for instance the manufacturing sector, Dangote is building cement factory across Africa now, that sector is more or less a $1 billion industry; look at wakanow, it is enabling lots of opportunities, but the good thing in what I have mentioned is that they are really on the ICT sector to expand, so I see economic expansion and growth, if government can indeed focus on developing the sector better than as it were.
Imaging our mobile sector with about 140 million, that alone has continued to fuel eCommerce growth in the country. The smartphone is becoming an enabler for so many things.
It enables health, entertainment, trades, markets (both local and international) and others you can think about. I think we are getting to a point where our infrastructure development would revolve around the smartphones and we shall see more indigenous players coming up and jobs been created.
In all these, where do you think Nigeria’s comparative advantage lies, hardware or software? I think today, IT has gone beyond just being a software or hardware sector alone.
It has evolved into services as well. Today, what we have seen is that we see more people consume everything around IT, whether it is an IT-level business like Wakanow, Jumia or Konga.
All of them will make use of local expertise in software and ride on hardware infrastructure. So we see more hardware players too coming up in the ecosystem.
I think what we shall consume most is technology enable services because the platform is already being created. How will you access Nigeria’s ICT industry so far, looking at the new government come May 29? Let me go back a bit, when Obasanjo was the president of Nigeria, he was practically the minister for ICT because he had personal interest for ICT.
There were couples of initiatives that he launched, which I was privileged to be part of them and he showed personal interest in getting IT to government parastatals.
But the current government extended that gesture by creating a ministry, which was actually a recommendation from the International Telecommunications Union (ITU), which believed that having an IT ministry would go along to help the country achieve so major purposes.
The ministry was created, which was a step in the right direction. Indeed, in the past two to three years, ICT has helped to stir the country’s ship in the right direction.
Besides, the sector has been blessed with a good minister, who knew the job to the core and the task ahead. She has done a lot in sensitizing the industry on what is obtainable outside the country’s shore. Minister Omobola Johnson has helped to create some of the ecosystem, which I discussed about earlier.
All we need in the new dispensation of governance is to latch on what we have achieved so far. Virtually, all stakeholders in the sector are happy about her performance.
But we believe strongly that more still need to be done for the sector. So we hoped that the incoming government will keep the plan already on ground and drive it further, instead of going back to the bad days.
The fact remains that the outlook is brighter for Nigeria all we need is to make our institutions to work and give ICT a major role in the expanding economy.
We believe that given more role to ICT will make the Nigerian economy further leads the African region. What is Signal Alliance Internship programme all about? One of the biggest problems we have had in Nigeria is unemployment and we continue to shout about it everywhere. Everybody now looks to government to solve, but we believe that they alone cannot solve this challenge.
So, at some point we wanted to look at how we can create employment. Initially, when you think about Internship, it is not together an altruistic venture, because we remembered that when you are building an internship propgramme, it is better to also consider one’s own personal sustainability so that you can plan better.
The Internship we have had over the past few years has helped us to create employment for some Nigerians that are unemployed. It is also interesting to also say that even after training some, most of them have left for other jobs.
Internship has done lots for us because in diverse was it has make the company younger and is still creating lots of jobs for those whom, it would have been difficult for them to get jobs ordinarily.
If you look at the industry today, it is easier for you to get a job when you have had one before, but the most difficult aspect of it is getting people off the unemployment circle, but with the internship programme, we have done our own and lots too. We wish we can expand it. Though, we have spoken to some companies to see how the process can really help them.
It has helped in the company in diverse ways. First, it makes the company becomes younger because ICT is a young profession so if you failed to find a way around it, it will become a problem and could actually killed the company if care is not taken.
We have seen some level of stability in the company. How can government plug into this initiative for expansion purposes? Let me say, we plugged into government’s plan.
But we have people in our offices that left government Internship and came to us. If government’s own becomes easier to access, we shall always leverage on it.
The government can help if they sort of a create a kind of funding for them, where they can plugged into. From when you started as a company, can we say the ecosystem has created encouraged sustainable venture capitalist now? That world has changed since we started. All over the world the environment for start-ups has improved.
In Nigeria, as the economy opens to the world, it has helped to blend so many things together. It has become much easier for companies now than when we started.
Some of the challenges we had then, you cannot imagine them now for example getting a telephone lines, atimes we struggled to get it for close to six months.
There are times no banks wants to do business with you because your products are not tangible, so no funding for you. But the ecosystem, we have now has helped start-ups greatly to run businesses.
But that is not to say there are no problems. All we need is more collaboration, because today, the Nigerian market has become bigger, and there are changes here and there. What does Sasware mean? Sasware is a technology development firm. What we tried to do at Signal Alliance was to diversify our services. As you know the technology industry keeps evolving and we are just trying to evolve with the industry.
Our focus is to continue to do what we have been known for, while we explore new frontiers of growth. The plan of Sasware is to invest in start-up firms, in areas that is a bit difficult for them. Like I said, we are technology Investment Company, we not digressing from what we know; we are looking at areas that are mostly complementary to what we do.
At this point, we are looking for start-ups in Business to Business (B2B) ecosystem. We are almost closing an investment in a young start-up.
The company is a healthcare technology start-up. You know, like I said at the beginning, technology has become an enabler for the entire sector, including health. We are looking for companies in the financial, energy, and all other sectors, where technology can help achieve goals.
We diversify because as an entrepreneur you need not to stay in one place. You just must diversify at one-point so that you can review your previous performance and look at opportunities ahead of you in a competitive market like ours.
Diversifying is also a cure for restlessness. What value addition is Sasware going to bringing to the Nigerian economy? Firstly, my own future as an entrepreneur will rest mostly with what Sasware is doing because it will allow me to see what is happening out there in the ecosystem and to see which areas I can provide more support for the firms. I hope that it will be a platform for us to create more value addition for the economy. I will like to see Sasware in the next 10 years investing in more companies as much as possible.