Driving national development through telecommunications

By Tosin Omoniyi   |   12 November 2015   |   5:01 am  

TelecomTHE private sector is regarded as the engine of growth especially for those who subscribe to the free enterprise, Western capitalist economic orientation. This orientation subsists on the parallel principle that government has no business in business. In developed and developing economies, therefore, it is presumed that government’s major preoccupation should be to provide the enabling environment for private investors to operate.

The policy of economic deregulation and liberalisation pursued by the Obasanjo’s administration through the National Council on Privatisation (NCP), and the Nigerian Investment Promotion Commission (NIPC),   helped to open up new windows of opportunity to foreign investors who had the financial and technical capability to venture into Nigeria’s often exceedingly risky terrain. This drastic step freed up the telecoms sector from the hitherto state-run monopoly of NITEL, and threw open the market for interested and capable private entrepreneurs.

The overriding aim of diversifying an economy which had overbearingly become dependent on oil revenues and which was being undone by public sector corruption and associated vices also influenced the government’s reform initiatives.  In spite of its oil wealth, Nigeria’s huge population has remained significantly poor, with high unemployment levels, low public sector productivity and decayed social and physical infrastructure. Underperforming public sector companies and institutions were liabilities, adding little value, yet constituting the burden of cost on the financial resources of the nation.

Since 2001, the telecoms sector has become the largest generator of Foreign Direct Investment (FDI) after the oil and gas industry in Nigeria. It has effectively displaced agriculture, manufacturing, solid minerals and textiles in terms of revenue and prospects. In a bid to provide an enabling environment for the inflow of FDI, the Federal Government grants incentives and gives priority to a sector which has brought so much technology, knowledge and other social benefits to the country.

Consequent upon the follow up economic liberalisation and reforms and the subsequent build-up, FDI in the telecommunications industry came to about $32 billion as at February 2015, with the sector contributing about nine per cent of the nation’s gross domestic product. Statistics as at August 2015 showed an active voice subscriber base of about 151 million; teledensity of about 108 per cent; and 93 million internet subscribers (as at July 2015).

The adoption of the public and private partnership (PPP) model in the management of the telecoms sector can be described as highly successful. Indeed it has long become a reference point as to how a mutual collaboration of the government and private entrepreneurs could yield success and benefits.

The mutual cooperation of a public regulator and private investors has been the principal factor behind the astronomical success of the mobile telecommunications sector. The synergistic combination of resources, both human and material now signposts telecoms as a management model worthy of being applied to many other sectors of the economy that have failed or are failing.

Enacting enabling legislation, the government set up the NCC with the necessary administrative and oversight competence to manage a coterie of private investors who have the technical and financial competence to drive the envisaged development outcomes for the sector. Essentially, the model gave rise to public and private sector engagement to deliver policies, services and infrastructure. It has fitted closely with Nigeria’s “mixed economy” model.

The public-private sector driven economy is a hybrid that serves to take the best of two management methods and with respect to telecoms, it has helped to reduce poverty, enabled wealth creation, increased employment levels both directly and indirectly, and decreased dependence on oil revenue. This is in spite of the deficiency in core infrastructure such as electricity which poses a challenge to the developmental aspiration of the government and the citizenry.

In addition, it has galvanised Nigeria’s status as an emerging economy to the level of a knowledge economy where transactions, operations and data management are fast migrating to the digital board. It is lowering the cost of doing business through simplifying communications and logistic processes as well as cutting down budgets on overheads.

In the era of broadband ICT services, more far reaching investments are expected to take progress in the ICT sector to the next level. There is great potential for private sector development in this country but the environment needs to be improved especially with respect to security and infrastructure. Funding commitments as well as enhanced capacity for regulatory oversight are necessary towards the attainment of national development priorities.

In view of the ability of an ICT enabled, globally competitive private sector to access new markets, attract investments, generate employment and economic opportunities, reduce poverty, create wealth for sustainable economic growth and enable the development of an information and knowledge based economy, there is need for continued collaboration and partnership. Such a partnership has proved so far to be in the best interest of the nation and her people.

As the largest economy on the continent by GDP, it is amazing that Nigeria does not even rank among the top 10 performing economies which include: Mauritius, South Africa, Rwanda, Botswana, Namibia, Cote D’voire, Zambia, Seychelles, Kenya and Gabon in respective order. According to a survey by the World Economic Forum, these nations, unlike Nigeria, depend on agriculture, mining, tourism and technology to drive their prosperity. With ICT and the appropriate political leadership, Nigeria should soon lead from the front.
Omoniyi is a 35-year-old public affairs commentator who lives in Abuja. jadeoneus@gmail.com 08030833452.



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