Repositioning Nigeria’s telecom sector with renewed strategy

AJAGBE ADEYEMI TESLIM

SPONSORED BY: H&H

The approach to repositioning Nigeria’s telecom industry to meet global standards is taking a new dimension with renewed hope as the Ministry of Communications, Innovation & Digital Economy is putting up new strategies that will enhance innovation and the digital economy. Abolaji Adebayo analyses the strategies.

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For the progress and innovation of the sector, the Minister of Communications, Innovation and Digital Economy, Dr. ‘Bosun Tijani presented a strategic blueprint that will guide the government and other stakeholders in repositioning the industry.

According to the minister, “This document is a critical launchpad in our journey towards a Nigeria that thrives in the digital age in alignment with the Renewed Hope Agenda of President Bola Ahmed Tinubu. As we reflect on our rich history as a country and today’s dynamic challenges, our path to greatness will be forged through a clear vision, constructive collaboration, and a commitment to our common good. This strategic blueprint articulates a vision for Nigeria that builds on the transformative power of digital technology and innovation to diversify and deepen our economy.”

The sector

Though telecommunication is one of the sectors that has been growing in strength in Nigeria, its growth is still below the expectation considering the development of technology across the world.

The industry has been facing various challenges including cybersecurity and online fraud, regulatory burden, multiple taxation, vandalism of telecommunication infrastructure, right-of-way challenges, access to foreign exchange, and inter-industry indebtedness, among others. These have been the major bottlenecks hindering the progress of the sector.

For optimum performance of the sector, there is a need for the government, working in collaboration with the stakeholders, to reposition the industry hence, the creation of a roadmap to build innovation in the telecom sector and accelerate the diversification of the Nigerian economy by enhancing productivity in critical sectors through technological innovation.

Target

“In a world where digital transformation and innovation is fast becoming a catalyst for economic progress, we are at a critical moment as a nation in our journey towards a more inclusive and prosperous future. The intersection of a strong digital economy and our innovative and youthful population presents us with a unique opportunity to chart a course toward prosperity, inclusion, and global relevance.

“President Tinubu’s Renewed Hope Agenda has at its core, a recognition of the power of technology and innovation as enablers of economic growth and development. It is a call for us to take advantage of the opportunities presented to us with a spirit of determination and conviction,” the minister stated.

Strategy

To achieve the target in the economy recovery through a robust telecom and industry with innovation, the minister has set us a framework that encompasses five key pillars that include Knowledge, Policy, Infrastructure, Innovation, Entrepreneuship & Capital (IEC), and Trade.

Each pillar, according to the minister, is integral to the mission and interconnected with others, forming the foundation of the strategy.

He said: “Knowledge is the cornerstone upon which innovation thrives, and is built upon the bedrock of sound policies. Infrastructure provides the essential backbone for a thriving digital economy, while innovation and entrepreneurship drive economic

diversification. Trade, the fifth pillar, represents our commitment to global collaboration and partnerships, recognising that innovation knows no borders.

“As we embark on this transformative journey, we do so with an unwavering sense of purpose. We understand that the road ahead may be challenging, but it is through these challenges that we find the impetus to evolve and adapt. Together, we will harness the power of technology to elevate Nigeria’s standing on the global stage, create sustainable employment opportunities, and improve the quality of life for all Nigerians.

I extend an open invitation to all stakeholders, both within and outside government, to unite in this collective endeavour. It is our shared vision, ambition, and commitment that will drive us towards a Nigeria that not only embraces the digital age but leads it.

Let us rise together and seize this moment in our history to shape a future that we can all be proud of.”

Agencies

The agencies that will implement the strategies to achieve the set goals include Galaxy Backbone, which provides reliable ICT infrastructure, broadband network, database management, collaborative platforms, and related services to all government agencies to facilitate efficient e-government operations and digital transformation; National Communications Commission (NCC), established to regulate and promote investment in the telecommunications industry, ensuring fair competition among operators, consumer protection and the development of a robust and inclusive communication network; the Nigerian Communications Satellite Limited (NigComSat) operates and provides satellite communication services, supporting technological development and facilitating national and global connectivity. Nigeria Data Protection Commission (NDPC) is another agency under the Ministry that oversees the implementation of the Nigeria Data Protection Regulation towards safeguarding the rights of natural persons to data privacy, preventing manipulation of personal data, and ensuring that Nigerian businesses remain competitive in international trade; Nigerian Postal Service (NIPOST) provides efficient and affordable postal services, promotes the use of digital technology and develops new products and services aimed at increasing market share and creating new markets in the postal sector.

The National Information Technology Development Agency (NITDA) is saddled with the responsibility of developing, regulating, and promoting the technology sector by driving digital innovation, capacity/talent development, policy formulation, and public-private partnerships to ensure universal access and technological advancement; while

Universal Service Provision Fund (USPF) was set up to promote universal and affordable access to telecommunications services in underserved and unserved areas, bridging the digital divide and facilitating greater social equity and inclusion.

With all these agencies, repositioning the industry seems seamless. Stakeholders urged the government to ensure each agency is given the autonomy to do its job, saying regulatory capture as experienced during the former regime will yield no result.

An intuitive approach to increase Nigeria’s national output is to increase factor inputs (Labour and Capital) but multiple major economic theories recognise the central importance of ongoing technological progress and efficiency gains for increasing national output and income. Some of these justifications include the fundamental economic model of Cobb-Douglas Production Function which shows that improved Total Factor Productivity (TFP) directly increases output without added inputs. (Cobb & Douglas, 1928 ). Schumpeterian Growth Models also argued that sustained growth requires “creative destruction” from disruptive innovations and technologies (Schumpeter, 1942 ).

Likewise, Solow Residual Theory showed that TFP, not inputs, explained most economic growth in advanced countries, and raising TFP will increase output when capital growth slows in countries like Nigeria (Solow, 1957 ). Endogenous Growth Theory also shows that TFP is the key driver of sustained economic growth rather than just capital accumulation (Romer, 1990 ).

Similarly, a more recent New Growth Theory demonstrates that economic growth is driven by “recipe accumulation” as new ideas and technologies boost productivity i.e., policies that promote innovation and technology adoption will increase TFP and subsequently increase national income (Romer, P.M. (1990).

The pillars

As earlier explained, the strategies to reposition the sector are based on five pillars as presented by the Minister.

Knowledge

In the rapidly interconnected world, knowledge is the foundation upon which countries build a robust and sustainable economy.

“As a critical prerequisite, knowledge influences how we generate innovations and technologies that drive economic growth, expand the talent pool to drive competitiveness, improve productivity, and inform evidence-based policymaking, amongst others.

“As a Ministry, our mandate of contributing to the diversification of the Nigerian economy through enhanced technical efficiency facilitated by technological innovation rests on the effective application of knowledge. To this end, knowledge forms the critical foundation of our strategic blueprint for the next four years.”

With this strategy, the government targets to accelerate the growth of Nigeria as a global technical talent hub and net exporter of talent; deepen and accelerate Nigeria’s position in global research in key technology areas; and raise the complexity and dynamics of its economy by significantly increasing the level of digital literacy across the country.

Policy

Tijani stated that the government will come up with policies that will enable innovation, entrepreneurship, and inclusive growth.

“When properly designed and executed, the policy provides a platform for innovation and entrepreneurship to thrive. Effective policy provides regulatory clarity and necessary incentives for an environment where businesses and innovators are empowered to grow. Over the next four years, our policies will focus on encouraging investment, research and development, and the protection of intellectual property. By so doing, we will attract talent and investment to stimulate our innovation ecosystem. In addition, this pillar will prioritise the use of policy to drive universal access to the benefits of a dynamic digital economy.”

Infrastructure

On infrastructure, the government indicates its commitment to building the critical infrastructure required to power a strong digital economy, recognising that economic prosperity is linked to a robust digital foundation.

“Our emphasis on building stronger digital infrastructure extends beyond connecting people but also focuses on economic empowerment and creating opportunities for inclusion. With improved access to quality broadband, and upgraded critical services, this pillar will catalyse a digital transformation that impacts our entire population.

“We will connect communities and businesses by implementing our broadband strategy to ensure that everyone is carried along. Managing our spectrum efficiently will create pathways for the growth of new technologies and improve access to government services. Our plans for our postal service and satellite communication infrastructure re-affirm our commitment to leveraging improved digital public infrastructure to deliver inclusive economic growth for all,” Tijani said.

IEC

In the rapidly evolving global technology landscape, innovation, entrepreneurship, and access to capital are critical components of a strong digital economy. With this strategy in place, the government is providing a roadmap for Nigeria to harness the potential of these three pieces as catalysts for the transformation of the digital economy.

The strategy is said to be the driving force behind the creation of an environment that encourages innovation, supports entrepreneurship, and attracts the required capital to deliver on its ambitions.

“In this pillar, we outline a set of initiatives that recognise the importance and necessity of these 3 inputs—innovation, entrepreneurship, and capital—for delivering a vibrant and inclusive digital economy. This forward-looking approach keeps our innovation ecosystem ahead of the curve and future-proofs our economy.”

The Minister said the objective is to stimulate the growth and sustainability of startups, with a specific focus on those developing innovative solutions for critical sectors in the economy.

Trade

By Trade as a strategy, the federal government is showing commitment to position Nigeria as a major player in the African and global technology ecosystem. As a rapidly growing economy, with the ICT sector contributing 18.44% to Nigeria’s GDP in Q2 2022, and e-commerce spending projected to grow to $75 billion by 2025 (Statista), the primary goal is to enhance Nigeria’s participation in the global technology trade over the next four years.

“A core part of this pillar is our aim to improve Nigeria’s ranking in the ECI (Economic Complexity Index) Technology Index. This pillar articulates our plan to leverage technology trade as a catalyst for economic growth and collective regional prosperity. Through deliberate partnerships, novel trade policies, and investments, we will strengthen our position as a top technology centre that provides strong leadership in defining Africa’s digital future.”

Last line

While it is believed to be the right approach to reposition the telecom industry, stakeholders harp on strict implementation to achieve the target goals.

Culled from New Telegraph