With the National Broadband Plan, the federal government aims to increase broadband penetration to 30% by 2018. How do you assess the progress to date?
Since implementation of the National Broadband Plan, Nigeria's broadband penetration has grown from 5.46% in 2011 to 8% in 2014. It is with this in mind that we will continue to drive our National Broadband Strategy that seeks to increase broadband penetration from 8% to 30% by 2018. This will be made possible by extending our 3G/LTE Wireless Broadband Coverage to 80% of the population, expanding fixed broadband to 16% of the population based on fiber by 2018, with minimum download speeds of 1.5 Mbps. The licensing of infrastructure companies (InFraCos) is on-going. InFraCos will provide efficient wholesale bandwidth services on a non-discriminatory, open-access, and price-regulated basis as well as provide metropolitan fiber and transmission services across Nigeria.
There is a lot of progress being made on the broadband initiative right now, as reflected by larger broadband penetration and lower costs of broadband subscription, which have fallen from NGN93,000 ($520) in 2011 to NGN55,000 ($308) in 2014. We now have 4G across the major cities of Nigeria.
If we continue at this pace in terms of infrastructure, we should see 100% mobile penetration and broadband penetration will hit 50% by 2020. More Nigerians will have access to better download speeds of over 1.5Mbps. But the key thing is to get all the obstacles for investment out of the way and encourage investment in the broadband infrastructure in this country—that is what we are doing. We have identified several bottlenecks that impede roll-out of needed infrastructure as well as ubiquitous access and quality service delivery across the country. These bottlenecks include multiple taxations, right of way (RoW), high charges, multiple taxations, vandalization of critical infrastructure, and destruction of telecoms equipment including tampering with base stations critical for facilitating access to telecoms services. We conducted research some time back that revealed that RoW charges, levies, and taxes imposed on telecoms operators contributed to about 70% of the cost of rolling out infrastructure in several states.
To address these issues, the Ministry has initiated and is promoting the Smart States initiative. The aim of the Smart States initiative is to ensure that effective measures are adopted to remove arbitrary charges and eradicate multiple taxations across the nation. The initiative is geared at engaging governors and relevant authorities at the state and federal level to address the bottlenecks impeding the development of critical infrastructure roll out across Nigeria. Through the initiative, the Ministry is helping to ensure that effective measures are adopted that would significantly reduce Right of Way (ROW) fees, standardize state levies and taxes on ICT infrastructure, and consolidate licensing through the “Dig Once, Pay Once" philosophy.
Bayelsa, Cross River, FCT, Lagos, and Ondo States have signed memoranda of understanding (MoUs) that will eradicate multiple taxes and are now “Smart States." Anambra, Delta, Gombe, and Osun States have agreed to cooperate with government to become “Smart States." Lagos has been an exemplar with the reduction of RoW charges by 85%. This move reduced RoW charges in Lagos from NGN3,000 ($17) per meter to NGN500 ($2.80). We have also estimated that for Nigeria's data revolution to take off, at least $25 billion is needed over the next five to ten years.
Promoting local content in the ICT sector is a key focus of the Federal Ministry of Communication Technology. How is the Ministry promoting indigenous participation in the ICT sector?
The ICT sector has plenty of potential to create jobs and wealth as well as contribute significantly to the growth of the Nigerian economy. Improved indigenous participation in this increasingly strategic industry is a key part of our achieving this potential. We are tackling the current poor participation of locally-based firms in the ICT industry through a raft of recommendations contained in a major policy instrument called “Guidelines for Nigerian Content Development in the ICT Industry," released in December 2013. Specific intentions for the Guidelines include: providing temporary measures to encourage growth of the local ICT industry; improving standards and quality assurances on offer from the local ICT industry; encouraging a more balanced share of the market between domestic and international brands; increasing the availability and reducing the cost of devices required to create a knowledge-based interconnected economy that leverages the internet; and improving security and control of government data. The guidelines were developed after several separate and sub-sector specific stakeholder engagements and will be periodically reviewed in consultation with industry stakeholders. The review period and input will be guided in part by changes in global trends and practices in ICT and Nigeria's developmental aspirations. A newly created Office of Nigerian Content in ICT (ONC), headed by a National Coordinator, will affect the implementation of the guidelines. In addition to this significant policy initiative, the government has committed $9 million in seed capital to a first-ever Nigerian ICT venture-capital (VC) fund. The first round of the fund recently closed at $16.2 million and the fund will be managed by Silicon Valley industry veteran Echo VC. The intention is to provide a small part of the very scarce risk capital that our technology entrepreneurs are currently having such difficulty in finding as well as to help give the VC funding industry in Nigeria a badly needed kick-start. Further rounds will aim to reach a target of $50 million, and it is anticipated that via a knock-on effect, the fund will create up to 35,000 jobs.
Could you shed light on the opportunities that exist for foreign investors to invest in Nigeria's ICT sector and the way in which the Federal Ministry of Communication Technology is providing an enabling environment for this?
Connect Nigeria is one plan to develop a ubiquitous, robust, and cost-effective ICT infrastructure as well as ensure that Nigerians have affordable and reliable access to ICT devices and have the capacity to use them. In terms of local content, we aim to lower the barriers to entry, increase the participation of Nigerian companies in the ICT sector, and stimulate job creation in the industry. Regarding ICT in government, we seek to increase the adoption of ICTs by government to achieve greater transparency, efficiency, and productivity in governance and citizen engagement.
Complementing the above initiatives, we have also instituted practical policy guidelines rolled out after due consultation with key industry stakeholders, establishing and maintaining a suitably enabling environment that seeks to ensure our current impressive growth rates are sustained.
The National ICT policy (2012), crafted from the many disparate policies and guidelines that existed prior to this Ministry's establishment, is a prime example. Our Broadband Plan was created by a Presidential Committee, made up of industry professionals, and its rollout is being managed by a similarly constituted Broadband Council. Regarding the development of Nigerian content, we have an advisory council pulled from the private sector, and periodic reviews are built into its design to reflect current thinking in the ICT industry as long as they continue to benefit the local industry.
Our guidelines in Nigerian content also seek to ensure additional value is created locally and that the valuable partnerships we have with multi-national ICT corporations are more collaborative, growth-oriented partnerships. This will help us create more growth areas in local ICT hardware assembly, telecoms infrastructure, data-storage centers, software development and human-capacity development.
The federal government has aimed to become one of the twenty biggest economies in the world by 2020. To what extent can Nigeria's ICT sector serve as a catalyst for the achievement of the Vision 20:2020?
It is a sector that is gaining more and more prominence over time. It is important because ICT companies now contribute about 10% to Nigeria's GDP. Contribution to GDP has increased in four years from 5.46% since the Ministry's creation in 2011 to 9.58% in Q3 2014. This marks 24% annual growth, making it the 4th fastest growing sector in the economy. There is no sign of this growth abating, especially in light of new policies and programs of the Ministry of Communication Technology. Even more than that, it is a strategic area because in addition to what the ICT sector on its own contributes, the ICT sector enables a 2.6% value-add to other industries. It is also significant in terms of diversification of the economy. If you look at the contribution of ICT to GDP, which is 10% and has grown at a double-digit rate in the last five years, it is clear that the ICT sector provides a great opportunity for Nigeria to be a much more diversified economy. The Nigerian telecommunications sector is one of the fastest growing sectors in the world. Total mobile subscriptions increased to 134.5 million as of September 2014, from 95 million in 2011. Tele-density increased to 96% in September 2014 from 68% in 2011, while the total mobile internet subscriptions increased to 73.8 million as of September 2014 (from 45 million in 2011). Internet penetration increased from 26.5% to 52% over the same period. The ICT sector is now viewed as a critical sector to the economy, on a par with the oil and gas sector. The improved environment assured by President Goodluck Jonathan's Transformation Agenda has helped create local companies that are innovating and adding value to the Nigerian economy. The Nigerian Telecoms sector is one of the fastest growing sectors in the world and continues to attract significant FDI. So its role as a catalyst for the economic growth that will ultimately lead us to becoming one of the twenty biggest economies in the world by 2020 is key and is one that we as a Ministry are continuously striving to cultivate and grow.