As the global economy crumbles under the weight of ravaging Coronavirus, stakeholders in Nigeria’s ICT industry are seeing an opportunity for development and self-reliance amidst the challenges. SAMSON AKINTARO reports
The rising cases of coronavirus pandemic continue to hurt economies globally.
In Nigeria, economic experts have already forecast an inevitable recession as the price of crude oil, the country’s economic mainstay, continues to tumble.
The ICT industry, like every other industry that makes up the economy, is having its fair share of the pains inflicted by the pandemic as businesses and productions have been significantly disrupted.
However, the pandemic has also come with some positives for the ICT ecosystem in Nigeria. For one, the pandemic has shown the Nigerian government that building ICT infrastructure is no longer an option, but a necessity.
Start-up funding declines
One key area of ICT ecosystem that is already bearing the brunt of the pandemic is the start-up.
Nigeria in recent years had become the African hub for start-ups, many of them spurred by investments from venture capitals and angel investors from abroad. However, that growth is bound to be stagnated this year as investments slow down.
Recent forecasts have shown that the pandemic and its after-effects will result in a sharp fall in funding inflow, not only in Nigeria but also in the African tech space.
Startup accelerator, AfricArena, estimates total funding in African start-ups this year could drop by as much as $800 million or 40 per cent with a severe slowdown expected to become more visible in the next two quarters of the year.
The report’s worst-case scenario also suggests that the effects of the economic slowdown could last through 2021 with recovery only expected to come full circle by 2022.
The decline in investments, according to Mike Mompi, CEO at early-stage fund, Enza Capital, will be driven by capital providers seeking clarity on how this new normal, defined by COVID-19, will impact both the immediate prospects of potential investees and the longer-term economic prospects of some of Africa’s growth markets.
Setback for 5G
Although several world bodies and ICT regulators all over the world have debunked the wild claims that 5G technology was responsible for COVID-19, the rumour has no doubt caused a setback for the deployment of the next-generation technology in Nigeria.
Already, across Europe where deployment had started before the pandemic, operators have put further plans on hold due to the COVID-19 misinformation.
In Nigeria, the telecoms regulator, which had successfully conducted a trial of the technology last year is now back to the drawing board. In response to the hoax being spread about 5G, the Nigerian Communications Commission (NCC) is now planning to hold a public forum on the technology to get the buy-in of all stakeholders before it could issue a license to any operator for the deployment of 5G in the country.
According to industry experts, aside from the delay caused by misinformation, the COVID-19 crisis will be having some structural negative impacts on ICT investment and ROI, most notably on 5G, which will be impacted significantly in terms of network evolution, services penetration, and application usage.
It has also been forecast that business solution revenue will become more narrowly defined to those areas with an immediate need for enterprise, industrial, and government 5G customers, while emphasis will be on quick ROI and primarily cost reduction as a result of the pandemic.
Hope for ICT development
Interestingly, amidst all the challenges brought by the pandemic, stakeholders in Nigeria’s information and communication technology industry are seeing a silver lining behind the cloud.
They are optimistic that Nigeria will come out of the current pandemic with a better record in ICT development. This was the view of speakers at a recent webinar on the economic impacts of COVID-19 hosted by the Association of Telecommunications Companies of Nigeria (ATCON).
According to the Chief Executive Officer of Galaxy Backbone, Prof. Mohammed Abubakar, the pandemic has drawn the government and the private sector’s attention to ICT, adding that it has brought technology to the frontline of every discussion in the country today.
He noted that Galaxy Backbone, which is the government agency in charge of IT services, was put to task with the outbreak of coronavirus to deploy technology for all government activities.
This, he said, led to the successful hosting of the Federal Executive Council (FEC) meeting virtually.
He noted that the technology being used had always been there but most government ministries and agencies were averse to using it.
“Most of the facilities we are using now to drive e-governance and socio-economic development have been there before now but nobody would use it. But with the pandemic, the ministries have no choice but to deploy the technology. The COVID-19 is going to fast-track our ICT journey,” Abubakar said.
Also speaking at the conference, the Director-General of the National Information Technology Development Agency (NITDA), Mr. Kashifu Inuwa, said the pandemic had been helping the country to shape its digital economy as many people have now embraced doing things online.
Reduction of RoW charges
For the Managing Director of Rack Centre, Mr. Tunde Coke, one of the gains of the pandemic in Nigeria ICT industry is the reduction of Right of Way charges by some state governors.
According to him, the governors were forced to make the decisions because of the realisation that adequate telecommunications infrastructure is needed to keep their economy running during the pandemic.
Until last month, industry stakeholders had been clamouring for the harmonisation of the RoW charges across the country. Despite an existing Federal Government’s approved charges of N145 per linear meter for RoW, to allow a speedy rollout of telecoms infrastructure across the country, some states continued to charge as high as N5, 000 per metre, thus limiting operators’ infrastructure deployment.
However, in the last one month, four states including Ekiti, Imo, Katsina, and Plateau, have signed executive orders lowering the cost to the approved N145, while two, Kaduna and Kwara states have completely waived charges.
According to industry sources, the need for fast-speed internet to conduct online meetings and drive other government activities during the lockdown opened the eyes of the states’ executives to the realities of telecommunications infrastructure.
In Kaduna where the government has completely waived payment for Right of Way, the state Governor, Mallam, Nasir El-Rufai, had recently lamented that the lack of 4G network was preventing the State from holding online classes, while schools are on lockdown.
He said 3G service was only available in a few areas of the state, hence, the government resorted to using radio. This explains why the state government decided to completely remove charges to encourage speedy deployment of the needed infrastructure by telecom operators in the state.
Already, industry experts predicted a shift in business and governance activities towards digital post-COVID-19 as many have realised things could be done easily and at a cheaper cost through the internet.
IT and education reality
COVID-19 has brought to fore the stack reality of Nigeria’s educational system in relation to the use of information technology and this could also be seen as a gain if the government would promptly address the situation.
While higher institutions in other countries quickly adapted to the pandemic situation by switching to remote learning, that has become practically impossible in Nigeria due to a lack of IT facilities to drive such process.
The President of the Academic Staff Union of Universities (ASUU) Prof. Biodun Ogunyemi, was unequivocal about this reality when he recently voiced out why e-learning cannot work in Nigeria.
According to him, the nation’s tertiary institutions are not prepared for virtual learning, adding that poor infrastructure, inadequate funding and lack of requisite skills make it impossible.
ASUU in a document titled, “The Directive by the Minister of Education That Tertiary Institutions Should Resume the Session Through Online Teaching,” issued by the University of Ibadan (UI) Publicity Committee, insisted that virtual learning was impossible in Nigeria’s institutions.
According to the body, “e-learning is not as simple as computerisation, supplying computers and accessories, or simply connecting institutions to the Internet.
“There is no Nigerian university that operates any form or model of e-learning because of poor Internet access, high bandwidth costs, and irregular power supply. On what infrastructure does the minister expect the online delivery to run?”
While the pandemic has pointed out areas of ICT infrastructure deficiencies, the country can turn this into gains by deploying resources to address some of the challenges, which have been with the country for years but neglected.
The reduction of RoW charges should not be limited to a few states but a nationwide policy to fast-track the deployment of broadband infrastructure across the country.