Business

Nigeria set to acquire another satellite

N3.1bn earmarked for NigComSat 2

Ten years after the replacement of the country’s first communication satellite, NigComSat 1, the Federal Government has budgeted N3.1 billion for another satellite, NigComSat 2, this year. According to the approved 2021 budget, this will be the main capital project for the country’s satellite company this year.

This is coming even as stakeholders continue to lament the underutilisation of the current satellite, NigCom- Sat-1R. The replacement satellite, which was launched in 2011, has a lifespan of 15 years, meaning that it has five years left. Aside the new satellite project, the satellite company will also this year spend N500 million on the upgrade of its ground station, according to the 2021 budget.

Before his exit in 2019, the immediate past Minister of Communications, Barrister Adebayo Shittu, had insisted that Nigeria needed two new satellites to act as a backup for the current one. He had announced plans to approach China-Exim Bank to secure a loan of $550 million for the purpose.

This, however, met stiff resistance from stakeholders, who argued that the current satellite operated by the country had been a wasted investment as it is not profitable and being underutilised. Shittu had defended his position saying that “the Federal Government cannot enforce local hosting of data on the lone satellite because, without a backup, the nation stands the risk of losing data on it, in event of a crash. If we are able to get two more satellites, we will be able to put legislation in place that will compel government ministries, departments, and agencies, MDAs, to patronise this local service provider.

When that is done, nobody will have an excuse to take Nigeria’s resources outside the country.” It is estimated that every year, digital mobile operators and telecommunications companies in Nigeria spend over $2 billion in getting satellite services from foreign groups. However, the operators and even some government establishments have not been patronising the country’s satellite company.

The telecom operators have cited the high cost of access as one reason the satellite is being shunned. According to them, the cost of obtaining services from the nation’s satellite is far higher than what they get from foreign facilities. According to the 2021 approved budget, the satellite company is to draw the sum of N7.9 billion from the national purse this year. Out of this amount, N2.7 billion, representing 34 per cent, is for recurrent expenditure, covering payment of salaries and wages of the company’s staff for the year. The remaining N5.3 billion is for capital project. While calling for its privatisation, some stakeholders have described government’s yearly spending on the satellite company as wasteful.

A study of Nigeria’s budgets from 2009 to 2020 reveals that up to N43.5 billion had been allocated to the company. Figures from the office of the accountant-general further show between 2011 and 2017, N13.3 billion was released to it for capital expenditures, out of which it spent N12.6 billion. Disturbed by the state of affairs of the company, the Minister of Communications and Digital Economy, Dr. Isa Pantami had, one month after his assumption of office in August 2019, directed the agency to get an International Standard Organisation (ISO) certification.

That same week, at its strategic retreat, the minister said the only reason there have been arguments on whether to privatise or further commercialise the agency was because it is admittedly not “very viable.” Similarly, the Chairman of the House Committee on ICT, Abubakar Lado Suleija, had lamented during his recent visit to NigCom- Sat’s Abuja headquarters that its potential to generate revenue and create jobs have not been realised as it has in other countries.

Nigeria’s first communications satellite, NigComSat-1, was put in orbit in May 2007, but deorbited in November 2008 follow-ing a power fault. However, the country’s presence in the communications satellite industry was not jeopardised for too long as some insurance arrangements made it possible for a replacement satellite, known today as NigComSat-1R, to be built by the China Great Wall Industries Corporation. The replaced spacecraft was successfully launched into orbit in December 2011 amid high expectations among Nigerians. With a communication satellite in orbit, Nigerians expected reduced cost of Internet access; bridging the urban and rural digital divide; improving broadband connectivity in homes, offices, businesses, and schools; and boosting elearning, telemedicine, e-government, agriculture, public safety, and security, among other benefits.

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