By John Ikani
A recent study commissioned by the Nigerian Communications Commission (NCC) has brought to light a critical aspect of Nigeria’s telecom industry.
According to the study, a mere 16% of the hardware components used in the country’s telecom sector are locally sourced, with a substantial 84% being imported from foreign markets.
The final report of this study, which examines the level of indigenous content in Nigeria’s telecom industry, underscores the heavy reliance on foreign equipment and devices, with minimal contributions from the domestic technology sector.
This over-dependence on foreign hardware raises concerns for Nigeria’s national security, prompting a call for the development of local capacity in telecom equipment.
Furthermore, the report reveals that Nigeria has not played a significant role in the development of software driving the telecom industry, despite commendable achievements in software development, particularly in payment systems.
Highlighting the key findings of the study conducted under the auspices of NCC’s Research and Development Department, the report states:
“Study findings show that up to 84% of the hardware is of foreign origin while only 16% is manufactured locally in Nigeria. Critical equipment such as Base Transceiver Stations are mainly procured from overseas manufacturers.”
While acknowledging successes like Remita by SystemSpecs Limited for Treasury Single Account (TSA) management, the report emphasizes the need for replicating such accomplishments within the telecom industry.
In addition, the report recognizes successful indigenous software solutions outside the telecom sector, such as e-Government Operation Solution (eGOS) by Connect Technologies Limited and iX-Trac by Infosoft Nigeria Limited, highlighting their capability to compete with foreign counterparts.
On the human resource front, the study reveals that the Nigerian telecom industry is predominantly staffed by Nigerians, with a staggering 97% of the workforce being of local origin. However, it is noted that the majority of Nigerian employees hold junior and mid-management positions within various companies.
The report further expounds: “The Nigerian telecommunication operators employ around eight thousand people directly and around three million indirectly. Although direct employment is easier to quantify, indirect employment has a wider and more profound impact.”
This indirect employment encompasses a range of roles, including equipment sales, infrastructure deployment, advertising, marketing, public relations, and security personnel responsible for base station protection.
At the grassroots level, it involves mobile service resellers, technicians, recharge card distributors, retailers, phone booth operators, and street vendors.
The NCC emphasized in the report that increasing local content in key sectors of Nigeria’s economy, such as telecom, can significantly contribute to achieving the United Nations’ Sustainable Development Goals (SDGs).
This approach can also enhance the local economy, reduce project costs, ensure infrastructure maintenance, and, most importantly, create job opportunities.
