Maritime to contribute 25 per cent of budget, says Amaechi

Maritime to contribute 25 per cent of budget, says Amaechi

The Federal Government  has said it expects the maritime sector to contribute at least one quarter, or 25 per cent of the total  funding of the national budget next year.

The Minister of Transport, Rotimi Amaechi who spoke yesterday in Lagos, said  the government has set N500billion revenue target for agencies in the maritime sector to be able to achieve this target.

The minister said he would seek the permission of the President to send away any chief executive officer that failed to meet his agency’s mark.

Amaechi made this known in his keynote address at the Maritime Summit 2016 jointly organised by the Nigerian Shippers Council and Tell Communications Limited at the Federal Palace Hotel, Victoria Island in Lagos .

Speaking during an interactive meeting organised by the Nigerian Ports Authority (NPA), he said almost 10 years  after the NPA surrendered its cargo handling functions to private terminal operators,  ”the ports are not looking good.”

He said the Federal Government will always respect the provisions of the concession agreement it entered into with the concessioniares, stating that it would carry out competence and performance audit on each of the terminals to see where they have erred in law and apply sanctions where applicable.

Amaechi said the government of President Muhammadu Buhari  has also concluded arrangement to conduct performance audit of all the agencies in the maritime sector  to determine how much funds they are generating and contributing to the budget.

An audit firm, Amaechi said, has been contracted to carry out the exercise.

The Federal Government, he said, is determined to move the maritime sector forward and make the nation’s sea ports the hub in the sub-region.

The maritime  sector, Amaechi said, generates a lot of money every year, without a corresponding contribution to the budget, stressing that it required improvement on the nation’s sea ports.

Other critical stakeholders who spoke at the forum said some of the terminal operators have not added the expected value to their services and terminals since the ports were handed over to them.

Deliberate violation of the concession agreement by the terminal operators, huge demurrage charges, extortion by security agencies, lack of synergy between various government agencies  at the ports and other sundry challenges were identified as factors that are not making the  uncompetitive and unattractive for business.

The uncompetitiveness of the ports, the stakeholders said, has made it difficult for the ports to attain world-class status.

The ports, according to them, are still burdened with bureaucratic glitches, periodic technical blackouts and duplication of processes by a plethora of government agencies at the port

The minister assured the stakeholders that the problems would be addressed by the government through the review of the concession agreement.

A committee, he said, has been set up to reassess the gains of ports reform and make recommendations for refocusing and fast-tracking it in line with the Change Agenda of President Buhari’s administration.

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Ex-minister to build refinery in Lagos

Ex-minister to build refinery in Lagos

A former Interior Minister and Executive Chairman, Genesis Shipping Worldwide, Capt Emmanuel Iheanacho, is to float a refinery in Lagos to boost local participation in crude oil lifting, it has been learnt.

The parcel of land for the facility, it was gathered, was bought from the Onisiwo Family of Irede, a coastal town at the back of Apapa Port, Amuwo-Odofin Local Government in Lagos.

When The Nation visited the site at the weekend, some leaders of the area said they were in support of the project and urged the government to support it.

A senior official of the Department of Petroleum Resources (DPR), who craved anonymity, said Iheanacho, who is also the Executive Chairman of Integrated Oil and Gas, had been given permission to build the refinery.

When the refinery begins operations, the official said, indigenous shipowners would be able to participate in the lifting of crude oil from it. “Foreign vessels involved in offshore operations, collect a minimum of $5,000 daily. This is the least amount collected by foreign vessels on the nation’s waters and that is why the indigenous ship owners must be empowered to participate,” he added.

The country, he said, is losing N1.8 trillion yearly to foreign ship owners and their choice of insurers over the indigenous companies in the lifting and importation of fuel.

The project, the DPR official said, would end foreign domination in the capital intensive crude oil lifting business and allow indigenous ship owners to participate in the highly lucrative enterprise.

The Part II of Coastal and Inland Shipping (Cabotage) Act of 2003, stipulates that “a vessel other than a vessel wholly owned and manned by a Nigerian, built and registered in Nigeria shall not engage in the domestic coastal carriage of cargo and passengers within the coastal territorial inland waters, of any point within the waters of the exclusive economic zone of Nigeria.”

The Nigerian Maritime Administration and Safety Agency (NIMASA) is responsible for the enforcement of the Act.

“Despite the Cabotage Law, Nigeria is losing N1.8 trillion yearly to foreign ship owners in cargo haulage. Under the law, coastal trade is reserved for indigenous ship owners; their foreign counterparts are allowed to participate in the business subject to a waiver by the Federal Government,” he said.

He continued: “The law is not serving its purpose because the indigenous ship owners are not allowed to handle cargoes that pass through the nation’s waterways.

“When the Cabotage regime came on stream, the intention was mainly to stimulate the development of indigenous capacity in the Nigerian maritime industry, if many years after, the situation remains the same despite the despite the efforts by NIMASA.

“In the oil and gas industry, Nigeria has close to 500 oil wells. For each well, there is a  rig, which is supported by a minimum of five ships, and they are called oil support vessels. Each of the foreign ships earn $5,000, while others earn $150,000 per day.”

He said:“The Cabotage Act seeks to reserve domestic coastal trade or Cabotage trade within Nigerian coastal and inland waters to vessels built and registered in the country, wholly owned and manned by Nigerian citizens. Foreign-owned vessels and companies are, however, allowed to participate in Cabotage trade within Nigerian waters, subject to obtaining a waiver and or license from the Federal Ministry of Transport.

“More than 10 years after, not much has changed, as the indigenous vessel owners, who the law was designed to protect remained sidelined and impoverished while foreign shipping companies dominate the trade, while many Nigerians are jobless.’’

He added:“I can say conveniently that even in the crude oil carriage that they do today, if indigenous ship owners are allowed to do 60 per cent of their own allocation, they will be putting back more than about N1.5 trillion or N1.8 trillion into the economy and that is huge contribution to the budget.”

The ex-Minister also told The Nation at the week-end that the indigenous ship owners are yet to benefit from the Cabotage shipping regime.

He said the Act has failed to give the envisaged financial impetus and active participation in the nation’s maritime trade to indigenous ship owners.

Apart from identifying the inclusion of waivers clause as one of the factors militating against the Cabotage Act,  he said the low investment in the local refinery has made indigenous ship owners vulnerable in competing with the International Oil Companies (IOC).

Although, he said, he was not against foreign companies in the country, the Master mariner said most of the foreign ship owners are hiding under the provision of waiver in the Cabotage law to enjoy the lifting of the crude and use foreign crew instead of employing Nigerians to man their vessels.

By the time the refinery comes on stream, many indigenous shipping companies would be involved in the coastal trade and not less than 5,000 direct and indirect jobs would be created through the venture.

Ihenacho said he has since received a licence to establish the refinery, adding that construction work would commence once he gets the government nod to do so.

He said he was not happy that “Nigeria, as the giant of Africa, still exports crude overseas for refining and re-import same.”

The former Minister said the planned refinery would be built in accordance with the dictates of the Department of Petroleum Resources and the Ministry of Environment.

Officers of the Ministry of Environment, he said, had visited the site of the project for them to receive Environmental Impact Assessment Certificate.

“We have said it for so many years those indigenous ship owners should be involved in crude oil lifting, but nobody seems to be listening because of involvement of the IOC. Now, we have resolved to build a modular refinery in Lagos so that we can add value and create jobs. This is what we have embarked upon. I have a licence to establish a refinery. By the time we commence operation, the ships we bought with several millions of naira can now be put to use effectively.

“Before granting licence to establish a refinery, DPR must inspect the proposed site. This they have done. There is a licence for every stage; to establish, to construct and operate a refinery, all dependent on your ability to fulfill stipulated requirements.

“Our focus now is to address the issue of Environmental Impact Assessment, feasibility study and all. We have been carrying the host community along and they are pleased to be a part of this project. The project will be financed by Nigerian and international financial institutions,” Iheanacho added.

He said the country had for years, diverted its funds by allowing crude to be shipped by foreign vessels on a Free on Board Basis.  He added that the value on the crude oil in terms of the refining process by way of jobs creation had also been lost to other countries.

“The profit from all these ventures is left in foreign lands. It is time we invest in our country and develop it. If we are successful at this venture, refined petroleum will be much cheaper than what we are paying for currently,” he said.

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Dangote takes over Tiger Branded Consumer Goods

To revert to Dangote Flour Mills

Alhaji Aliko Dangote’s Dangote Industries Limited (DIL) has acquired 65.6 per cent majority equity stake in the former Dangote Flour Mills Plc, now rebranded Tiger Branded Consumer Goods (TBCG) Plc, from Tiger Brands Limited, the South African core investors.

A cross deal for the transfer of more than 3.28 billion ordinary shares of 50 kobo each of TBCG from Tiger Brands Limited to DIL was struck on Monday at the Nigerian Stock Exchange (NSE). The cross deal was struck through the negotiated cross deal window of the NSE at N1.24 per share.

The negotiated cross deal implies that the buyer and the seller had agreed on the transaction and came to the stock market for formalization of the transaction. Negotiated window at the Exchange is usually used for large-volume and block divestment and it allows the consummated price and charges to be lower than the prevailing market rates.

TBCG’s issued share capital currently stands at five billion shares, indicating that the transferred 3.28 billion shares represents 65.6 per cent of the current issued share capital.

The Nation two weeks ago exclusively reported approval of the acquisition by Nigerian and South Africa authorities.

Dangote Group’s DIL had in 2012 sold 63.35 of its equity stake in DFM to Tiger Brands in a $181.9 million deal. The deal saw transfer of 3.17 billion ordinary shares out of Dangote Group’s 3.67 billion ordinary shares of 50 kobo each in DFM to the Tigers Brand. The deal then was approximately valued at more than N28 billion, according to prevailing exchange rate.

After nearly four years of successive losses and impairing of assets, Tiger Brands reached agreement with DIL on December 11, 2015 to resell the troubled flour-milling company to DIL.

Sources had confirmed to The Nation that the Securities and Exchange Commission (SEC), Nigeria’s apex capital market regulator; Nigerian Stock Exchange (NSE), where TBCG is listed and all necessary South African regulatory agencies have approved the deal.

The Nation had reported that the transfer of the shares of TBCG from Tiger Brands to DIL would soon be done through the negotiated cross over window of the Nigerian Stock Exchange (NSE). The transfer of shares would subsequently be followed by the return of the company to its former name, which many stakeholders consider to be a stronger brand than the current name. The Dangote Group is the most capitalised quoted business group in Nigeria with four major companies, including Dangote Cement, cement; Nascon Allied Industry, salt; Dangote Sugar Refinery, sugar; and TBCG, flour. It has several unquoted subsidiaries that are involved oil and gas, telecommunications, fruit drinks and transportation among others.

The Nation in late December 2015 also exclusively reported the details of the acquisition deal. Under the deal, Tiger Brands Limited, South Africa’s largest food company, would divest its shareholding to Dangote Industries Limited (DIL), the holding company of Africa’s richest man, Alhaji Aliko Dangote.

A report obtained by The Nation, which outlined the key details of the Share Sale Purchase Agreement (SSPA), indicated that Tiger Brands will transfer and sell its 65.66 per cent majority equity stake in TBCG to DIL for a nominal consideration of $1. The South African majority core investor will also absorb N15.76 billion in debts.

It was the first report to outline the key financial considerations of the acquisition. TBCG has five billion ordinary shares of 50 kobo each with market capitalisation of about N5.9 billion.

In consideration for the transfer of the 65.66 per cent equity stake to DIL, DIL will inject N10 billion in form of a convertible shareholder’s loan into TBCG in January 2016. The convertible loan implies that DIL, at its option, will automatically have higher majority equity stake whenever it decides to exercise its convertible option.

“Tiger Brands Limited will transfer/sell its shares (3,283,277,052) to Dangote Industries Limited for a nominal amount ($1) in consideration for Dangote Industries Limited injecting N10 billion in January in the form of a convertible (at lender’s option) shareholders’ loan,” according to the report.

Besides, “Tiger Brands Limited’s loan to TBCG of N10.25 billion will be extinguished by way of debt forgiveness to the company” and “Tiger Brands Limited will assume the Stanbic IBTC debt of N5.51 billion and pay up the outstanding amount due to the bank”.

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DStv adds EPL, La Liga, Euro 2016 to Compact Bouquet

DStv adds EPL, La Liga, Euro 2016 to Compact Bouquet

We ‘ll comply with CPC’s order on compensation’

MULTICHOICE Nigeria, owners of DStv, yesterday announced a slash in the prices of its bouquets as well as introduction of two new sport channels.

The new channels – Super Sport 11 (DStv Channel 231) and Super Sport 12 (DStv Channel 232) – will be dedicated to showcasing the English Premier League (EPL), the Spanish La Liga and Euro 2016.

They will be available on the DStv Compact Bouquet.

The DSTV Compact Bouquet was revamped in July 2015 to include over 95 world class channels at a monthly subscription of N6,000.

MultiChoice’s Managing Director Mr. John Ugbe, who announced the offer yesterday, said due to the country’s economic challenges, the company decided to slash prices to enable more Nigerians enjoy quality entertainment at no extra cost.

“One of MultiChoice’s key priorities is to put our subscribers’ needs at the heart of everything we do and since these have been tough economic times for everyone, we realised that our subscribers could use some good news. We are excited that we can now deliver the best football action in the world to our Compact subscribers while ensuring that this development doesn’t negatively impact them financially,” he said.

Ugbe said Compact subscribers would be able to follow football from the EPL, La Liga and Euro 2016, which will show from SS11 from June with additional six matches on SS12.

The firm also announced a massive price slash in the prices of its premium decoders, the Zapper and Explora.

“The Explora, dish kit with one month Compact subscription initially sold at N71,000, has been reduced by more than 50 per cent to N30,000. The DStv Zapper decoder, dish kit plus 1 month Compact subscription will now be sold at N12,500 as against the previous price of N18,500. This offer, which is valid while stocks last further reiterates MultiChoice’s commitment to provide Nigerians with quality entertainment they can afford,” Ugbe said.

Also speaking at the event, the company’s General Manager, Marketing, Martin Mabutho, said with the introduction of two new channels on Compact Bouquets, more Nigerians would have more entertainment value for their money.

“Instead of going to the viewing centre to watch these matches, you can now do so in the comfort of your house at no extra cost. This is to show that our customers are at the heart of our business.”

Also yesterday, the firm pledged to comply with the order of the Consumer Protection Council (CPC) to compensate and provide toll-free lines to DStv subscribers.

A statement issued yesterday in Abuja by Ugbe said the cable company would respect the council’s directive.

He said: “We wish to assure subscribers of our commitment to continue to cooperate fully with the CPC on the order of council.

“We will endeavour by all means to meet the order and deadlines where possible.”

Ugbe added that the company would ensure compliance with the order as it was in its best interest.

“Unlike free-to-air operators, pay television businesses are dependent on subscriptions.

“If we lose subscribers, it will negatively impact on our revenue and ultimately the sustainability of our business.

“It is therefore in our best interest to ensure that customer complaints are attended to and all efforts made to resolve queries in the interests of the subscriber,” he said.

He expressed satisfaction with the professional manner the CPC handled the matter and pledged the company’s commitment to customers-driven service delivery.

The CPC recently investigated and confirmed allegations of violations of consumer rights leveled against MultiChoice Nigeria in the delivery of its services.

Consequently, it ordered the firm to, among other things, provide toll-free lines to its subscribers, release free-to-air channels even when subscription expires and compensate consumers across board for lost viewing time.

On non-availability of popular channels in certain bouquets, the CPC ordered the firm to within 90 days, ensure reasonably equitable spread of popular sports and other channels.

It also directed Multichoice to within 180 days, adopt a technology that supports suspension of service when subscribers are unable to enjoy their service on account of being away for sometime.

The CPC added that such request for suspension of service could be done between seven to 14 days and not more than twice in a year with a 72-hour notice to MultiChoice.

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Mars and Snickers Bars Recalled Over Plastic Scare

US confectionery giant Mars has ordered a full recall of a number of its most popular chocolate bars in the UK, and several other European nations.

Customers are warned not to eat any Mars or Snickers bars or Celebration boxes with best before dates from June 2016 to January 2017, as they may contain plastic.

The massive recall covers millions of products sold in 55 countries, including the UK, Germany, Spain and France, which are all made at Mars Inc’s factory in Veghel in the Netherlands.

The move comes after a customer found a red piece of plastic in a Snickers bar bought on January 8 in Germany.

After he complained to Mars, the plastic was traced back to Veghel which determined that it came from a protective cover used in the plant’s manufacturing process.

Branded Content: A New Emerging Communications Ecosystem

Consumers don’t care about the channels – it’s all advertising to them, says the executive chairman of Karmarama.

A new communications ecosystem is emerging as all corners of the industry are now talking to clients about branded content.

Clients know content is really useful but where does it fit into the marketing mix and how does it work to assist and inform the customer journey? Meanwhile, the explosion in ad tech has created the new marketing promise – optimised content – and in doing so is forcing through a new system.

There are many players involved across media agencies, creative agencies and media owners. I spoke at Magnetic’s event back in October on how magazine media companies, for example, have real valuable skills in editorial and can lead the production of longer form content.

However, the role of each player needs to be defined as the new system is blurring the boundaries.

Firstly, I believe creative agencies must provide the filter of creativity from a brand point of view. We can do this because we are strategic advisers to the client with creative platform thinking which should inform a range of channels.

The media agency is about understanding the technology and optimising content distribution. Their role has not been about creative strategy or content creation.

Likewise, in-house creative at media owners needs to be clearer. Advertorials have always existed, but growth in native and branded content requests from media agencies desperate to fill space in a plan is not a reason for publishers to compete with creative agencies. The creative resource adds real value specifically when creating the content that fits within their own media brands – ad agencies can’t deliver tailored creative for client in each channel.

Look at the successful work being delivered by the Tyler Brule model over at Monocle or Vice Creative. But are Vice a creative agency? No, they need strategic guidance, they need to understand the broader creative narrative – and critically, like all of us, they need to understand where they fit.

The new ecosystem is much more complicated than before – it demands humility and respect. It also requires levels of collaboration, either elected or enforced, not seen before in our industry.

At Karmarama we’ve worked very hard to support our customers in this new world. We work to develop what we call ‘generous ideas’ – big thinking that informs all idea distributors including consumers, the client’s own content makers, other agency suppliers and media and platforms alike. We ask who is involved in stimulating this idea? How are they all going to contribute? Is the idea going to lead to a positive sequence of actions around the brand?

This is all about harnessing the power of positive action. Central creative briefings for all parties ensure the client has sight of a single customer experience, a connected sequence of messaging around an idea. We want to start conversations that will be carried by brands, consumers, and media.

The new ecosystem needs to be friction-free because consumers don’t care about the channels – it’s all advertising to them. What is important is the consistency and the empathy woven through all communications. There are no black and white rules other than know what you don’t know, self-awareness is critical, avoid over-claim at all costs, and work together more than ever before.

The new system means media owners have an opportunity to avoid being stuck in a downstream transactional media buying vacuum – a model that will not allow them or the client to harness their powerful content creation skills. They should reach out and collaborate more with creative agencies. We’re actually genuine kindred spirits, both committed to creative content excellence.

We can get them into the sweet spot of the content need – creating desire. From what I’ve seen, media owners, like the magazine media companies, are bloody good at creating desire. And who doesn’t want to be wanted?

Huawei launches the Power Sharing Formula

For the past couple of weeks, the Nigerian public has been speculating and trying to guess what #ThePowerOfSharing! Nigerians can heave a sigh of relief as Huawei is launching the Huawei G-Power #ThePowerOfSharing exclusively on Jumia.
Huawei is currently one of the top suppliers of the android smartphones all over the world and their epic antecedents in world Technology leaves much to be anticipated and desired even amongst those who are not tech enthusiasts.
This Huawei G-Power comes as a radical paradigm to bring to fore a power sharing formula which has ravaged the country’s ecosystem. The features of the Huawei G-Power is a tech touché to every Nigerian smartphone user who are in dire need of the phones power sharing formula, long battery life,  a large memory and captivating camera quality of this laudable innovation.
It is in line with these expectations Huawei, has made the device exclusive to Africa’s online largest e-retailer, Jumia. The high-end mobile phone will be underpriced at N46,500 along with a FREE Bluetooth swan speaker worth N15,000 in the market.
“Huawei G-Power has raised the bar in the African mobile landscape with unique ability to charge other devices. Huawei G-Power is primed to give Nigerians the satisfaction they have always craved for. If there was anything synonymous to profit on investment it is definitely the Huawei G-Power.’ commented Fatoumata Ba, Managing Director of Jumia.
Hyundai Motor sells 64.96m units

Hyundai Motor sells 64.96m units

Hyundai Motor Company, South Korea’s largest automaker, has announced its 2015 full-year business results.

Sales volume and sales revenue increased while operating profit declined from the same period last year, mainly due to weak cross currencies, increased promotional activities due to heightened competition amongst automakers and profit decline from non-auto business.

The auto giant claimed it sold 64.96 million units worldwide throughout last year.

Hyundai Motor forecasts that an unfavourable business environment is likely to continue this year.

Emerging markets including China will continue posting slower growths. Also growing geopolitical risks and low oil price will lengthen economic stagnation, leading to steeper competition amongst automakers.

Nevertheless, Hyundai Motor will continue its efforts in establishing sustainable growth with R&D investment to strengthen state-of-the-art technology development and securing eco-friendly technology leadership. Hyundai Motor aims to sell 5.01 million vehicles globally.

It plans to achieve its goal with new model like All-new Elantra, Brand-new IONIQ offered in three eco-friendly powertrain (HEV, PHEV, Full-EV) and Hyundai Motor’s luxury brand Genesis G90 (EQ900 in Korea) large luxury sedan in 2016 to major global markets.

Hyundai Motor will continue strengthening its cooperation with suppliers and actively carry out Corporate Social Responsibilities to create more values to customers and stakeholders alike.

NCC boss harps on 8-point agenda’s benefits to subscribers, economy

NCC boss harps on 8-point agenda’s benefits to subscribers, economy

As part of efforts to develop the communication technology sector of the country, the Executive Vice Chairman of Nigerian Communications Commission (NCC), Prof. Umar Danbatta, has harped on his eight-point agenda’s strategic thrusts and the implications for improved telecommunications services quality in the country. Dambatta, during an interactive session with the media in Kano State, explained that the agenda, scheduled for implementation for a five-year period, was premised on a tripod which includes availability of service, accessibility of service and affordability of service, aimed at improving universal access and quality of service. He stressed that the agenda which was in line with the change agenda of the Buhari led administration, revolves round an ideological shift in creation of structures to enhance social benefits and inclusiveness for national development.

In addition, the EVC maintained that the five year strategic vision would enhance the development of a knowledge driven nation that was globally competitive and would help confront any challenge that might arise. Danbatta said:” We present our 8 point agenda alongside the overarching change mantra of President Muhammadu Buhari, to promote innovation, investment, competition and consumer empowerment in and on top of the communications platform of today and the future. The 8 point agenda as listed by the NCC boss were: facilitate broadband penetration, improve quality of service, optimize usage and benefits of spectrum, promote ICT innovation and investment opportunities. Others include facilitate strategic collaboration and partnership, protect and empower consumers, promote fair competition and inclusive growth, ensure regulatory excellence and operational efficiency.”

Completion of 2.6GHz spectrum auction key to affordable broadband –Akinluyi

Completion of 2.6GHz spectrum auction key to affordable broadband –Akinluyi

Tolu Akinluyi, is an experienced telecoms professional whose career in the telecoms industry dates back to 2002 as the first mobile core network engineer of MTN Nigeria. Currently a Communications, Media and Technology Executive with Accenture, one of the global professional services companies, Akinluyi in this interview with Isaiah Erhiawarien, reflects on the key challenges facing players in the industry, including Nigeria’s likely sanctions for shifting the digital migration date.

You have been in the telecoms industry for many years, and as such have a full knowledge of the industry. Do you think the industry has actually grown as far as network capacity is concerned?

Since 2001, the telecommunications industry in Nigeria has experienced impressive growth which has been fuelled by the low teledensity before the advent of affordable mobile telephony in the country, the award of GSM licenses to new mobile telecoms operators, the emergence of business opportunities enabled by the mass proliferation of mobile connections, amongst other factors. For instance, in 2001 there were a total of about 867,000 connected lines nationally, with about 266,000 mobile connections. This number increased by over 10,000 per cent to over 150 million connections today, with about 135 million mobile connections, largely driven by the launch of GSM mobile services in Nigeria. In this period, the contribution of the telecoms industry to Nigeria’s GDP increased from 0.3 per cent in 2001 to 8.53 per cent. And then the also the National Bureau of Statistics, NBS, said that the total contribution of ICT industry to the GDP was stated at 10.13 per cent in 2012, with the telecoms sector accounting for about 82 per cent of this figure. This growth has also driven internet penetration in the country. Similarly, the International Telecommunications Union, ITU, over this same period said that internet penetration in Nigeria increased over 3000 per cent. And the NCC now reports that Nigeria has over 93 million mobile internet users however, it is important to note that whilst this figure is impressive, a lot of connections are not yet of sufficient speed to be categorised as broadband. This dramatic growth of the industry has caused growing pains.

Does that look like a serious challenge by your assessment?

The industry currently faces a series of business, technical and regulatory challenges which pose risks to long term sustainable growth. Whilst many of these challenges are already being faced in more mature markets globally, there are additional local market conditions which exacerbate the situation in Nigeria.

What are your thoughts about the provision of broadband access to Nigerians?

Let’s start with the definition of broadband. A widely accepted definition of broadband is a link capable of delivering internet access at a rate of at least 2 megabits per second (2Mbps). Broadband has become the “oxygen” of the information age. It is crucial in enabling Nigerians access the internet, which is the largest repository of information and knowledge. The ideal broadband supply chain comprises of international connectivity (via submarine cable links), a national backbone network, metropolitan access links, and the local access network (the last mile). The Nigerian government has developed a broadband plan which is aimed at increasing the broadband penetration rate from about 6% in 2012 to 30 per cent by 2018. In Nigeria, there are now multiple submarine cables on the shores of the country. These include the Glo-1, Main One, WACS and SAT3. However, all the cables are landed in Lagos therefore access to other points in the country is limited.

It is necessary to extend the cable systems to other coastal regions of Nigeria in order to ensure resiliency and security. The Nigerian Government therefore has a big role to play in helping to drive this agenda. The backbone links in Nigeria have mostly been developed by individual telecoms operators to suit their business and technical requirements whereas in many other mature markets these were developed by Government owned incumbent operators and later unbundled to ensure open access. As a result, there is an abundance of connectivity on certain key routes, whilst many routes in the country still do not have connectivity. Furthermore, the networks owned by the different operators are not interconnected and therefore not as resilient as possible. The Nigerian government/NCC must follow through on its plans to promote seamless interconnectivity and open access infrastructure sharing amongst operators.

In Nigeria, the last mile is mostly based on wireless technology as a result of the low fixed line teledensity in the country. Therefore most internet connectivity in Nigeria is done via wireless devices. While this helps to provide quick connections, wireless connectivity faces interference and speed challenges which make it less desirable that wired last mile connectivity. The broadband plan must therefore also address the need to provide a mechanism to facilitate an increase in wired last mile connectivity. Regardless of the portion of the broadband supply chain, the challenges faced by operators are common and numerous. These include regulatory challenges associated with getting civil works permits, high costs involved in getting these permits, vandalism and theft of cables, and lack of reliable power resulting in the use of generators which is very expensive.

The National Environmental Standards and Regulations Enforcement Agency (NESREA) currently requires telecoms operators to submit impact assessments and get necessary approvals for the erection of telecoms base stations, in accordance with Environmental Impact Assessment regulations. This process has added to the already lengthy process involved in deploying telecoms base stations. It is necessary to find ways to speed up the EIA approval process to ensure that telecoms operators can deploy additional base stations quickly, efficiently and economically. The Government must take steps to remove the regulatory road blocks facing the operators, and continue to drive its broadband plan to ensure targets for broadband penetration can be achieved.

Concerning digital dividends, how best can these be realized in the country?

In 2006, the Nigerian government signed an agreement with the international telecommunications union, ITU, which mandated the digitisation of terrestrial TV signals by June 2015. This switch over from analogue to digital broadcasting is meant to free up analogue transmission frequencies, so that they could be re-used for mobile telephony and broadband access. The process has been completed in other western countries such as the UK, and is termed the digital dividend. The switchover will also lower the cost of transmission for TV signals and provide a host of benefits for consumers including a wider choice of programmes, more interactive services, and lower prices for interactive television receivers.

But the Nigerian Broadcasting Commission, NBC, was unable to meet the deadline due to a lack of funds. Missing this deadline puts the country at risk of sanctions from the ITU in part because border countries to Nigeria that have already migrated from analogue to digital, are likely to get distorted broadcast signals from television stations located in border towns in Nigeria that are still transmitting analogue signals. Although the NBC has developed a plan to complete the switch over by June 2016, the Ministry of Communications and NCC must actively support the NBC to drive this plan to completion to avoid the ITU sanctions and to free up the frequencies for use by the telecom industry. Completion of this plan will therefore play a big role in enabling the broadband plan. It is important also for both of them to start developing plans to adequately utilise the digital dividend spectrum. These plans need to be developed now, to ensure that the spectrum is appropriately auctioned and effectively utilised as soon as possible, once it becomes available to help advance our national broadband agenda.

What in your views are the likely downsides for Nigeria’s non-completion of the 2.6GHz spectrum auction?

The Nigerian Communications Commission (NCC) recently suspended the auction of the 2.6GHz spectrum due to administrative challenges. This spectrum is set aside for the provision of advanced wireless broadband services. The advantages of this spectrum are numerous. They include, high spectral efficiency and throughput, global standardisation, and therefore better economies of scale and high capacity. These advantages make this spectrum highly desirable to telecoms operators, and therefore the Government must drive the completion of the auction process in order to deliver on the promise of the broadband plan. Furthermore, completion of this auction will help ensure a competitive environment in addition to widespread broadband at economic prices.

The poor quality of service is persisting in the telecom services market. Do you think this can be overcome by operators?

Since the inception of GSM mobile telephony in Nigeria about 14 years ago, Nigerian subscribers have complained about service quality issues. Complaints include frequently dropped calls, network unavailability, undelivered messages, as well as poor call quality. These problems have been exacerbated by the fact that there are no widely available alternatives to mobile telephony in the country, due to a limited number of fixed line connections. On the other hand, mobile operators have blamed a myriad of technical and environmental issues for the poor service quality. These include, lack of regular power supply, vandalism and theft of network infrastructure, insecurity in certain parts of the country, and over regulation. In a bid to address the concerns of telecoms operators, the NCC has announced that the Critical Information and Communications Technology (ICT) Infrastructure Bill which has been sponsored by the Federal Government will be passed before the end of the year. This bill is expected to put mechanisms in place to ensure that Telecoms Infrastructure all around the country are identified as an important national asset and protected.

This bill will also seek to prevent all cases of vandalism by criminals and terrorists as well as other issues such as the denial of access to overhaul or upgrade BTS sites by local residents. It is important to ensure the prompt passage of this bill to help improve service quality challenges. In addition to passing the critical ICT infrastructure bill, it is also important to put in place adequate business continuity arrangements for all critical infrastructure to ensure adequate resilience, recovery capabilities and contingencies. Protection of critical infrastructure alone is insufficient and important to create a national ICT business continuity plan, which will examine all critical infrastructure, determine our recovery capabilities and put in place the necessary contingencies to assure recovery within required timelines. This business continuity plan must be frequently exercised to ensure that new risks are discovered, and that recovery and contingency measures are sufficient.

Also, in order to provide additional coverage and capacity, operators and tower companies need to deploy additional base stations quickly. This is a cost intensive and time consuming process, which is complicated by the fact that operators currently face multiple regulatory hurdles and taxes. These include national regulations such as Environmental Impact Assessment regulations, as well as state and local government regulations. There is a pressing need to address the issue of excessive regulations as well as multiple taxation at the federal and state levels and as well as at the local government level as these regulations and charges increase the cost and time taken to deploy services, which makes resolving quality of service challenges and meeting our national objectives difficult. The NCC has monitored the quality of service provided by mobile operators and has on several occasions’ sanctioned operators for breaching QoS targets. However, these sanctions alone are not enough. The government must work to address the challenges facing mobile operators in order to create a stable operating environment and also commit the operators to certain level of capital investments.

Why do you think we are having issues with subscriber biometric registration?

In 2011, the NCC directed all telecoms operators to begin registering SIM cards and collecting biometric information from all subscribers. All subscribers were subsequently advised to register their SIM cards or face disconnection. A few months ago the NCC gave the directive to all operators to disconnect all unregistered subscribers. This process caused a lot of complaints from subscribers as several subscribers who had already registered were disconnected. While the biometric registration exercise is a good initiative, it is necessary to ensure that all biometric data is adequately verified and harmonised. Steps must be taken by the operators and NCC to verify and cleanse each biometric date to ensure completeness and accuracy.

What do you think could be done to accelerate technology innovation in Nigeria?

No practical example better underscores the power of technology innovation than Estonia. According to the Economist, when Estonia regained its independence in 1991, less than half of its population had a telephone line and it had very limited links to the outside work. 25 years later, it is a world leader in technology. It has created several technology startups, its software developers created the software behind Skype and it even has developed a program to teach five year olds the basics of computer programming. Today technology industries account for 15 per cent of Estonia’s GDP. The Estonian example shows that it is possible to use IT as a catalyst for rapid growth. The Nigerian government must create an enabling environment to foster sustainable growth and development of the IT sector. The development of technology hubs such as the Information Technology Developers Entrepreneurship Accelerator, iDEA, must continue to be encouraged. The government must encourage the industry to promote, build, incubate and partner in the development and realisation of IT innovation hubs. In-addition, government support is required in the roll-out of awareness campaigns on IT Innovation coupled with government commitment towards funding some these hubs to catalyse private sector funding.