Nigeria May Lose Out On $300bn Smart Africa Initiative

  • Economic Crunch Affecting Its Neighbours

 

Emmanuel Okwuke, Innocent Oweh

Lagos/Abuja – Nigeria may lose out of the Smart Africa Initiative committed to attracting $300 billion investment into the African information and communication technology (ICT) sector due to policy inconsistencies, multiple layers of taxes by various arms of government, high cost of Right of Way (RoW), and the proposed nine percent communications tax presently before the National Assembly, among others, Independent has gathered.

Gbenga Adebayo, Chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), said it would be practically impossible for the country to attract ICT investments as long as multifarious challenges persist.

Gbolahahan Awonuga, Executive Secretary, ALTON, pointed out that as long as the different levels of government continue to see the telecommunications industry as a cash cow rather than a catalyst for development, Nigeria would always lag in ICT investments.

Dr. Omobola Johnson, former Minister of Communication Technology, in a recent chat with Independent at the 2016 TechPlus Exhibitions and Conferences in Lagos, said governments of the northern corridor countries of Rwanda, Kenya, Uganda, South Sudan and Ethiopia, with a total of 160 million people (76 percent of their population) not connected to the Internet, have committed to work together to bring 40 – 75 million of these unconnected citizens online by 2020.  They are receiving the full support of the World Economic Forum (WEF) Internet for All Initiative.

Though the Nigeria’s broadband plan, developed by a Presidential Committee in 2013, includes a connectivity target of 30 percent by 2017, broadband penetration still stands at 14 percent currently, albeit more than double what it was when the plan was published.

Johnson said there is need for a new and more ambitious target and the country needs to do more to achieve it, especially in the light of the UN goal and the slow growth that the country is now witnessing.

Last year, the United Nations set a new global goal: universal, affordable Internet access for all by the year 2020. This ambitious goal underscores the importance of Internet access to global development and empowerment.

“Today we live in a world that is more connected than ever before. In the relatively short time since its invention, the Internet has revolutionised our world and has radically altered the way we work, play, and live,” adding that connectivity has become so indispensable to modern life that half of the world’s population is still offline. That’s more than four billion people, unable to take advantage of the connectivity and opportunities that come with Internet access.

She said that nowhere is this problem more acute than in Africa.

“Across our continent, just one in five people are online today. What’s more, growth is slowing and recent statistics from the NCC has shown that. Over the past year, Internet use in Africa grew by just 1.8 percent,” she noted.

A recent report by the Alliance for Affordable Internet indeed indicates that at current trends, Nigeria may not achieve universal Internet access until the year 2042 — over 20 years beyond the target date set by the United Nations.

This growing digital divide, according to her, has been fingered to stunt economic growth and holding back development as it denies information, opportunities, and voice to nearly one billion Africans as well as exacerbating existing inequalities.

Smart Africa, a continent wide initiative borne out of the Transform Africa Summit held in Kigali, Rwanda in 2013, is based on five key principles – putting ICT at the centre of Africa’s socio-economic development agenda; improving access to ICTs, especially broadband; improving accountability, efficiency and openness through ICT; putting the private sector first; and leveraging ICT to promote sustainable development.

The Transform Africa Summit specifically declared the next decade 2016 – 2025 as the decade of Africa’s development through ICT. However, Nigeria is seen to be missing out on the initiative because of government policies, which are inhibiting growth in the sector.

Smart Africa is chaired by the president of Rwanda, Paul Kagame, and has the presidents of Angola, Gabon, South Sudan, Senegal, Mali, Chad, Angola, Burkina Faso, Cote D’Ivoire as well as the Secretary General of the ITU and the Africa Union Commissioner for Infrastructure and Energy as Board members.

Meanwhile, as Nigerians grapple with challenges occasioned by near recession, President Patrice Talon of Benin Republic has lamented that the economic downturn in Nigeria is already taking its toll on his country and other nations in the West African sub-region.

Talon gave this indication on Tuesday at the Presidential Villa, Abuja, when he visited Nigeria on a one day working visit.

At a joint press conference addressed by President Muhammadu Buhari and his guest, Talon described Nigeria as the engine room of West Africa, which ought to explore its non-oil potential to boost the country’s revenue profile and sustain its leading role as a big brother figure in Africa.

The Beninoise president also said his visit was to reactivate the existing bilateral relationship between his country and Nigeria, especially in the areas of trade relations, economy, energy development and education.

Talon, who is visiting Nigeria for the first time since he became president of Benin Republic, pledged partnership with Nigeria in dealing with the problem of illicit trade affecting both countries.

Part of the country’s woes came after the Central Bank of Nigeria (CBN) in June officially devalued the naira to end the currency peg of N197-N199 set last year with the objective of curtailing imported inflation and ease the burden of the most vulnerable Nigerians.

One month after floating the naira, the currency remains the worst performing in Africa against the dollar hobbled by supply constraints, data has shown.

Of the 23 African currencies monitored by Bloomberg, the naira has lost the most with a 30 percent decline since middle June closely followed by Sierra Leone with losses of 29.16 percent.

The naira was bettered by the South African Rand, Botswana Pula and the Somali Shilling. Other currencies which dusted the naira are Eritrean Nakfa, the Tanzanian Shilling and the Djiboutian Franc.

The best performing African currency in the period, data further show, is the Zambian Kwacha, which has gained 12.12 percent in the last one month. The South Africa Rand gained 5.03 percent to place at a distant second, followed by the Botswana Pula with a 1.4 percent gain.

Three currencies, the Egyptian Pound, Liberian Dollar and Mauritanian Rupee were stagnant in the period.

It was reported last week that dollar scarcity is responsible for the current slide of the naira, which naira weakened 3.5 percent to a record N294.5 versus the dollar in the spot market Monday.

Ikechukwu Kelekume, Head of Banking and Finance department at the Lagos Business School (LBS), says currency that is so volatile like the naira will be avoided by traders because of the ease with which traders lose money on the backdrop of uncertainty surrounding the naira.

“It is true that originally the naira was a toast to traders within the West African coast but that was in the era of a stable and high oil price and a stable policy regime. Today the story is different. Virtually all major macroeconomic indicators are in the negative.

“In January 2014, the Inter-bank FX and the Bureau de Change (BDC) traded at N160/$1.00 and N171.71/$1.00, respectively. As at end July 2016, the Inter-bank FX and the Bureau de Change (BDC) were exchanging for N315.5/$1.00 and N375.50/$1.00, representing a devaluation of over 96.9% at the Inter-bank segment and 118.6% at the BDC segment.

“With inflation tending towards 17%, interest rates tending upwards following a rise in MPR from 12% to 14%, oil price declining to $42 per barrel at end July 2016, from $48 per barrel in the month of June and increased militancy in the Niger Delta, investors and traders have real reasons to avoid the naira.”

President Buhari also told his guest that government was seriously considering the possibility of using modern technology to transform gas into liquid form for easy export, especially to the West African sub-region. He gave indications that efforts were on to ensure that the West African Gas Pipeline project becomes more efficient to stabilise energy sectors which will in turn enhance electricity supply across the West African sub-region.

“The economic part of (our discussion) was mainly on energy, making sure that the West African Gas Pipeline is made much more efficient. This government is making all the efforts it can to stabilise the situation because the resources are there.

“The world knows that Nigeria has plenty of gas, what we need to do is to stabilise the environment so that this gas can be regularly pumped to the sub-region through the infrastructure already in place.”

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