FG moves to tame $2.6bn annual forex outflow by telcos
The federal government has shown concern to tame the annual outflow of foreign exchange for the telecommunications sector, estimated at $2.6 billion annually.
The government will reduce forex demands of the operators by promoting competitive indigenous solutions via the National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector, recently launched by Isa Pantami, the minister of communication and digital economy.
According to the policy document, the telecommunication sector spends $750 million on CAPEX projects, $250 million on network software licensing, $800 million on management fees, $157 million on managed services (Tier 2 and 3 Support), and $200 million on miscellaneous (international circuits, roaming and terminations reconciliations etc.).
The document revealed that the statistics used to arrive at the figure were based on the average annual reports of a sample of industry players in the telecom sector over a five-year period.
A portion of a statement signed by the President, Major General Muhammadu Buhari said, “The National Policy for Indigenous Content in the Nigerian Telecommunications Sector is in line with this administration’s commitment to ensure that Nigerians become active participants in the different sectors of the economy.
“This is clearly stated in our Presidential Order 005 on ‘Planning and Execution of Projects, Promotion of Nigerian Content in Contracts and Science, Engineering and Technology’ and Presidential Executive Order 003 on ‘Support for Local Content Procurements by Ministries, Departments and Agencies of the Federal Government of Nigeria’.
The NCC is pushing for more local player participation in the telecom space. The commission said 77 per cent of the software used in the telecom space was foreign. Hardware used the sector was 86 per cent foreign.
Aims of the Policy
The overall objectives of the Policy for Promoting Indigenous Content in the Nigerian Telecommunications sector are as follows:
- to create a framework for supporting indigenous telecom businesses to become world class service providers;
- to ensure compliance with existing regulatory guidelines for indigenous content;
- to highlight and promote indigenous capacities in the telecommunications sector;
- to foster collaboration between global Original Equipment Manufacturers (OEMs) engaged in the manufacturing of telecommunications equipment and indigenous players;
- to ensure strategic partnerships with relevant regulatory agencies to create joint efforts to promote indigenous content;
- to enable the indigenous telecom industry to contribute significantly towards the overall development of the telecom industry; and
- to encourage and incentivise the participation of indigenous telecom institutions in relevant Standards Development Organisations.
