While Nigerians are waiting six weeks or so to cast their votes for their next president, AFKInsider has looked into one of the country’s most promising sectors, telecommunications.
Nigeria has to struggle with a number of challenges which can reduce the potential for international investment. Among them are rampant youth unemployment, high levels of crime and corruption, as well as the Islamist insurgency of Boko Haram, which all demand efficient policies and actions from any new government.
The Islamist threat has a spillover effect in the region, and “with the upcoming elections the government will have to be seen to be active against the insurgents, which will further deplete treasury funds,” according to Henry Lancaster, senior analyst at Paul Buddle Communication in Bucketty, Australia.
Nigeria long had a reputation for having one of the continent’s most underserved telecom markets, Lancaster said in an interview with AFKInsider.
There’s a history of poor fixed-line infrastructure and unreliable services.
Since 2001, the effect of ongoing liberalization led to an end of monopolies and a multi-operator environment with healthy competition between hundreds of service providers. Increased investment in the sector resulted in greater choices for the public. Nigerians also have benefited from increased consumer awareness, improvements in quality of services offered, and more widespread availability of telecom services across the country, including rural areas.
Nigeria’s ICT sector attracted more than $6 billion US in foreign direct investments over the last three years, ICT Minister Omobola Johnson said Dec. 18.
“The improved and enabling environment, created by the present (Jonathan) administration, has led many local companies to innovate and add value to the Nigerian economy,” Johnson said, according to ITNewsAfrica.
Central Europe mostly absent
The major strength is the country’s economic stability, which can attract foreign investments, said Gabor Ternak, Hungary’s ambassador to Nigeria.
Ternak said he sees the potential of the Nigerian economy, however, there’s inappropriate infrastructure in several areas, and the country is “greatly hampered by insufficient energy supply, which might be improved through the deployment of alternative energy power plants.”
As an ambassador Ternak said his efforts are focused on alternative energy projects (biogas, biomass, solar energy) implemented by Hungarian firms, and agricultural projects aimed at turning arid territories into fertile arable land, along with the industrialization of agricultural production.
In the IT mobile sector, “there is really no presence of Central European companies,” Lancaster said. “The country’s mobile network operators have stuck to main vendors of Huawei, Ericsson, and ZTE for almost all network deployments and upgrades. These three (and to a lesser extent Nokia) are dominant in most markets in the region,” Lancaster told AFKInsider.
There have been dramatic changes in the universe of mobile phones worldwide. While they have become more sophisticated, there has been an increased competition among carriers, which has enhanced affordability.
Francis Nyamnjoh is professor of social anthropology at the University of Cape Town who writes on media and the politics of identity in Africa.
One of his books is “Mobile Phones: The New Talking Drums of Everyday Africa.”
“There are several millions more users, making mobile phones what Francis Nyamnjoh describes as ‘the new talking drums of everyday life in Africa.’ By and large, the prophecy that greater diffusion will enhance the depth and forms of political sociability has been more or less validated,” said Ebenezer Obadare, an associate professor at the sociology department at the University of Kansas, in an AFKInisder interview.
Raising the level of political debate in Nigeria
“A new space of political engagement has been created quite all right, but that space is not by any means cleanly separated from other conventional spaces,” Obadare said. “Nigerians easily navigate among all of them, making the forthcoming elections one of the most debated in the history of the country.”
The country’s overall infrastructural challenges hold companies back from trying to increase their market shares, Lancaster said. Various strategies are being pursued by the operators to limit the cost of expanding their networks into rural areas where much of the remaining addressable market is.
This includes the use of extended-range technologies, biofuels to power remote base stations, tower sharing and outsourcing of operations and maintenance.
With more than 20,000 radio base station sites erected across the country, efforts are being made to limit the environmental impact of further expansion and to encourage infrastructure sharing., according to Lancaster.
Improvements to the capacity of networks have encouraged the growth of customer use of smartphones.
“Smartphone penetration was about 10 percent in early 2014, and is expected to reach 40 percent by early 2016,” Lancaster told AFKInsider. Mobile phones may also become tools of political campaigns in the future, in particular, in an era of heated competition.
Istvan Tarrosy is assistant professor of political science and director of the Africa Research Center at the University of Pecs, Hungary. He is Fulbright alumnus (2013-2014) at the Center for African Studies, University of Florida. He is co-editor of “The African State in a Changing Global Context, Breakdowns and Transformations” (Berlin, 2010) and editor of “Afrika Tanulmanyok,” the Hungarian journal of African Studies.
Sign up for the Moguldom newsletter — the most compelling business news you need to know about reversing inequality in tech, delivered straight to your inbox.