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Foreign OEMs Control 70 Percent of Nigeria's Hardware Market(AllAfrica Via Acquire Media NewsEdge) The increasing apathy by Nigerians for local Information and Communications Technology (ICT) hardware products including Personal Computers, laptops, and mobile phones, among others may have ceded 70 per cent of the country's technology market to the foreign brands, The Guardian has learnt. The Nigerian ICT hardware and services industry is currently estimated to worth $39.7 billion in 2014, and forecast to grow to $144 billion by 2020. An official of the Ministry of Communications Technology, who spoke to The Guardian on the condition of anonymity at the weekend, said foreign brands have continued to dominate Nigeria's hardware market without measures. According to him, major multinational ICT hardware manufacturers such as Samsung, Acer; HP; Dell; Asus; Toshiba and Lenovo among others currently account for 70 per cent of sales in the market, which has not been reciprocated. This revelation is coming on the heels of a declaration that the continued importation of ICT hardware and services into Nigeria may also have accounted for a $2 billion (N320 billion) yearly losses as capital flights from the country. However, the ministry's source disclosed that a handful of indigenous brands make up the remaining 30 per cent. He said the major local PC manufacturers and assemblers include Zinox Computers; Omatek Computers; Brian Integrated Systems; Inlaks Computers; Veda Computers; Beta Computers among others will be required to have a minimum capitalization of N2 billion starting from 2015 for them to operate efficiently. Though, the Minister of Communications Technology, Dr. Omobola Johnson said about two weeks ago in Abuja that the ministry was working to achieve 50 per cent growth in local content in Nigeria by 2017, the ministry's source said the Federal Government through the Office of the National Content may require foreign OEMs to achieve 50 per cent local content in their make up. According to him, the Federal Government wants foreign OEMs to achieve 50 per cent local content instead of shipping in boxes or systems that have already been produced in other countries. He emphasized that government actually wants international brands to establish factories in Nigeria or partner with any local operators or by buying components of their systems that are produced by local manufacturers. Going forward, the source said part of the guideline will be that foreign brands maintain in-country research and development departments for the purpose of product conceptualisation, innovation, adaptation, and design and prototype development. He informed that FG also wants the international brands to design and develop products that support Nigerian languages and local use case, among others. According to him, as at 18 months back, local PC manufacturers were producing between 130, 000 to 150, 000 units on a yearly basis, and the average cost of a low end laptop was N50, 000 ($315). The source, who said unlike many more developed markets, in which most users upgrade their hardware every two to three years, "in Nigeria both desktops and laptops are often used five years or more. As a consequence, the after-sales agreement is considered to be an integral component of the local PC market, and the majority of new computers are sold under warranty." Indeed, a document presented at the Investors' Forum at the just concluded Gulf Information Technology Exhibition (GITEX) in Dubai, UAE made available to The Guardian also revealed that about four million mobile phones are said to be imported into the country on a monthly basis. According to the documents, these loopholes are avenues the Nigerian government is hoping to woo foreign investors into for the country. A telecoms expert and Federal Government's consultant, Amstrong Katang, who made a presentation titled: "Investment Opportunities in the Nigerian ICT sector", said Nigerian economy today mostly relies on ICT imports and that government was ready to change the trend. Katang explained that the potentials in Nigeria are huge with an estimated population of 170 million. He said Nigeria today is the seventh largest country in the World; and the largest in Africa with 42 per cent of Nigeria's population below 15 years, adding that the country's Gross Domestic Product (GDP) has grown at close to seven per cent over the past five years. "Also, Nigeria is Africa's largest economy after recent re-basing exercise from $509.9 billion in 2013 from $269.5 billion. Nigeria's consumer class is growing at approximately 23 per cent of population in 2012 while the country has had 106 active infrastructure projects valued at $ 100 billion in 2012. "Today, abut 800, 000 PCs are shipped into the country yearly but available market is about three million, meaning there is demand gap of 2.2 million; yet, $2 billion of IT products and services are imported yearly while export is just about $5 million. Also, about four million mobile phones are shipped into the country monthly. Nigeria has a vision to be ICT hub of Africa, yet, we are having huge internet bandwidth capacity while last-mile connectivity is non-existent", he stressed. On the increasing foreign brand domination, it will be recalled that many of the local companies have called on the government to increase its commitment by supporting the Nigerian ICT manufacturing segment. As such, in 2012, the ministry announced that only the five accredited local OEMs including Zinox, Omatek, Brian, Beta and Veda were selected to supply hardware to the MCTs Student Computer Ownership Scheme, which was structured to make computer ownership easy and affordable to students via instalment payment plans by the banks. But almost two years gone now, nothing positive seems to be coming forth on the initiatives. In fact several government parastatals both Federal and states still prefer to use foreign brands. A typical example is the Lagos e-Learning centre, where virtually all the PCs are foreign brands. Also the Digital Bridge Institute (DBI) in Lagos, a capacity building arm of the Nigerian Communications Commission (NCC) still has larger chunk of its ICT wares as foreign brands. In one of her interviews with The Guardian, the Chief Executive Officer of Omatek Ventures, Mrs. Florence Seriki said the situation will not abate until Nigeria's number one citizen (President Goodluck Jonathan) championed the course for the increase usage of locally made ICT wares. However, a telecoms expert, Kehinde Aluko, who rued the increased domination of the Nigerian market by foreign brands, stressed that local operators must develop good products that can stand the test of time and compete favourably with the international brands. Copyright The Guardian. Distributed by AllAfrica Global Media (allAfrica.com). |