Nigeria’s telecoms sector gulps $2.6bn in foreign exchange outflows annually

Nigeria’s telecoms sector gulps $2.6bn in foreign exchange outflows annually – NCC says

Charles Abuede

The Nigerian Communications Commission (NCC) has revealed that the yearly outflow of forex from the Nigerian telecoms sector has reached $2.6 billion while revealing that the sector spends about $750 million on CAPEX projects, $250 million on network software licensing, $800 million on management fees, $157 million on managed services in the tiers 2 and 3 support, and $200 million on miscellaneous such as roaming, international circuits and terminations reconciliations.

This was revealed by the NCC in its National Policy Document for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector which showed the statistical breakdown which was based on the average annual reports of industry players in the telecoms industry in Nigeria over a 5-year period.

According to the policy document which was signed by Nigeria’s President Muhammadu Buhari, “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”.

Furthermore, the telecoms sector regulator, in its continued pursuit for more local player participation in the Nigerian telecommunication sector, said about 77 per cent of the software and 86 per cent of the hardware used in the sector are foreign. Also, data obtained from Base Transceiver Stations (BTS) show that foreign products have dominated locally manufactured ones as 88 per cent of these products are foreign while the remaining 12 per cent are locally made as well as the issue of the foreign-dominated top management staff of telecoms companies in Nigeria which is about 69 per cent.

However, the policy document seeks to address the situation in which foreign participation in telecom companies in Nigeria will have a clear succession plan for senior management positions with conscious actions made to build capacity and provide opportunities for Nigerian to attain these positions while the NCC also wants to actively play a role in the expatriate quota implementation as a way to ensure strict compliance in the sector.

“To support this approach, modalities should be put in place to ensure that foreign companies are not allowed to trade directly in certain segments of the telecommunications markets unless there is a certain percentage of indigenous content or ownership,” the policy reads.