YEMISI IZUORA in this report looks at current efforts by the Nigerian Communications Commission, NCC’s commitment and resolve to align with World Bank expectations to promote key regulatory policies that will position Nigeria to take significant economic leap using the Digital Economy platform
In its ‘NIGERIA Digital Economy Diagnostic Report,’ the World Bank unambiguously states that Nigeria is uniquely positioned to reap the benefits of the digital economy.
It says that Nigeria accounts for 47 per cent of West Africa’s population, and half of the country’s 200 million people are under the age of 30.
Nigeria has the largest mobile market in Sub-Saharan Africa, supported by strong mobile broadband infrastructure and improved international connectivity; yet minimal fixed broadband infrastructure and connectivity in rural areas is leaving a significant number of the most marginalized segments of the population without Internet access.
By the Bank’s assessment Nigeria is home to several high-growth digital companies that provide hopeful examples of the country’s digital potential. Lagos is a mature and active ecosystem with dynamic incubators, venture capital companies, digital start-ups, and private services via digital platforms. And the potential of digital nancial services remains untapped despite the large share of unbanked population.
To deliver on the 2030 aspirations of greater access to the digital economy and meet the bold objective of creating 100 million jobs in Nigeria, the country needs to increase investment in infrastructure, create an enabling regulatory environment for the digital economy to grow (e.g., regulatory enablers of DFS), pursue radical reforms that bring about improved skills and a more competitive digital job market, support public-private partnerships to stimulate and sustain demand for the use of digital plat- forms, and improve the current business climate to boost more investment opportunities.
In an opening note of the report, signed by Shubham Chaudhuri , Country Director, Nigeria World Bank Group, the World Bank Group confirms standing ready to support Nigeria in pursuing context-specific approaches that will prioritize key interventions in the five foundational elements and advance the digital economy in Nigeria to promote rapid growth, more and better jobs, and more accessible and higher quality public and private services.
The Nigerian Communications Commission, NCC, is information driven agency that that researches on opportunities inherent in the technology driven world.
The World Bank analysis and forecasts is seen as a challenge and the agency takes on every piece of information to create wealth of opportunities.
Given its understanding of potentials of Digital Economy, the Commission in continuation of its renewed strategy and vigour for effective delivery of its regulatory mandate, in July 2020, created a Digital Economy Department, principally responsible for implementing programmes and policies aimed at fully supporting and promoting the national digital economy agenda of the Federal Government.
An astute and ingenious head of the agency, Prof. Garba Umar Danbatta, has the belief and conviction that the unit will go further in delivering some key results.
The creation of the new department clearly was in line with the Commission’s strategy to create a dedicated team, with the sole responsibility of giving necessary push to the promotion of digital economy vision of the Federal Government. According to Prof. Danbatta, “placing the newly-created department under the Office of the EVC also underscores the importance the Commission places on the need to successfully drive the overall national digital economy strategy of the government through ensuring its effective monitoring and supervision.” In addition to working with the eight pillars of the National Economy Policy and Strategy (NDEPS) document, the Broadband Implementation Unit in the Commission, hitherto placed under the Special Duties Department and all the staff of the Unit, are to move to the newly-created Digital Economy Department.
Already, Engr. Babagana Digima, an Assistant Director in the Special Duties Department has been moved and designated as the pioneer Head of the new department. The NDEPS, as a national policy document, was unveiled by President Muhammadu Buhari in November 2019 to add the needed impetus to the actualisation of the Federal Government’s Economy Recovery and Growth Plan (ERGP).
Understanding Benefits Of Stronger Inter-Agency Engagement
In line with its inter-agency collaboration, the Nigerian Communications Commission (NCC) has signed a Memorandum of Understanding (MoU) with the Federal Inland Revenue Service (FIRS) in May, 2020, to ensure the tax agency ascertain accuracy and completeness of value added tax (VAT) elements and other taxes payable in the transactions of telecoms operators.
With the MoU, the FIRS will be able to integrate an application programming interface (API) technology solution with the systems of telecom Operators for independent verification of the amount of VAT that should be paid by mobile network operators (MNO) rather than relying entirely on the Operators’ books of accounts. The MoU with FIRS joined a long list of other orgainsations both in the public and private sectors which the NCC has collaborated with towards ensuring regulatory excellence, since telecoms percolates all the spheres of our society.
The Minister of Communication and Digital Economy, Dr Isa Pantami, has projected that Nigeria’s economy would go 21 per cent digital by 2021, as digitalisation is becoming the most adopted economy globally.
Pantami, has always seen the NCC as engine that will drive the growth.
According to him, the advent of the COVID-19 pandemic brought to light the importance of the digital economy in the growth of any nation, noting that it also underscored the need to fast track digital transformation in Nigeria.
Speaking at the Chartered Institute of Bankers of Nigeria’s (CIBN) 2020 Graduates’ Induction and Prize Award’s Day, held virtually, Pantami said the digital economy drive is focused on four key areas – digital identification, broadband penetration, smartphones, and bank accounts.
While stressing the need for professionals to develop more innovative digital tools and competencies, he noted that activities in the banking, customs, and ports sectors, including revenue collections were now digitised.
This is even as broadband penetration at the end of July rose to over 43 per cent, almost 10 per cent increase in less than a year, compared to the usual two per cent penetration witnessed in the years before.
He said the Ministry was working to ensure that indigenous digital solution providers and entrepreneurs get preference, as the current administration is committed to consuming what it produces.
“The latest Quarter Two (Q2) 2020 report recently released by the National Bureau of Statistics (NBS), showed that the Information and Communications Technology (ICT) sector contributed about to 17.83 per cent to the Gross Domestic Product (GDP), from 13.85 per cent in the same period of 2019.
“Yet, the digital economy was not included in the disclosed figure. If the digital economy was added, it would have risen well above 45 per cent to GDP,” Pantami added.
Earlier, President and Chairman of Council, CIBN, Bayo Olugbemi, in his speech, charged professionals to take advantage of the digital economy to shape the future of the banking industry.
He said it was in recognition of the important role the banking and finance industry plays in the growth and development of the economy that the Institute decided to x-ray the topic, “Digital Economy: The Role of Professional Bankers.”
According to him, COVID-19 accelerated the pace of the digital revolution, making it imperative for Nigeria to rethink its approach to the digital economy, which has become the new normal.
He maintained that technology has caused significant disruption in the financial sector, noting that the implication of the revolution to the Institution was that professional bankers need to acquire new skills, to be able to combine digital awareness with great people skills.
His words: “I believe that highly qualified, knowledgeable, skilled, dedicated, customer-focused banking professionals will shape the future of banking, as much as the new technologies that are transforming the financial-services industry will.”
In her remarks, Guest Speaker and Academic Director, Lagos Business School, Prof. Olayinka David-West, said the digital economy was birthed alongside the Information Age, and represents the levels of economic activity from digital connections between people, businesses, devices, data, and processes.
She notes that although Nigeria’s financial services ecosystem recorded significant progress in areas like bank verification number (BVN), and Instant Payments, the surge in bank branches after the first phase of the lockdown presented some interesting challenges to the digital transformation of financial services.
David-West said: “When we compare financial inclusion levels with mobile telecommunications penetration or even internet usage vis-a-vis their maturity, we can see that again 100 years versus 20 years, we still have a lot of gaps to close.
“The informality of the economy and the dominance of cash still require innovative capabilities that extend beyond digitalising cash to developing financial solutions that really meet the needs of the larger population that we want to deal with.”
Amidst the realities of the digital economy and the future, she said while organisations are distributed, aggregating quality digital infrastructure at one location is inefficient, as some homes have become workplaces, which organisations need to accommodate.
Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, is equally sounding optimistic that digital economy was crucial in the efforts by the federal government to drive growth over the next few years. Emefiele stated that as the pace of technological adoption increased, government and the private sector must find ways to leverage the digital channels to improve access to finance and credit for all Nigerians.
Emefiele, spoke at the opening of the 30th CBN seminar for finance correspondents and business editors, themed, “Leveraging Digital Economy to Drive Growth, Job Creation and Sustainable Development in the Midst of a Global Pandemic,” which held simultaneously in Abuja and Lagos.
The CBN governor said the bank had disbursed a total of N149.21 billion to 316,869 beneficiaries through the NIRSAL Microfinance Bank, in a move to alleviate the plight of households and business owners and drive economic growth during the COVID-19 pandemic. The disbursement was part of the N150 billion Targeted Credit Facility (TCF) for affected poor households and small and medium enterprises.
Emefiele said the country needed robust digital platforms to boost the economic prosperity of the citizens.
Represented by Deputy Governor, Corporate Services Directorate, CBN, Mr. Edward Adamu, Emefiele observed that one of the strongest advantages of technology was its ability to compress time and space and reduce the world to a global village by providing connectivity at the click of a button to anyone anywhere in the world. He said to further drive growth, Nigeria needed to build a solid digital economy, by focusing on the improvement of digital infrastructure, most importantly, Internet connectivity, digital literacy and skills, digital financial services, digital platforms, and digital entrepreneurship.
The CBN governor said as the biggest economy in Africa with one of the largest youth populations in the world, Nigeria was well positioned to develop a strong digital economy. He stressed the need to focus on accelerating improvements across the five fundamental pillars of the digital economy: digital infrastructure, digital platforms, digital financial services, digital entrepreneurship, and digital skills.
According to Emefiele, “In our effort to drive change and development, the CBN has over the last decade and half worked to build an effective and efficient payment system.
“The Payment System Vision 2020 strategy document was published in 2007 and the main objective of the strategy was to promote and entrench electronic payments, as the major channel for payment and settlement by all economic agents, away from the current dominance of cash-based transactions.”
He said the robust regulatory framework put in place by the bank opened up the payment system to innovation with several new players across Payment Service Banks, Payment Terminal Service Providers (PTSP’s), Payment Solution Service Providers (PSSP’s), Mobile Money Operators (MMO’s), Payment Terminal Application Developers (PTSA’s), and agent banking.
Emefiele pointed out that a combination of these payment initiatives had helped to create employment opportunities and further the bank’s effort to build a more financially inclusive economy.
“Today, an SME in Ibadan is able to leverage digital channels to sell their products and services to a wider market beyond their immediate environment,” he stated.
He assured that the CBN regulatory sandbox was available for fintech companies to explore the use of blockchain technology in areas that would be beneficial to the Nigerian economy.
Emefiele said, “Given the resounding success of this programme and its positive impact on output growth, we have decided to double this fund to about N300 billion, in order to accommodate many more beneficiaries and boost consumer expenditure, which should positively stimulate the economy.
“In line with the growing need to go digital, the application process is done online and requires limited paperwork from prospective applicants.”
He added, “The bank continues to improve our remittance infrastructure in order to provide Nigerians in the diaspora with cheaper, convenient and faster channels for remitting funds to beneficiaries in Nigeria.
“In a bid to reduce the cost of remitting funds to Nigeria, the Central Bank of Nigeria on March 8, 2021 introduced a refund of N5 for every $1 of fund remitted into the country through IMTOs licensed by the CBN. We believe this measure would help to support improved foreign exchange inflows and enable Nigerians in the diaspora to use more formal channels relative to informal channels.”
Emefiele explained that these measures were not new, as several countries had adopted similar processes to reduce the cost of remitting fund by their diaspora communities, and it led to surges in remittance inflows through formal channels. He said following the outbreak of COVID-19, the country was able to benefit from some of the measures put in place by the CBN to develop a robust interoperable payment system.
He said the presence of these digital channels, along with various mobile and web-based channels, helped to support households and the business continuity and remained critical in mitigating the negative effect of the pandemic on GDP growth in 2020.
Emefiele noted that as a result of the CBN interventions, the ICT sector grew by 14.7 per cent in 2020, relative to 10.16 per cent in 2019.
The drive to enthrone a digital economy in Nigeria may not be impactful without adequate and thorough research.
The NCC understands this gap and has engaged in deepened research to provide leadership in that space.
Research gap according to the Director, World Bank Sponsored Africa Centre of ICT-Driven Knowledge Park, and immediate past Dean, Faculty of Technology, Obafemi Awolowo University, Ile Ife, Prof. ‘Sola Aderounmu is a challenge.
Aderounmu, who was also the former President, Nigeria Computer Society (NCS), stated this in an article submitted to the Research Management Office of the University of Ibadan, Oyo State. He said there can be no digital economy without research, simply because innovations are what drive the digital economy, but innovations are themselves fuelled by research.
According to him, in metaphorical denotations, innovation is the oxygen of the digital economy while research is the lifeblood of innovation.
“So, as nations and governments strive to build or grow their own digital economies, they must pay priority attention and provide massive funding to Research & Development activities and projects in the academia and tech industry.
“Thanks to the Tertiary Education Trust Fund (TETFund) which is currently playing a key role in funding research in higher institutions of learning in Nigeria, and establishment of Centres of Excellence of which University of Ibadan is a beneficiary.”
By way of definition, the former NCS boss noted that the digital economy lends itself to diverse significations, but essentially, it is, according to a World Bank Digital Economy report referencing Ernst and Young, “the part of economic output derived solely or primarily from digital technologies (ICT) with a business model based on digital goods or services.”
According to him, the report further expatiates that “digital economy is made up of various components, including a platform economy, a gig economy, an industry 4.0, a digital economy, data analytics, robotics and Artificial Intelligence (AI), machine learning, 3-D printing, and e-commerce, among others.
In other words, he said the digital economy as it is today encompasses wide-ranging economic activities that leverage digitised information and knowledge as fundamental dynamics of production.
He stressed that diverse innovative digital technologies are deployed to gather data, store data, analyse data, and then share the same data digitally to facilitate more effective interactions and efficient transactions in modern society.
Aderounmu said more innovation hubs and technology parks must be established and well-funded to expand research capabilities. He stressed that there is a critical need for deepening the strategic partnership between the academia and entrepreneurial industry, so as to ensure that research efforts yield rewarding outcomes that benefit society and advance the digital economy.
“What is more, the collaboration between the academia and industry can also explore curriculum planning for institutions of higher learning in order to evolve the right ICT programmes that will help realise the skills requirements of the future,” he added.
The immediate Past Dean also argued that above all, the implementation of a digital economy strategy must be a deliberate government policy that is well thought out and structured.
According to him, governments of developing economies such as we have in Africa need to take the right steps towards the actualisation of a modern digital economy strategy.
Aside prioritising and funding research, he said developing countries can also build a robust digital economy by promoting digital skills uptake among citizens, minimising capacity constraints, investing in wholesome ICT ecosystems, providing up-to-date digital infrastructure, facilitating easier digital access, strengthening regulatory frameworks that nurture and protect competition, and implementing policies for stimulating sustainable innovation.
NCC Research And Development Unit
The Concerns raised by Prof. Aderounmu had been addressed as NCC has knowledge of challenges that could surface in future.
Consequently, in December 2016, it created the Research and Development (R&D) Department will focus on these vital areas.
The department would among other things
- Liaise with the different Departments in conducting researches on current industry issues, emerging technologies and trends to assess the effectiveness of regulatory decisions and actions.
- Undertake and coordinate telecoms-based researches from Tertiary Institutions that have the potentials of growing the industry.
- Ensure periodic publication of the research reports in both local and international journals, forecasts annual trends reports on the Nigerian ICT sector to guide Management’s decision for Policy formulation and development for the telecommunications industry.
The telecommunications industry is a very dynamic sector throwing up new technologies, new opportunities and new challenges all in a mix but converging to create a new socio-political and economic environment appropriating all the nuances and benefits of modern technology.
The Commission through its regulatory process is to superintend the development and growth of the sector through licensing processes and other regulatory measures.
The NCC will foster these developments in terms of regulating the ways and means by which these services are provided by its licenced telecoms operators. The creation of the Research and Development Department is a welcome development that the NCC recognizes its successes as a regulator and is, therefore, determined to continue playing a leadership role in a holistic manner that will aggregate the strength, skills and intellect of relevant strata of society in a supported process that will foster the growth of the telecommunications industry while enhancing the adaptive use of the sector by the society.
The R & D Department currently has two (2) Units, namely, Academia Research Support (ARS) Unit and Emerging Technologies Research (ETR) Unit.