" ITREALMS: ICT: Enormous untapped investment exists in Nigeria - Adeola

Wednesday, August 03, 2011

ICT: Enormous untapped investment exists in Nigeria - Adeola

THE former vice presidential candidate for Action Congress Nigeria (ACN), and industry icon, Mr. Fola Adeola has forecasted the existence of enormous untapped investment in Nigeria, especially in the Information and Communication Technology (ICT) sector and specifically, on broadband.

Adeola who lead discussions at the just ended Broadband Summit in Lagos said that an examination of the investment climate in the next decade in Nigeria, particularly within the context of broadband infrastructure and services, has shown that there are untapped investment opportunities in the country.

“It is note-worthy to emphasize that the Main One project itself underscores the enormous untapped investment opportunities that exist in the Nigerian economy today and in the nearest future,” he asserted.

Broadband, he said, therefore represents a new frontier for investment in the Nigerian economy in the next decade.

According to him, in a lead paper at the summit, this forecast showcases the colossal possibilities that exist in this economy for credible infrastructure projects and the investment appetite of both local and international investors in the ICT sector in Nigeria.

Particularly, he said that in the area of broadband infrastructure and services have attracted equity and debt funding from both local and international institutional and private investors.

He said that there is an overall keen global interest to invest in Nigeria given the size of the market and growth potential.

However, he noted that investors would remain wary until they see political certainty, which hopefully, should improve, following the performance and outcome of the last election.

“As the country enters a new political dispensation, several critical issues will need to be addressed by the Federal Government in order to renew investor confidence, and drive growth outside the oil and gas sector,” he said, stressing that these would include policy reforms which will improve several areas of dependencies such as power, security, ICT infrastructure, roads and other transportation infrastructure, education, and preparedness of the workforce for skilled jobs, improved financial and capital market structures.

Pointing out that as for investment in broadband services, the Government urgently needs to take a critical lead in establishing an appropriate broadband policy that will lead to a favorable operating environment for investors, and encourage service uptake to drive further investments in this direction.

“Going by forecast that wireless broadband services alone can directly contribute additional N190 billion to the GDP by 2015, which will represent 1.22 per cent increase and 1.7 per cent growth in non-oil sector, with indirect contribution as much as N410 billion,” he said, adding that during which time, one could only imagine the enormous impact of full proliferation of these services on the Nigerian economy.

Adeola gave an instance with the professed Main One success story, noting that this aptly exemplifies the opportunities in the connectivity business today and further investment in ICT as well as other sectors of the nation’s economy.

“It presents a landmark indication of what the future holds for investment in Nigeria, setting the pace amongst laudable projects and promoting overall investor confidence in the Nigerian economic landscape,” he said.

Examining trends in Nigeria’s investment environment, he highlighted the influential factors behind these trends, stressing that his objective is that this would help in understanding the forecast for the future of investment in Nigeria.

He listed some of this highlights to include broadband services and ancillary infrastructures in the next decade.

He noted that a number of Nigerians and business community may have received, perhaps with some doubt, the International Monetary Fund (IMF) declaration in October 2010 that Nigeria’s economy is the 3rd fastest growing in the world, as well as other reports that Nigeria, together with China and India, was forecasted to lead global economic growth in the next decade.

“Since we are not all economists, I am sure that our collective curiosity must have justifiably been spurred by the evident decimation in the quality of life of the average Nigerian and overwhelming failure of socio-political and economic structures in the country today,” he said.

However, he added that the reality, as the IMF and other local and international analyst have pointed out, is that the Nigeria economy continues to see significant growth in the wake of global recession, stimulated by the ever increasing global demand for crude oil and the attendant impact on its United States dollars price per barrel.

He cited the recent forecast provided by Morgan Stanley, Nigerian economy is expected to overtake South Africa’s by the year 2023 with similar report by Bloomberg indicating that consumer spending in Nigeria will continue to expand over the next 5 – 10 years.

He emphasised that expert forecast on Gross Domestic Product (GDP) growth, even with current levels of infrastructure challenges, to increase to 8.4 per cent in 2011 and 8.5 per cent by the year 2012.

Adeola said consumer confidence is forecast to rise as Naira is expected to strengthen against the dollar at N153 per $1 by end of Financial Year (FY) 2011 and N150 per $1 by end of FY 2012.

“In terms of the much needed Foreign Direct Investment (FDI), the country made it to the top 20 global destinations for FDI in the last 10 years, receiving one of the largest amounts of Foreign Direct Investment in the Africa continent,” he said.

As said by the United Nation Conference on Trade and Development (UNCTAD), recently, inflows of about USD 6 billion were recorded in 2009 alone, making the country the 19th highest recipient of FDI in the world for that year.

“This is however, USD 7 billion lower than other oil producing countries, including Angola, which has focused on improved infrastructure and sector diversification; away from primary oil production,” he noted, adding that this is contrasted with Nigeria, as growth in the FDI was largely oil and gas sector driven with a few non-oil sectors in areas including telecommunications, banking and financial services, and real estate amongst others.

The key catalysts to the impressive run of FDI witnessed, he said, in the last decade included the otherwise stable political environment.

“This comes at the heel of return to democratic rule in 1999, and the series of policy and regulatory reforms that were embarked upon by the new government to sanitize both the financial services sector and revamp the telecommunications sector through a modestly transparent liberalization initiative,” he said.

Adeola, who is the chairman of MainOne Cable, said that other positive influences on growth included the emergence, albeit at a slow pace, of middle class structure, together with the high return on investment profile of the country as an emerging market with ample population and relative supply of skilled labour.

Further, he said, failure of market regulation in the capital market and the attendant crisis were not very helpful as the financial market uncertainties with the latest CBN reforms with the failure of critical infrastructure mostly energy, and infrastructure; growing public insecurity and, most importantly, the slow pace of core ICT development, technological innovation and unimpressive investment in infrastructure growth.

Notwithstanding the foregoing, Adeola expressed confidence that the global investment direction is increasingly focusing on the emerging markets, including Nigeria.

This, he said, is much supported by the most recent economic success of the BRICS countries, namely Brazil, Russia, India and China.

“Due to the investment potentials that are driven by her growing population and strong human capital resources, Nigeria has a high return on investment profile. In particular, her improved oil sector performance should readily provide significant government funds to support infrastructure growth,” he said.

Future investment growth in the country, he said, would itself rely on investments in pervasive deployment of ICT infrastructure, particularly those that support the mass distribution of innovative broadband services critical to improved efficiency and overall productivity in both public and private enterprises.

‘It is no longer news that, just as “electricity a century ago, broadband is a foundation for economic growth, job creation, global competitiveness and a better way of life. It is enabling entire new industries and unlocking vast new possibilities for existing ones. It is changing how we educate children, deliver health care, manage energy, ensure public safety, engage government, and access, organize and disseminate knowledge”

Going by a landmark study published by the World Bank in 2009, for every 10 per cent increase in Internet penetration, there is a resultant 1.3 per cent growth in GDP.

This is in addition to the European Commission estimate of 2 million jobs and GDP growth of EUR 636 Billion in Europe by 2015 through increased broadband penetration, whilst Brazil in 2010 reported that broadband added 1.4 per cent to employment growth rate, and China claimed 10 per cent increase in broadband penetration contributed an additional 2.5 per cent to GDP growth.

“In fact, 10 per cent higher broadband penetration in a specific year has been found to correlate with 1.5 per cent greater labor productivity growth,” he said.

The statistics are numerous, and for developing countries in the low and middle-income brackets such as Nigeria, broadband is a key driver of commerce and economic development, thus a veritable Foreign Direct Investment tool.

“Broadband therefore represents a new frontier for investment in the Nigerian economy in the next decade,” he said.

With the foregoing in mind, he said, investment in broadband services and technology itself is expected to grow in Nigerian in the next decade, mostly if the current level of service penetration posted at about 1 per cent to 2.8 per cent by the year end 2010 is anything to go by, and given the over 150 million people population that the country is blessed with.

Existing investment profiles, he noted, in the industry have shown that efficient management will guarantee return on investment, so much as the tremendous increase in Nigerian mobile phone subscribers which is currently over 90m has equally demonstrated for all how the right policies, and the right partnerships between the public and private sectors could result in exponential growth, job creation and a contribution to GDP.

“This can happen with broadband as well,” he declared, maintaining that based on investment potential in broadband, by recent forecast, the information and communications sector; telecommunications, media, Internet to name a few, in Nigeria is expected to grow by about 52 per cent by the year 2015.

He cited a World Bank Report, which stated that about 94 per cent in the United States (US) indicates there is still a wide gap to be bridged if the country is to compare favorably with the developed nations in terms of socio-economic growth and advancement.

The digital age, he said, is here and the global dependence on ICT should not be lost on Nigerian investors as it would take shape in Nigeria sooner than is imagined.

“… And will underpin investment opportunities within the next decade. In this new dispensation, enterprises in Nigeria will need to deploy ICT technologies and solutions dependent on broadband services quite rapidly to remain globally relevant,” he said, just as diverse investment opportunities will therefore continue to exist in broadband infrastructure, services and products, medium like outsourcing and content among others. Adeola insisted that the Nigerian market would remain a suitable target for future global investment as the concept of one global ICT village continues to be redefined and global footprint becomes more paramount for international investors in the next decade.

Remmy Nweke
ITREALMS Online ... delivering news for ICT4D

3 comments:

ruthduff said...

It will certainly give you a checklist of all the internet sites that are using facetime download for pc That suggests you could not obtain all the attributes.

Unknown said...

www.manabadi.com results One of the best websites for the students to get their result instantly is manabadi.com. The students can easily get their result just by entering some of the details like hall ticket number and date of birth in the provided fields.

Unknown said...

Get the Guide to Official Source on FaceTime for Android Download App. facetime download for pc
Also know about FaceTime App for PC, iPhone, Windows,

Featured post @ITREALMS

Five tips for small business owners online - ITREALMS

Sponsored@ITREALMS ... making leadership SENSE with digital news! Entrepreneurs can benefit from new ideas on ways to address a particular i...