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Wednesday, December 10, 2008

Liberalizing ICT, the Nigeria example

Features of the week:

REMMY NWEKE reports that the role of Nigeria’s government in facilitating growth in the Information and Communications Technologies (ICT) sector through liberalization is worthy of emulation by other countries in the sub-region and continent wide.

AT the turn of the 21st century, one thing that seems to be going on well for African countries, has been the liberalization of the Information and Communications Technologies (ICT), especially for Nigeria.

Emerging from what experts described as coming through the backwaters to a regional hub, Nigeria was recently commended by the Secretary General of the global telecom regulatory and United Nations (UN), International Telecommunication Union (ITU), Dr. Hamadoun Toure, when he visited Nigeria at the first quarter of 2008, saying that he was proud of progress that Nigeria has made since liberalizing its telecommunications sector at the return of democracy in 1999.

An aspect of the liberalization that drives this evolution has been the positive regulatory frame work. And tracing the role of the regulator in Nigeria’s telecom revolution recently in Lagos at the Ninth Distinguished Electrical and Electronics Engineers Annual Lecture (DEEEAL 2008), the Executive Vice Chairman (EVC) of the nation’s regulatory agency, the Nigerian Communications Commission (NCC), Dr. Ernest Ndukwe, noted that no modern economy could be sustained today without an integral telecommunications infrastructure.

Robust telecom begets economic growth:
Robust telecommunications network, he said, is important for the economic growth of nations and constitutes a base infrastructure that supports the world economy.

Describing communication as a vital aspect of human existence and effective telecommunications services, which enhances living standards and improve productivity as well as efficiency in other sectors.

“Thus communications and the technologies that support it, occupy a strategic position now more than ever in every aspect of human existence; and nations and businesses would become less competitive and lag behind others if they fail to avail themselves of this vital infrastructure of the Information age,” he said.

For Nigeria, ICT penetration in 1999 when the transition to democratic rule occurred was very low and less than 1 per cent of the population of the country, that had access to a telephone.

Comprehensive legislation:
Ndukwe pointed out that the new government led then by Olusegun Obasanjo, identified that this was a major hindrance to development of the nation and decided that there was an urgent need for transformation in the ICT sector so as to stimulate the economy and open up new possibilities across her business, political, social and economic spheres.

By year 2000, he said, Nigeria had only 400,000 connected telephone lines and 25,000 analogue mobile lines, while the total teledensity stood at a paltry 0.4 lines per 100 inhabitants.

“Connection costs were prohibitively high, and waiting time for fixed lines ran into years. Today, thanks to several factors which include government sector reform policy, an enabling investment climate, the worldwide trend of rapid development in ICT, and the huge potential of the Nigerian market, the story is very different,” he said.

This, he also said, was followed by comprehensive new sector legislation, the Nigerian Communication Act (NCA) which was enacted in 2003, repealing the 1992 NCC Act. The new Act was to further the full liberalization of the sector and provided the ground rules for the orderly development and governance of the telecommunications sector.

In the past eight years from 2000, NCC, he said, licensed several Digital Mobile Operators, otherwise known as the Global System for Mobile communications (GSM), Fixed Wireless Access Operators, Long Distance Operators, Internet Service Providers, a Second National Carrier and recently, Unified Access operators.

“All these have had the collective effect of ensuring full competition in all segments of the telecommunications market. They have also had the effect of promoting rapid deployment of telecom services, resulting in exponential growth in the number of telephone lines in Nigeria,” he said.

The chief regulator said, that between Nigeria’s independence in 1960 and the end of year 2000, the number of connected lines grew at an average of 10,000 lines per annum, stressing that since 2001 the telecommunications industry has witnessed an average growth rate of about 8 million lines per annum.

Strong regulator, strong growth:
As said by him, as at the end of October 2008, Nigeria had attained about 59 million lines, with 57.6 million strictly digital mobile lines, even as the teledensity figures soared from the 0.4 lines per 100 inhabitants recorded in 1999, to 42 lines per 100 inhabitants by the end of October 2008.

Ndukwe informed that the progress recorded in the industry was brought about by government liberalization of the sector and opening up of the market to private investment. Thus, the market reform has helped to accelerate investment flow into the sector, resulting in the rapid roll out of multifarious communications services.

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