Wednesday, April 01, 2009

Recession: PC prices sky-rocket

Despite assertions by some Information and Communications Technologies (ICT), experts that minimal meltdown would be felt, the sector is witnessing the impact of the current rage of recession in the nation’s ICT markets, especially on Personal Computers (PC) and allied accessories.

This revelation came as Commonwealth Telecommunication Organisation (CTO) inspired meeting of African ministers’ Electronic Governance (e-Gov) forum recently rounded off in the capital city of Rwanda, Kigali.

The 2009 e-Governance forum is the third in a row hosted by the Rwandan Ministry in charge of Science and Technology at the Office of the President, with focus on how African governments could fight global recession using effective governance through ICTs.

Investigations conducted by ITRealms Online, over the weekend, showed that the prevalent fallen state of the Naira has not been helpful, hence it has induced sky-rocketing of some ICT tools’ prices.

According to our investigations, local PC manufacturers have lamented the effect of the recession while those trading in telecommunications sub-sector are smiling to the banks without any atom of the meltdown in their outlook, except for the planned reduction of expenses, especially on foreign engagements.

As such, the investigation further revealed that staff recruitment in most of the telecommunications firms have been put on hold, at least, in this quarter.

In addition, ITRealms Online investigations revealed that Nigeria-based Original Equipment Manufacturers (OEM) had begun to feel the effect in less than six months after the United States officially declared that its economy is in recession.
But some experts within the industry predicted that it would be obvious around September this year in developing economy like Nigeria.

This was confirmed by one of the management staff of a computer assembly plant in Lagos.

Although Nigeria currently has several computer plants only four were recognized by the government during the immediate past administration of Olusegun Obasanjo, namely Zinox, Omatek, Brain and Beta.

For instance, a 10-inch laptop with the original Microsoft home edition operating system, which hitherto cost estimated N50,000 (about $500) now goes for N120,000 (about $1000). This shows an increase of over 110 per cent.

Further confirming this situation, traders at the popular Computer Village, Ikeja-Lagos, lamented that the current economic meltdown has taken its toll on them, as both traders and dealers were visibly complaining of exceptional low patronage in the last three months into the New Year.

A visit to the once boisterous largest computer market in the West African sub-region revealed that the market is now a shadow of what it used to be.

All the traders who spoke to ITRealms Online attributed the unprecedented lull in business to the impact of the economic meltdown and the rise in the dollars, which currently exchange for about N180 per dollar on official rate.

The chief executive, Amen Computer Network located at the village, Mr. Gabriel Igwe, said that at this time 2008, his company had recorded a turnover of over 100 million Naira, but this year nothing seem to be happening as he has made less than 10 million and has not been able to take delivery of a single container since January, 2009.
“Can’t you see that my staff and the labour men are all idle? If you were here this time last year you will hardly find a place to stand,” he bemoaned.

He also said that the devaluation of Naira coupled with the activities of men of the Nigerian Customs have crippled business for them.

“The increase in the value of the Naira has badly affected sales because the exchange rate is a determinant of the prices of our products,” he asserted and urged government and the Central Bank of Nigeria (CBN) precisely, to do everything possible about the situation as this could lead to social insecurity.

For Mr. Tayo Akande of Eminent Computers, the quiet period in activities in the market is lamentable and called on President Musa Yar’Adua’s government to intervene and arrest the continued decline in the value of Naira.

Additionally, our survey in the market and its environs among other computer accessories’ markets in the commercial centre of the nation, showed that a Sharp AR 5316E photocopier for instance, which formerly sold for N125,000 in December 2008, now sells for N155,000.

Also a Hewlett Packard (HP) D7094 laptop which sold at N80,000 before now sells for between 125,000 and 130,000, just as HP officejet K7100 printer which sold for N32,000 now goes for N45,000.

Some of the customers who spoke to ITRealms Online also complained about the astronomical increase in prices.

Mr. Tunji Ayeni, a student from Ondo State, who came to the market to buy a laptop said that what he saw was not what he anticipated, as the prices he got were very different from what a friend of his got when they came to the same market in November last year.

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