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Wednesday, May 06, 2009

Recession: ICT4D to the rescue


The raging effects of global recession have left ICT stakeholders with varying options. For most of them, ICT for Development (ICT4D) is central to economic change, reports REMMY NWEKE.

Since the proclamation of economic recession by the super powers of the world led by the United States (US), at the last quarter of 2008, the truth remains that all has not been the same again. Millions of workers have been sacked globally across all sectors of the economy including Information and Communication Technologies (ICT) sector.

But one unique aspect, according to experts is that ICT for Development (ICT4D) holds the key to rebirth.

In the beginning it was fear upon fear, arguments and counter-arguments, but as time went on, experts are coming to terms with the reality as some have began to emerge with various solutions to the quagmire.

Economic recession has been defined as the state of the economic declines, which encapsulates a widespread decline in the Gross Domestic Product (GDP), employment and trade lasting from six months to a year or even more, according to experts at Princeton University.

While the free open source-based encyclopedia, Wikipedia, stated that in economics, a recession is a general slowdown in economic activities in a given country over a period of time, or a business cycle contraction.

“During recessions, many macroeconomic indicators vary in a similar way. Production as measured by GDP, employment, investment spending, capacity utilization, household incomes and business profits all fall during recessions,” according to experts at Wikipedia. Noting that often than not, governments usually respond to recessions by adopting expansionary macroeconomic policies, which may include increasing money supply, increasing government spending and decreasing taxation.

Therefore, it could be rightly put that reductions in public expenditures due to economic recession regularly lead to setback of infrastructure investments as well as maintenance of even the existing ones.

In Nigeria, it is no longer news that virtually every ICT tool in the country is imported and in importation foreign exchange counts a great deal, especially when currency like in the case of Naira was already on the floor before the meltdown was pronounced.

Yet, some school of thoughts within the ICT stakeholders strongly believe that ICT4D has the key, if not the solution itself. For instance, it is widely accepted that when people are stressed in any form, be it economically or psychologically, they tend to make more use of ICT tools in search of openings. Therefore, it goes that more people are likely to make more calls and go online often than before in search of greener pastures and opportunities.

Investigations conducted recently by ITRealms Online, indicated that the prevalent fallen state of the Naira has not been accommodating, thereby provoking the sky-rocketing of some ICT tools’ prices. Top on this list are the Personal Computers (PC) and allied accessories.

According to the investigations, local PC manufacturers are lamenting the effect of the recession while those trading in telecommunications sub-sector, seem to be smiling to their banks without much ado, although their operating expenses are yet to be ascertained since they import even mobile phone casing for promo.

This left observers to say that their smiles could only be temporary as long as the recession lasted.

It was further revealed that staff recruitment in most of the telecommunications firms have been put on hold, at least, in the first quarter of 2009.

Nigeria-based Original Equipment Manufacturers (OEM) also called PC assembly plants started to feel the effect in less than six months after the United States officially declared that its economy is in recession. Even as some industry experts predicted it would be noticeable around September, that is, in the fourth quarter of this year in an economy like Nigeria. This was confirmed by one of the management staff of a computer assembly plant in Lagos.

Nigeria currently has several computer plants, but only four were recognized by the government during the immediate past administration of Olusegun Obasanjo, namely Zinox, Omatek, Brain and Beta. While the only supposedly mobile phone plant by Chinese ZTE has since closed shop.

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 four months into the New Year.

All the traders who commented attributed the unprecedented lull in business to the impact of the economic meltdown and the rise in the dollars, which currently exchange for about N150 per dollar on official rate, but at the parallel market it is higher and that is where most micro entrepreneurs go.

According to them, if you are to import as it were, banks normally demand for visiting visa of the country where the import would be coming from, in order to exchange dollars, even when they just need to place an order, hence it is somewhat difficult for them to approach banks for the official rate to even take effect.

“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,” one of the computer importers at the popular Computer Village, said, appealing to Central Bank of Nigeria (CBN) to come to their aid. Just as a Hewlett Packard (HP) D7094 laptop which sold at N80,000 prior to December 2008, now sells for between 125,000 and 130,000, to name a few.

National President, Association of Telecommunications Companies of Nigeria (ATCON), Dr. Emmanuel Ekuwem, called for caution whilst tasking the government to probe salaries of Nigerian mega-chief executive officers of high-profile companies, mostly banks, so as to keep whatever level of recession Nigeria currently experience in check.

As indicated by him, the alarm has become imperative because the US experience has shown that mega-CEOs, especially in the banking and financial sector were in the root of the crisis and cannot come low despite bail-out by the Obama-led government.
Arguing that most of the mega-CEO’s remunerations are unrealistic and if not checked now may culminate in further distress in the mega-banks, pointing out that most of them live in out of reach affluence, which may have a long time effect.

Ekuwem, who is the Executive Vice Chairman, Teledom International Group, also said that the current ravaging global economic meltdown has negatively affected the industry, even though some school of thought may disagree, suggesting that Nigeria was already down before the meltdown, yet evidence has shown that the nation’s kind of meltdown may be an accumulated one due to some factors.

These, he listed to include the daily depreciating and weakening value of Naira against the United States dollar as well as the nation’s import dependent economy. Asserting that 99 per cent of facilities in ICT sector, for instance, are imported into the country, which does not augur well for the country, “It means that our ICT industry is import dependent,” he said.

Therefore, he said, that Nigeria’s ICT industry is negatively affected by the global meltdown. Pointing out that export would improve the value of Naira, just like importation no matter how little at this time of recession, would continue to weaken the Naira.

He advised the government to focus more attention on how to improve the few science parks in the country and increase the nation’s importation quota, at least, in construction of Very Small Aperture Terminal (VSAT), some antennas, local casing of some ICT tools, which could be used for mobile phones and PCs such as cover casing.

For the Regional Director, D-Link West Africa, Mr. Chris Uwaje, cybersecurity challenges should be accelerated to become the critical mass of Nigerians daily lives, warning that as the global financial meltdown deepens the key players would try to outsmart themselves by playing hide-and-seek of looted economies, especially via online.

He said, developing counties like Nigeria would remain vulnerable to cybercrime, unless urgent and smart steps are taken, describing the current meltdown as having similarity with cyberspace menace.

“The current global meltdown means different things to different people, just as cybercrime and cybersecurity mean different things to different governments,” he declared.

According to him, the bailout adventure may lead nowhere for Nigeria, unless multi-parallel actions of leadership political-will for re-designing, rebuilding and fortifying National Information Infrastructure (NII) as well as building commensurate Information Society code-warriors are taken seriously simultaneously.

Based on his personal evaluation, cybercrime and cybersecurity activities will increase by about 53 per cent in the next half decade (2010-2015), noting his projection was partly derived from lessons learnt from Bernard Madoff gate, assumed to be the largest fraud schemes in history. Insisting that in reality, many investment businesses are doing badly and will go down, but not before they deal a damaging blow to their victims.

On the central role of Information Technology (IT) in the inter-play of global meltdown, he outlined some advice including strengthening federal leadership on cyber security, declaring that cyber infrastructure should form a strategic asset and establishment of the position of national cyber advisor, who will report directly to the president and be responsible for coordinating federal agency efforts and development of national cyber policy.

Addressing members of the Abuja branch of the Institute of Directors (IOD), recently at a session tagged: 2009 Information and Technology Evening, the Executive Vice Chairman, Nigerian Communications Commission (NCC), Dr. Ernest Ndukwe, said advancement in modern technology has put Nigeria at par with the rest of the world, even as deployment of IT is the panacea for executives to scale through the current economic meltdown.

Equally, he said that the Nigerian Directors, whether in Public or Private practice have no excuse to fail, because they also have enablement like their counterparts in any other part of the world. Pointing out that instead, the Directors have the advantage of assembling these technologies, which if properly utilized, could lead to efficiency and heightened productivity gains.

“The primary responsibility of Senior Executives and Directors is to run the affairs of their organizations efficiently by employing most modern facilities to enhance efficiency and consequently lead to better corporate performance,” Ndukwe said.

Noting that liberalization of the ICT industry since 2001, has led to widespread availability and networks, just as he enumerated some of the tools to include Blackberry, iPhone, Universal Serial Bus (USB) Modem Stick, Enterprise Application Software, Mobile Enterprise/Applications (Mobile ERP) e-Business Tools, e-hr, e-Audit, e-Banking and Internet Banking, among others, and if properly harnessed would lead to productivity gains and workflow efficiencies.

This, he noted, can only happen when Executives have access to their e-mails, calendars, and documents at a moment’s touch, emphasizing that a recent survey of Blackberry users, for instance, showed that on average, they recovered about 54 minutes a day, by being able to work remotely, which translates to a gain of 196 business hours a year.

“This tool, also improves workflow efficiency, because executives were able to remain fully functional members of their team while they were out of the office,” he said, outlining the merits USB modem stick, which has fully demystified the Internet technology as the enhanced stick provides it on the go

Looking at the stick closely before the Directors, Dr. Ndukwe said that the USB Modem Stick like the ones provided by all major telcos in the country presently, is “broadband on the Go.”

Powered by 3G technology, he explained that the sticks are almost identical to the data storage USB sticks, which enable the user to browse the web, send e-mails and download or upload large files at high speed.

Arguing that no forward looking business executive can succeed without using ICT for his business, noting that even with the presence of secretaries and Personal Digital Assistants (PDAs), gone are the days when executives can successfully work without the use of ICT business tools.

“For the first time in our history, Nigeria is at par with the rest of the developed world during a global revolution. Thanks to our participation in the global telecommunications revolution, Nigerian Executives have access to the same tools employed by successful business and business Executives in the developed world. We can do what they do, access the same data that they do at the same time as when they do it,” he said.

Going by the above scenario, the tendency is that most CEOs would cut down on their trips and even when outside the office environment can still have access to some of their electronic files.

In the first instance, achieving this means investing in ICT to drive such initiatives and until, local production of ICT4D tools is paramount if the current wave of recession would not be drastic on our economy, even as focusing searchlight on mega-CEO could help in discovering their excesses before it gets out of hand.

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