The manufacturing industry is crucial to a nation's economy. It plays a significant role in generating employment, increasing productivity, and driving economic growth. In Nigeria, the manufacturing industry is a critical sector that contributes significantly to the country's gross domestic product (GDP) through job creation, wealth creation, and increased tax revenue for the government.
It has equally been identified as a key sector in the nation's quest for diversification away from oil dependency. It can enable a country to reduce its reliance on imports, improve its trade balance, and increase its overall competitiveness. Manufacturing is almost all things good.
Last week, I passed by the ever-busy Computer Village and saw shop after shop loaded floor to top with laptops. I thought to myself, what happens if there is an incident, say fire? Do they have insurance? I shuddered to think of the sheer loss.
Insurance, experts insist, has the potential to transform the economy. The bulk of Nigerians respectfully disagree. This is reflected in the number of people who do not have any form of insurance. To change the story, perhaps, it is time to reform the way insurance is managed in Nigeria.
Technology is an almost indispensable part of human history. It has however never quite progressed as projected. It almost always manages to beat expectations. The automobile, the television and even the computer all defied expectations. One of the biggest fears about technology was always about job loss. This fear never quite materialised.
Technology always manages to achieve net job gain. Rather than take jobs, technology constantly creates jobs and sometimes even whole new industries thus boosting productivity. After all is said and done, technology is now an ally, an ally to humans, an ally for human development.
On the flip side, a major challenge for development is poverty. it has been described as easily one of the most prevalent and challenging issues in the world. Beyond the definitions and categorisation, however, the stark reality is that poverty is deprivation. According to the United Nations (UN), “To be poor is to be deprived. And the worst kind of deprivation is financial exclusion.”
It is precisely the desire to curb, curtail or else eliminate financial exclusion that has financial inclusion has become a real big deal in the last decade.
And why not, traditional banks have struggled to reach large segments of the population, both in the urban and rural areas. They have struggled to reach the unbanked. They have struggled to provide services beyond the formal settings.
Banks have been unable to achieve financial inclusion. New ideas are needed. New methods are required. New technologies must come to play.
Thankfully, it is already beginning to happen. It started with payments. In the first instance card and later gradually online payments until eCommerce started to buzz. Interswitch is a pioneer in this space. Now, it has graduated to the level of firms, technology firms, offering the full range of financial services.
Today, these firms, technology firms offering financial services are aptly referred to as fintechs. They are at the root of disruption ravaging the financial services sector and are spreading fast. They are working actively to change the narrative. They seem committed to contributing to efforts to close the financial inclusion gap. They are emerging as the real MVP of financial inclusion.
Fintech, according to Investopedia, is used to describe new tech that seeks to improve and automate the delivery and use of financial services.
Fintechs are however not only technology-driven but equally deeply customer-focused, data-powered and service-oriented. They are also currently springing up like mushrooms across the country. This is not surprising as emerging markets, such as Nigeria, are the today the hotbeds for producing smart and simple financial solutions at an incredibly rapid rate. This makes sense in a country where so many are currently financially excluded.
In using modern technologies innovatively to enhance the delivery of financial products and services, fintechs find themselves not just providing alternative finance but in direct competition with banks.
This need not be the case. Yes, for a long time, fintechs offered mobile-only propositions because they lacked the legacy infrastructure and associated costs of the banks. Banks, on the other hand, lack the technology and agility of the fintechs.
But now, the future is in collaboration. No, not a competition, but cooperation and collaboration. At this point, banks and fintech must find a way to shake hands and get things done. There are huge opportunities to bridge the gap if the parties will collaborate. They must go together if the goal is true financial inclusion.
The opportunity is huge. Unconfirmed reports indicate that over 90 per cent of transactions in Nigeria are still cash-based. The opportunity to provide financial services is enormous. Every player in the sector must therefore actively collaborate to bring in a substantial portion of the 90 per cent into the formal system.
Here again, fintechs are showing the way. The driving payments as a strategy to boost financial inclusion. This is precisely why the emergence of new players like Opay is welcomed. A new fintech that entered the market with a completely new business model, one that may just be the way to go.
Opay is ensuring that a growing number of people to use its digital payments solution by offering everyday services. Think ORide, OFood, OBus and others.
Fintechs are enabling payments, increasing the number of people with access to financial services and creating jobs. Consider the massive number of agents that now dots the landscape. It is therefore not far-fetched to think that fintechs are driving financial inclusion and jump-starting efforts to free people from the clutches of poverty.
Besides, fintechs are pushing the frontier. They are rapidly expanding the borders from basic financial service such as payment to lending, savings and insurance among others. They can leverage data analytics to provide personalised loans, improve the loan disbursement timeline and promote prompt, somethings almost same day quick loans.
Firms such as Renmoney are in this space, promoting unprecedented access to quick loans. It is now so easy for anyone that desires quick loans (business or personal) to access it.
Financial inclusion, according to the World Bank, means that “individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered responsibly and sustainably.” Fintechs are making this a reality for millions of Nigerians. It is beyond commendable.
Without a doubt, the association between financial inclusion efforts and the reduction of poverty rates is a key driver for the future expansion of digital financial services (DFS).
Progress has been made. Reports indicate that about 50 per cent of adults in the country have access to financial services. It can be better. A lot more still needs to be done.
Thankfully, some banks have seen the light. They are promoting services using USSD, such that customers with the most basic mobile phones can perform essential banking services.
Here, consider Stanbic IBTC’s *909# among others. ALAT by Wema, a first in its class, is also worthy of study. With USSD and other mobile financial solutions, people can access top-notch financial services without stepping into a bank.
Also, now that the telecoms behemoths are getting into mobile money and digital financial services, a huge leap is imminent. They are expected to help advance the quest to reach the unbanked with financial services. this is plausible as there are currently over 150 million connected lines in Nigeria.
The licensing telecoms service providers is a great way to democratise access to financial services in Nigeria. There are reports that MTN plans to roll out over five hundred thousand MoMo Agent across the country, through it Y’ello Digital Financial Services (YDFS) subsidiary.
This is the future. The future is already here.
Undeniably for the benefits of technology to successfully and fully harnessed to improve financial inclusion in Nigeria the right developmental and regulatory framework must be in place.
As the world looks to end poverty, technology and fintechs are in the thick of things. Access to financial services is on the rise. The government should focus on enabling the safe and sustainable development of this critical section of the economy.
Policies that seek penalise for using e-payment must be abolished, regulations that restrain e-commerce must be scrapped and the Federal Inland Revenue Service (FIRS) must shelf the plan to tax online transactions.
Fintechs and indeed all technology solutions providers deserve a break. They are today driving financial inclusion. They are heroes of Nigeria’s financial inclusion success story. They are helping to end poverty.
*Elvis Eromosele, a Corporate Communication professional and public affairs analyst lives in Lagos.
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Technology enthusiasts are big on the power of new and emerging technologies to disrupt existing realities. Consider how personal computers, smartphones, and the internet caused disruptions. Today, we are talking about autonomous vehicles, Three Dimension (3D) printing, robotics, artificial intelligence, wearables, and the likes. Oh, the possibilities!
History has shown, however, that people can also be the cause of disruptions; eccentric, unconventional, uncommon, nonconformist and courageous people.
While the jury is still out on whether, the Minister of Communications and Digital Economy, Dr. Isa Ali Ibrahim Pantami fits the bill, his actions so far, nonetheless, point to a deep empathy for the long-suffering Nigerian telecoms consumer.
On resumption of office, he quickly kicked against and later formally kicked out the plan by telecoms service providers to introduce new charges for Unstructured Supplementary Service Data (USSD). The USSD is used by customers for financial transactions.
The Association of Licensed Telecom Operators of Nigeria (ALTON) tackled the minister. ALTON’s Administrative Secretary, Gbolahan Awonuga, slammed the minister for interference,
noting that the N4.00 charge was determined by the Nigerian Communications Commission (NCC), the country’s telecom regulator alongside stakeholders under an Industry Working Group (IWG), before the minister’s appointment.
According to Gbolahan, “The issue is not policy, but regulation which has a legal document backing it. We are confusing regulation with policy. There was a determination on this USSD, even before the appointment of the Minister,” he stated.
Next, the minister directed the NCC to work at reducing data cost and curb incidences of illegal deductions from customers' account within five working days. This is something that telecoms consumers have complained about for eons.
ALTON’s Chairman, Gbenga Adebayo insisted that the service providers were not making illegal deductions, contrary to complaints being made by subscribers. He explained that the smartphones being used by the subscribers were to blame for such deductions.
In his words: “If you are using a smartphone naturally you have all these updates and downloads that are unsolicited but you get it whether you want it or not but that is what keeps your phone up-to-date. Most of those deductions are traceable to that.”
On the proposed slash of the cost of data, ALTON said, “Price is not a policy issue; price is determined by market forces. Price cannot be set by policy pronouncement.”
Dr. Pantami latest directive is an order to service providers to stop further exploitation of subscribers through the automatic activation of the voicemail service on their platforms.
By law, the voicemail service should be optional on operators’ platforms. But in practice, it has historically been offered as a mandatory call feature by MNOs resulting in loss of millions of call units by subscribers to the advantage of operators.
According to the statement credited to Dr. Pantami, “The Voicemail service should be accessed at the discretion of the subscriber and not by default.”
Expectedly, ALTON again quickly responded to the minister’s directive insisting that the minister’s intervention amounted to unnecessary interference.
ALTON said that voicemail not a major “policy issue” within the meaning of section 23 &24 of the Nigeria Communication Act (NCA) which empowers the Minister to formulate “general policy for the communications sector…” after consultations organised by the NCC.
ALTON appears poised to tackle the Minister at every point. It has certainly given Dr. Pantami a frosty welcome.
The association has also proven feisty. It appears poised for a fight at every turn. It is unwilling to budge. It would not relent. In its books, the operators can do no wrong.
It is not surprising, ALTON is anxious to defend its members, promote their interest and advocate their position. ALTON is doing its job, as an advocate for its members.
Sadly, only one side has an advocate, the service providers. Who is talking on behalf of the customers?
No one!
An association of telecoms customers and subscribers would if it existed. The NCC should if it were doing its job. Currently, however, no one is speaking for the telecoms consumer. The minister is thus automatically a hero to the much-deprived Nigerian telecoms consumers and customers.
Some say the Minister may have political ambition and he is seeking public appeal. Well, he is getting it. He deserves it.
This is because the issues he has raised are germane, valid and real pain points for the telecoms consumer, over the years.
From the customers’ point of view, the planned introduction of USSD charges was uncalled for. The Minister knocking it down was simply fulfilling the aspiration of the customers.
Illegal deductions and high cost of data are a perennial and vexed issue in the sector. The operators conveniently ignored talks about it.
Plus, Nigerians generally believe that data is overpriced. The operators see no need to justify what they charge. It's a take or leave it sort of transaction, a supplier's market. This is why ALTON’s talk about market forces is untenable.
Nigerians have complained of data disappearing fast for years. What has the NCC done about it? The operators and the association constantly offer excuses.
Now that someone is speaking for the customers, resistance is expected. So, ALTON's aggressive posturing is understandable. It has to protect its source of revenue. The telecoms operators are content to hide behind the association. They won't want to be seen openly or directly contending against the Minister.
While it is in order to commend the Minister for his willingness to address these vexed issues, it is equally prudent to call for caution. There are rules to this game. And since we are not in a “juggle” everything can't be achieved by administrative fiat.
The Minister must meet with the ministry’s legal team. He should get them to look at the law and counsel him where he can intervene directly and where he would need the regulator to work out an agreeable solution.
He should meet with the commission, to share his vision for the ministry. Together, they can then work out what is possible within the ambit of the law. Immediately afterward, the Minister can meet with the telecoms operators and then the general public.
The Minister must understand that the operators do have genuine grievances. There are issues around right of way, multiple taxation, and the regular wanton vandalisation of telecom infrastructure across the country.
He must support efforts to declared telecom infrastructure as a critical national infrastructure. He should be willing to work assiduously to help improve ease of doing business for telecos.
ALTON, on its part, however, can make its point and indeed make its position known without being antagonistic and unduly confrontational. ALTON should be an advocate and not an antagonist.
The Ministry was appointed to work for all Nigerians, the customers and the business people alike.
The purpose of disruption is to dislocate the status quo, realign forces and enforce change.
If the Minister's disruption brings about change then it is a win for the Nigerian telecoms consumer, in particular, and the industry at large. *Elvis Eromosele, a Corporate Communication professional and public affairs analyst lives in Lagos.
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