Nigeria Office for Developing the Indigenous Telecom Sector: to be or not to be

Background

On 6^th May, 2021, Federal Government of Nigeria through the Minister for Communications and Digital Economy (“Minister”) issued a National Policy for Promotion of Indigenous Content in Nigerian Telecommunications Sector (“Telecom policy”). Even though the Telecom policy ought to become operative on the date of signature, there is no execution date.

The Telecom policy is consistent with federal government’s desire to ensure that we produce what we eat and consume what we produce and, to ensure Nigerians play active major roles in design and manufacture of devices, manpower needs and to become active participants in the sector.

The Minister’s Authority to issue the Telecom Policy

The Minister’s authority to issue the Telecom policy derives from:

1. section 148 of the Constitution of the Constitution of the Federal Republic of Nigeria (as amended) (the “1999 Constitution”), which also allows the President to assign responsibility for any business of the Government of the Federation to the Minister;
2. the President’s mandate to the Minister in the National Digital Economy Policy and Strategy to work with all relevant government agencies to ensure rapid expansion of Nigeria’s digital economy to utilize opportunities on the continent and globally; and
3. sections 23 (a) and 25 (1) of Nigerian Communications Act, 2003 (the “NCA 2003”), that repose on the Minister the role of formulating, administering and monitoring general policy for the communications sector (the “sector”), together with the function of notifying the Nigerian Communications Commission (“NCC”) on the general policy direction of the federal government for the sector.

As well as the President’s Executive Order 003 on the “Support for Local Content Procurements by Ministries, Department and Agencies of the Federal Government of Nigeria” and the Presidential Order 005 for the “Planning and Execution of Projects, Promotion of Nigerian Content in Contracts and Science, Engineering and Technology”.

Benefits of the Telecom Policy

The federal government claims that the Telecom policy will stimulate rapid growth in critical areas of:

• manufacturing that includes SIM cards, smartphones, recharge cards, parts, fibre optic cables and masts;
• services and software for the sector that include business support services, operations support systems, performance monitoring, customer resource management, data analytics and network inventory management;
• people with emphasis on skills rather than certifications and support for emerging technologies, Nigerians as key employees in the sector and;
• research and development for digital innovation and entrepreneurship.

Office for Developing the Indigenous Telecom Sector

The Telecom policy established the Nigeria Office for Developing the Indigenous Telecom Sector (“NODITS”) as a special purpose vehicle (“SPV”) under the NCC with the responsibilities to stimulate the development of indigenous content in the sector.

NODITS, the Minister’s supervisory child, will implement the Telecom policy as well as the strategies, standards, guidelines and framework aimed at developing indigenous content in the sector.

Functions of NODITS

NODITS’ functions include, where relevant to:

1. support the creation and implementation of guidelines for the development of indigenous content for the sector;
2. stimulate growth of the sector through a focused, sustainable and incentives-based approach that encourages active participation of indigenous telecom operators;
3. liaise with the Office for Indigenous Content Development at NITDA by a quarterly meeting for synergy and convergence of digital technologies;
4. facilitate sourcing of indigenous products, manpower and services across entire value chain of the sector;
5. evaluate and endorse indigenous content plans for operators in the sector;
6. create a platform for research and capacity building programs that prepares Nigerians to play a leading role in the sector;
7. promote innovation and entrepreneurship in the sector;
8. promote indigenous phones and other telecommunications equipment;
9. create and update a roadmap for implementation of the Telecom content policy and ensure active monitoring and enforcement mechanisms for promoting indigenous content in the sector; and
10. monitor indigenous content compliance by operators and service providers.

NODITS: a breach of the Minister’s Relationship with NCC

Section 25(2) of the NCA 2003 imposes a limitation on the powers of the Minister because it provides that the Minister in executing his functions and relationship with NCC, shall at all times ensure the independence of NCC, in regard to the discharge of its functions and operations under the NCA 2003.

The Minister is to protect and not compromise NCC’s independence in any manner. Recall that sections 23(b) and 25(1) of the NCA 2003 enable the Minister to issue or communicate to NCC general policies only.

To our mind, the Minister’s creation of NODITS is not and could not have reasonably been conceived as a general policy but a specific policy action, outside the scope of the ministerial functions under NCA, 2003.

The Minister has, in spite of availability of public resources, exercised his functions under the NCA 2003, in gross violation of his duty to protect and not compromise in any manner the independence of NCC.

Unless, it could be supported – extremely doubtful in our view – that section 25(1) of NCA 2003 contradicts Constitutional powers of the President, on whose behalf, the Minister acted.

We consider the unwanted birth of NODITS, a breach of the Minister’s public duty which the Minister should immediately undo and apologize to Nigerians.

The Minister cannot and should not have invoked and relied on section 148 of the 1999 Constitution – a general duty of the President – to violate and breach his specific duty to exercise his functions under the NCA 2003, in a manner that protects the independence of NCC.

NODITS and NITDA’s content office

NOTDITS is to implement the Telecom policy’s fourfold areas of manufacturing; services; people; and research and development (the “broad paths”).

NODITS’ broad paths include all software development for the sector, research and development for digital innovation and entrepreneurship as well as strategic employment of Nigerians by Telecom companies.

The Office for Indigenous Content Development (the “NITDA’s content office”) at National Information Technology Development Agency (“NITDA”) claims that it is established as a special Purpose Vehicle under the auspices of the Minister to implement the Guidelines for Nigerian Content Development in ICT, 2013, (the “ICT Guideline”).

NODITS functions: an overlap with NITDA’s content office

Should superior arguments and authority sustain the Minister’s birth of NODITS, we insist that a cursory review of the ICT Guidelines and the vast and diverse functions of the NITDA Act suggest that the Minister’s NODITS should not have been conceived because NITDA’s content office bears the burden of ensuring that all ICT firms comply with the guidelines for Nigerian content development and to institute appropriate sanctions against companies that default.

NITDA’s content office’s responsibilities include:

1. promote creation of a minimum of 6 software engineering centres of excellence in partnership with Nigerian universities in year 2015 (the “software centres”). The software centres were to produce a minimum of 200 software engineers annually that develop for leading operating system platforms using current programming languages and world class methods;
2. partner with at least one international technology platform company;
3. maintain a curriculum to be reviewed by Local Content Software Taskforce;
4. review and rank ICT program across all universities in Nigeria in partnership with Computer Professionals Registration Council of Nigeria and COREN to ensure global competitiveness and industry relevance of IT related programs;
5. provide incentives for Nigerian companies to develop for leading and emerging technology platforms to help the country transition from being a consumer to a producer of technology;
6. promote and facilitate creation of specialized software firms through incubation or funding programs so as to increase local participation in highly sophisticated systems design and development;
7. lead and facilitate discussions on setup of indigenous ICT service providers spanning entire value chain ranging from hardware to software, networking to data management in order to drive greater local participation;
8. promote development of local firms that can provide goods and services to other major/multinational ICT companies and;
9. foster growth of value adding entities by encouraging innovation in areas of mobile messaging, call completion services, visual voicemail, convergence management, social telephony, convergent charging.

NODITS: an overflow into ICT Guidelines

NODITS’ national assignments are largely, issues the ICT Guidelines had settled, nearly, 18 years ago. It is noteworthy that, 18 years ago, the ICT Guidelines required multinational corporation and original design manufactures (“ODM”) to carry out value adding activities that contribute to job creation.

To empower Nigerians while the ICT Guidelines established an eligibility for existing tax reliefs for research and development activities for multinational companies with a fiscal incentive that allows up to 120% of qualifying expenses on R&D as tax deductible.

Multinational companies (“MNC”) are further required to submit a Local Content Development Plan to NITDA/NCC for their platforms and products as part of requirements for registration within Nigeria and pre-qualification for any project to be carried out with any MDAs.

It applied to MNCs’ and companies already registered and operating within the country together with a local content development plan for the creation of jobs, recruitment of local engineers, human capital development and value creation for the local ecosystem that should be submitted to NCC or NITDA.

Conclusion

We are not aware that NITDA and NCC ensure MNCs’ or Nigerian companies’ compliance to the ICT Guidelines neither had NITDA or NCC published any such information pursuant to its duties under the Freedom of Information Act and Fiscal Responsibility Act.

The Minister’s obvious good intentions are generally commendable yet, MDAs that include NCC and NITDA do not lack policies or guidelines neither are they sub-optimal in performance because of lack of policy directives or guidelines.

Our regulatory landscape is paved with sufficient framework that can stimulate the Minister’s desired goal – what is lacking is revival of political and regulatory will to act in the interest of Nigerians – a moral abuse of the principle of common good and objective of mutual co-existence, by institutions and affected citizens.

Members of Nigerian Bar Association, interest groups, professional bodies, telecommunication and ICT experts, government bodies and every Nigerian should assist the Minister to redeem the breach of his duties under the NCA, 2003, and ensure he implements and revives the political and regulatory will to streamline and implement all affected guidelines and frameworks – given his emergency from the NITDA.