O
Omoleye Omoruyi
Guest
On July 5, 2021, Nigeria launched the Nigeria Office for Developing the Indigenous Telecom Sector (NODITS) as a critical step to localise production within its telecom industry.
Tasked with implementing the National Policy for the Promotion of Indigenous Content in the telecommunications sector, NODITS holds the responsibility of building local capacity for the production of critical telecom components such as SIM cards, smartphones, masts, fibre optic cables and telecom equipment.
The broader goal: reduce dependence on imports, develop Nigeria’s technological workforce, and stimulate the economy by fostering domestic innovation.
However, over three years since its inception, NODITS can only boast of producing SIM cards.
One of the primary successes associated with NODITS is the domestic production of SIM cards, which was bolstered by an August 2022 government ban on imported whole-body SIM cards.
This policy shift spurred local manufacturing and resulted in a SIM card market supposedly valued at ₦55 billion, creating direct and indirect employment opportunities and reducing reliance on imports.
[IMG alt="Engr. Babagana Digima with staff of NODITS
"]https://technext24.com/wp-content/uploads/2024/11/image-1.png[/IMG]
Engr. Babagana Digima with staff of NODITS
The Nigerian Communications Commission (NCC) reported that the policy alleviated the burden on foreign exchange and encouraged local businesses to enter the telecom hardware supply chain.
“Before NODITS’ intervention, nearly all SIM cards in Nigeria were imported. We set an ambitious goal to reverse this trend, and now 100% of SIM cards used in Nigeria are manufactured locally,” Babagana Digima, Head of New Media and Information Security at the NCC, said.
Digima, who previously headed NODITS, highlighted the commission’s ongoing initiatives to support local manufacturing in the telecommunications industry. He noted that NODIT has provided grants and incentives to various companies, including sponsoring the production of corrugated ordinal ducts and encouraging local manufacturing of telecom towers and fibre cables.
“We are currently sponsoring the manufacturing of corrugated ordinal Duct, and the company that will be established will be the first in Africa to manufacture such kind of product.
“We also encourage tower manufacture, and fibre manufacture, and have been in touch with Coleman Cables, which is currently manufacturing fibre cables. They have overtaken the only company in Egypt in manufacturing capacity and they are expanding. I am sure a lot of companies are very happy with what we have done, ” he added.
[IMG alt="Engr. Babagana Digima with staff of NODITS
"]https://technext24.com/wp-content/uploads/2024/11/image-2.png[/IMG]
Engr. Babagana Digima with staff of NODITS
Another visible initiative from NODITS has been the Nigerian Telecommunications Indigenous Content EXPO (NTICE), an annual platform for local industry stakeholders to supposedly showcase Nigerian-made telecom solutions.
The event also claims to facilitate networking and partnerships between local manufacturers and international technology firms, aiming to integrate Nigerian talent and technology into broader global value chains.
While the local SIM card production is noteworthy, they represent only a fraction of NODITS’ original mandate. Despite the policy’s ambitious aims, critical areas like smartphone and fibre optic cable production have seen minimal progress.
In fact, Nigerian telecom companies still import fibre optic cables. While there are some local manufacturers of fibre optic cables in Nigeria, the demand for these cables, especially for large-scale network deployments, often exceeds domestic production capacity.
This reliance on imports may be due to several factors:
For emphasis, Fibre optic cable production has also been largely unaddressed. Although Minister Bosun Tijani has prioritised expanding Nigeria’s fibre network with a proposed 90,000 km of additional fibre optic cable, valued at approximately $2 billion in funding from sources like the World Bank and African Development Bank, there is no indication that these cables will be manufactured domestically.
However, Tijani announced it is set to launch a Special Purpose Vehicle (SPV) that will drive the delivery of the additional 90,000km of broadband fibre optic cable across the country.
For now, Nigeria’s reliance on imported infrastructure fails to leverage the opportunity to stimulate local manufacturing in alignment with the NODITS mandate. But, how can this happen with daily lamentations from manufacturers?
Nigeria’s current state presents a mixed picture for manufacturers. While Nigeria offers significant potential due to its large population and growing economy, several challenges hinder a favourable manufacturing environment.
Now, Nigeria remains highly dependent on imported smartphones, with little to no movement toward local manufacturing, even as demand rises with increased digital penetration.
For context, in a 2022 report, Nigeria imported smartphones worth $2.35 billion, spread across three years. As mentioned earlier, demand has increased.
This gap in manufacturing not only misses an economic opportunity but also limits control over data security and the cost-effectiveness of telecom infrastructure in Nigeria.
Several factors, besides plan continuity and political interests, may have limited NODITS’ effectiveness in driving local production.
First, funding constraints remain a significant barrier. While projects like fibre expansion are financed through large-scale international funding, there has been limited investment specifically targeting local manufacturing capabilities for telecom components. This may have restricted NODITS’ capacity to incentivise local production of high-tech equipment, like smartphones and fibre cables, where initial capital outlays are high.
The regulatory environment also presents challenges.
Many Nigerian states, except seven, impose high fees for Right of Way (RoW), which raises the cost of laying fibre and other infrastructure, making it less attractive for local companies to enter these spaces competitively. Although the NCC has worked to negotiate these fees, inconsistency across state policies has created barriers that discourage investment in telecom manufacturing.
A shift in leadership also contributes to the sense of stalled progress. With the change in ministerial leadership from Isa Pantami to Bosun Tijani in 2023, there has been a notable reorientation toward fibre expansion and digital skill-building rather than deepening telecom manufacturing.
While these goals align with Nigeria’s broader digital economy strategy, they somewhat diverge from NODITS’ core mission of localising telecom component production, leaving questions about the office’s long-term viability.
The stakes for enhancing local telecom production are high. If Nigeria could successfully stimulate local manufacturing for its telecom sector, it could save hundreds of millions of dollars annually in import costs, stimulate job creation, and improve data privacy and control.
The domestic production of fibre cables, for instance, would not only lower infrastructure costs but also support Nigeria’s goal to achieve 70% broadband penetration by 2025. The economic multiplier effect could be substantial, potentially contributing up to 1.5% in GDP growth annually.
Beyond economic gains, there is a substantial opportunity for capacity-building in technology and engineering.
The domestic production of telecom equipment would provide a foundation for technical skills development, which aligns with Nigeria’s push for a tech-literate workforce under initiatives like the Three Million Technical Talent (3MTT) programme. Developing this local industry could create a sustainable pipeline of tech talent able to support innovation within the country.
But, for NODITS to fulfil its transformative potential, there must be a concerted effort from policymakers and industry leaders to overcome funding and regulatory obstacles, expand its mandate, and drive meaningful progress in telecom manufacturing.
But, Nigeria is known to speak too loudly on “what will be done” and forgets that a commitment was announced.
The choice now lies with the current administration.
The post After 100% SIM card local production, Nigeria’s NODITS seems to have gone to bed first appeared on Technext.
Tasked with implementing the National Policy for the Promotion of Indigenous Content in the telecommunications sector, NODITS holds the responsibility of building local capacity for the production of critical telecom components such as SIM cards, smartphones, masts, fibre optic cables and telecom equipment.
The broader goal: reduce dependence on imports, develop Nigeria’s technological workforce, and stimulate the economy by fostering domestic innovation.
However, over three years since its inception, NODITS can only boast of producing SIM cards.
NODITS Achievements to date
One of the primary successes associated with NODITS is the domestic production of SIM cards, which was bolstered by an August 2022 government ban on imported whole-body SIM cards.
This policy shift spurred local manufacturing and resulted in a SIM card market supposedly valued at ₦55 billion, creating direct and indirect employment opportunities and reducing reliance on imports.
[IMG alt="Engr. Babagana Digima with staff of NODITS
"]https://technext24.com/wp-content/uploads/2024/11/image-1.png[/IMG]
Engr. Babagana Digima with staff of NODITS
The Nigerian Communications Commission (NCC) reported that the policy alleviated the burden on foreign exchange and encouraged local businesses to enter the telecom hardware supply chain.
“Before NODITS’ intervention, nearly all SIM cards in Nigeria were imported. We set an ambitious goal to reverse this trend, and now 100% of SIM cards used in Nigeria are manufactured locally,” Babagana Digima, Head of New Media and Information Security at the NCC, said.
Digima, who previously headed NODITS, highlighted the commission’s ongoing initiatives to support local manufacturing in the telecommunications industry. He noted that NODIT has provided grants and incentives to various companies, including sponsoring the production of corrugated ordinal ducts and encouraging local manufacturing of telecom towers and fibre cables.
“We are currently sponsoring the manufacturing of corrugated ordinal Duct, and the company that will be established will be the first in Africa to manufacture such kind of product.
“We also encourage tower manufacture, and fibre manufacture, and have been in touch with Coleman Cables, which is currently manufacturing fibre cables. They have overtaken the only company in Egypt in manufacturing capacity and they are expanding. I am sure a lot of companies are very happy with what we have done, ” he added.
[IMG alt="Engr. Babagana Digima with staff of NODITS
"]https://technext24.com/wp-content/uploads/2024/11/image-2.png[/IMG]
Engr. Babagana Digima with staff of NODITS
Another visible initiative from NODITS has been the Nigerian Telecommunications Indigenous Content EXPO (NTICE), an annual platform for local industry stakeholders to supposedly showcase Nigerian-made telecom solutions.
The event also claims to facilitate networking and partnerships between local manufacturers and international technology firms, aiming to integrate Nigerian talent and technology into broader global value chains.
Areas of lagging progress
While the local SIM card production is noteworthy, they represent only a fraction of NODITS’ original mandate. Despite the policy’s ambitious aims, critical areas like smartphone and fibre optic cable production have seen minimal progress.
In fact, Nigerian telecom companies still import fibre optic cables. While there are some local manufacturers of fibre optic cables in Nigeria, the demand for these cables, especially for large-scale network deployments, often exceeds domestic production capacity.
This reliance on imports may be due to several factors:
- Fibre optic cable manufacturing is a technologically advanced process that requires specialised equipment and skilled labour.
- Nigeria’s growing telecom sector, driven by increasing internet usage and mobile data consumption, necessitates a constant supply of fibre optic cables.
- The ongoing expansion of telecom infrastructure across the country requires significant amounts of fibre optic cables.
For emphasis, Fibre optic cable production has also been largely unaddressed. Although Minister Bosun Tijani has prioritised expanding Nigeria’s fibre network with a proposed 90,000 km of additional fibre optic cable, valued at approximately $2 billion in funding from sources like the World Bank and African Development Bank, there is no indication that these cables will be manufactured domestically.
However, Tijani announced it is set to launch a Special Purpose Vehicle (SPV) that will drive the delivery of the additional 90,000km of broadband fibre optic cable across the country.
For now, Nigeria’s reliance on imported infrastructure fails to leverage the opportunity to stimulate local manufacturing in alignment with the NODITS mandate. But, how can this happen with daily lamentations from manufacturers?
Nigeria’s current state presents a mixed picture for manufacturers. While Nigeria offers significant potential due to its large population and growing economy, several challenges hinder a favourable manufacturing environment.
Now, Nigeria remains highly dependent on imported smartphones, with little to no movement toward local manufacturing, even as demand rises with increased digital penetration.
For context, in a 2022 report, Nigeria imported smartphones worth $2.35 billion, spread across three years. As mentioned earlier, demand has increased.
This gap in manufacturing not only misses an economic opportunity but also limits control over data security and the cost-effectiveness of telecom infrastructure in Nigeria.
Factors that could be constraining NODITS’ progress
Several factors, besides plan continuity and political interests, may have limited NODITS’ effectiveness in driving local production.
First, funding constraints remain a significant barrier. While projects like fibre expansion are financed through large-scale international funding, there has been limited investment specifically targeting local manufacturing capabilities for telecom components. This may have restricted NODITS’ capacity to incentivise local production of high-tech equipment, like smartphones and fibre cables, where initial capital outlays are high.
The regulatory environment also presents challenges.
Many Nigerian states, except seven, impose high fees for Right of Way (RoW), which raises the cost of laying fibre and other infrastructure, making it less attractive for local companies to enter these spaces competitively. Although the NCC has worked to negotiate these fees, inconsistency across state policies has created barriers that discourage investment in telecom manufacturing.
A shift in leadership also contributes to the sense of stalled progress. With the change in ministerial leadership from Isa Pantami to Bosun Tijani in 2023, there has been a notable reorientation toward fibre expansion and digital skill-building rather than deepening telecom manufacturing.
While these goals align with Nigeria’s broader digital economy strategy, they somewhat diverge from NODITS’ core mission of localising telecom component production, leaving questions about the office’s long-term viability.
Missed opportunities and what could be achieved
The stakes for enhancing local telecom production are high. If Nigeria could successfully stimulate local manufacturing for its telecom sector, it could save hundreds of millions of dollars annually in import costs, stimulate job creation, and improve data privacy and control.
The domestic production of fibre cables, for instance, would not only lower infrastructure costs but also support Nigeria’s goal to achieve 70% broadband penetration by 2025. The economic multiplier effect could be substantial, potentially contributing up to 1.5% in GDP growth annually.
Beyond economic gains, there is a substantial opportunity for capacity-building in technology and engineering.
The domestic production of telecom equipment would provide a foundation for technical skills development, which aligns with Nigeria’s push for a tech-literate workforce under initiatives like the Three Million Technical Talent (3MTT) programme. Developing this local industry could create a sustainable pipeline of tech talent able to support innovation within the country.
But, for NODITS to fulfil its transformative potential, there must be a concerted effort from policymakers and industry leaders to overcome funding and regulatory obstacles, expand its mandate, and drive meaningful progress in telecom manufacturing.
But, Nigeria is known to speak too loudly on “what will be done” and forgets that a commitment was announced.
The choice now lies with the current administration.
The post After 100% SIM card local production, Nigeria’s NODITS seems to have gone to bed first appeared on Technext.