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The Economy of Local Content Development in Nigeria: Challenges and Prospects Presentation at the 2013 eNigeria Conference Tope S. Aladenusi Partner &

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Presentation on theme: "The Economy of Local Content Development in Nigeria: Challenges and Prospects Presentation at the 2013 eNigeria Conference Tope S. Aladenusi Partner &"— Presentation transcript:

1 The Economy of Local Content Development in Nigeria: Challenges and Prospects Presentation at the 2013 eNigeria Conference Tope S. Aladenusi Partner & Head, Information & Technology Risk, Deloitte Nigeria 5 December 2013

2 Objective At the end of this presentation you will: Understand the reality and the present challenges plaguing local content development in Nigeria Appreciate how local software and hardware development have helped improve the economy of other nations in the world Understand what we can do to overcome the current challenges facing local content development Discuss the prospects we have despite the current challenges 2

3 1Definitions Outline 2Where are we?3Where should we be?4Key Challenges of Local Content Development5Overcoming the Challenges6Local Content Development - Prospects 3 7Concluding thoughts

4 Local Content – An expression and communication of a community’s locally generated, owned and adapted knowledge and experience that is relevant to the community’s situation. 1 Local Development – The mobilisation of under-utilised resources in targeted localities by local action, often in partnership with regional and central government departments and agencies, business, trade unions and local community groups, which can enhance the value of people and place. 2 Local Economic Development – offers government, the private and not-for-profit sectors, and citizens the opportunity to work together to improve the local economy. 3 Definitions Source: 1.UNESCO and the World Summit on the Information Society 2.Northern Ireland Economic Council 3.World Bank 4

5 Where are we…. How many of us will be willing to use made in Nigeria phones and drop our current Samsung Galaxy phones, iphones blackberry phones and all other sophisticated phones we carry about? How many Banks in Nigeria use made in Nigeria software as their core banking operations? With the introduction of cashless society, how many made in Nigeria POS do we have? How many of the Oil & Gas or Telecom companies use made in Nigeria software as their main business application? How many of the video games which our children play with at home are designed locally? How many times does the government signs big ticket ICT contracts with local firms?

6 According to an online report by Tribune Newspaper on 1 March 2013, about $1 billion is being lost annually to foreign software purchase by government and private businesses in the country. The country’s annual Information Communications Technology (ICT) import equates 50 per cent of 2013 national budget of N2.4 trillion, an indication that the country is in dire need of local content on ICT to stem the tide of capital flight. Source:;; Where are we in comparison with others? As per the Economic Survey 2011-2012, Software accounts for 41.7% of the total services exports from India. In 2011-12, Indian IT products earned an export revenue of around $1.5 billion, which rose to $1.6 billion in 2012-13 Approximately, Six (6) computer and/or video games were sold on average every second of every day of 2012. $5.9 billion was revenue generated by purchases of digital games, mobile apps, subscriptions and social network gaming in 2012 The average salary for an entertainment software industry employee is $90,000

7 Where should we be? Global Application Global Expression Local Expression Local Application Global content for global application Local content for local application Global content for local application - Influx of foreign products Local content for global application We should be here We are here Source: Adapted from “Collecting and Propagating Local Development Content” by Peter Ballantyne 7

8 8 Regulatory System Nigeria did not have a ministry dedicated to ICT until July, 2011. Focus on rolling out new regulations over ensuring adherence to existing regulations. Over reliance on foreign ICT products and vendors. Poor access to low interest financing or development financing scheme. The CBN Development Finance scheme mainly targets the agricultural sector, whereas annual import of ICT equates half of our 2013 national budget figure. High cost of production due to lack of enabling infrastructure. Key Challenges of Local Content Development

9 9 School System The IT related curriculum of some schools are not in alignment with modern realities. Some lecturers are still teaching COBOL, BASIC, PASCAL, etc. The emphasis on the school preparing students for a great job over preparing them to solve problems or be great entrepreneurs. ICT related courses are not yet fully integrated in all tiers of education. IT security is not integrated in many ICT courses so we are building functional applications that are not secure. There is poor government support on school infrastructure. Key Challenges of Local Content Development

10 10 Societal System The “get it quick” syndrome may not be conducive for excellence in ICT. For instance, work started for Microsoft XP in 1995 but it was released in 2002. Today, many ICT professionals rush to market with bad products or focus on sales over development. Slave mentality that anything made overseas must be better than the ones made in Nigeria. No role models in many sectors of ICT. Some of our current role models have the key knowledge that drives the business ONLY in their heads. Many philanthropists would rather give fish than teach people how to fish. What is wrong with building R&D centers or “software villages”? Many IT practitioners are competing on saturated areas and neglecting white spaces e.g. computer games, entertainment solutions, traders solutions etc. We should start thinking of “hardware / software inclusion” to reach the “unreached” of our society. Key Challenges of Local Content Development

11 11 Security System Many made in Nigeria software are not built using secure coding practices or international standards like COBIT 5. According to Deloitte’s Security Survey on eBusiness Platforms in Nigeria, November 2013, results show that of the total platforms sampled, online shops / retail markets had the highest number of security flaws, followed by financial institutions. 28% of the e- Business platforms reviewed transmitted user credentials in clear text. Intellectual property rights are usually not protected due to poor enforcement of the Copyright Act. Nigerians are unable to buy Apps in some stores abroad (e.g. US, UK) using a debit / credit card issued by a Nigerian bank let alone selling our Apps in such stores. Colonialism System Many of our IT professionals are still under colonisation – in their minds. They are working hard to “catch up” with Microsoft, Facebook, Twitter, Samsung, etc. If we always think of catching up, we will never be ahead, and consumers are transacting with those ahead. Create the future! Key Challenges of Local Content Development

12 Shared Vision Committed Leadership Addressing root causes of challenges Sense of Urgency In order to effectively overcome the challenges of local development, four key components must be in place. Overcoming the Challenges 12

13 13 “I see a big jump” Evolving ICT Landscape: eGoverment, Mobile, Social Media, Broadband, Data growth, Cloud Computing, Outsourcing, etc. Large Consumer Base: the demand for ICT products is increasing in all sectors. For example, in telecom industry, we moved from about 400,000 to over 90 million subscribers in 10 years. Availability of local talent: Nigerians are still one of the smartest people on earth. We have a large pool of resources to develop affordtable products that address the peculairities of our enviroment and the world at large. Acceleration of the growth of the economy: If half of the 2013 budget represents total annual ICT spend on importation, then imagine what will happen to our economy if 50% of that amount is internally generated from ICT. Local Content Development - Prospects

14 14 “I see a big jump” An ICT Ministry that is working means better frameworks, policies and the enforcement of these policies: This conference is a sign that we are begining to adopt the right “thinking”. The ICT Ministry, though young, should work hard to develop and enforce more enabling policies and frameworks e.g. Local Content Development - Prospects IndiaSoftware Policy of 1986 National electronics policy (NEP) in 2012 Framework for Mobile Governance USThe Digital Government Strategy

15 Concluding thoughts 15 “The local ICT industry is one where we see tremendous potential for local content development despite the challenges. We have the best brains, good people and an economy that is gradually improving. With the advantages we face over foreign software and with an enabling environment, policies and government backing, it is only a matter of time before the ICT industry becomes one of the biggest employer of labor, and one of the largest contributors to the GDP of our great country Nigeria.”

16 Thank You The views and opinions expressed in this presentation are those of the author and do not in any way represent the views of the author’s employer. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication. The author does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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