Nigeria’s ICT Policy – Rudderless, Corrupt Ridden And Pregnant With Inconsistencies!ByAbubakar Atiku Nuhu-KokoFriday, 26 October 2007aanuhukoko@yahoo.com
I start by asking the following rhetorical questions that need no immediate answers from those whom it may concern: Who’s in charge of the Nigerian National Information Technology Policy (NITP)? – Is it the Federal Ministry of Science and Technology or the Federal Ministry of Information and Communications and or the Presidency? Or organized “Rent-Seekers”? My next level of questions targets policy implementation: Which agency and or agencies - Who’s in charge of the implementation of the NITP? – Is it the Nigerian Information Technology Development Agency (NITDA: www.nitda.gov.ng) or Nigcomsat Ltd (http://www.nigcomsat.org) and or Galaxy Backbone Plc (GalaxyBB Plc: www.galaxybackbone.com). Or organized cabals in the private sector?
These basic and simplistic questions are pertinent to an understanding of Nigeria’s Information and Communications Technologies policy and its implementation strategies. A good example of the chaos in the sector is having two line ministries and the Presidency directly in charge and followed by about four public agencies and companies involved in implementation respectively. The resultant overlap and more often working at cross-purposes in terms of policymaking, regulatory oversight and implementation responsibilities opens rooms for confusion, corruption and inconsistencies in the sector. I strongly suggests that the Nigerian Postal Service Plc (NIPOST Plc) be designated the apex public ICT policy implementation agency. The reasons for the suggestion are discussed below. These issues are the focus of analysis of this write-up.
Charged with the overseeing and regulating the implementation of Nigeria’s supposedly private sector-driven National Information and Communications Technologies (NITP) policy since April 2001, the NITDA and its parent Ministry of Science and Technology have been involved in too many avoidable and unnecessary controversial and crisis ridden decisions, actions and activities in the ICT sector in recent times. Some of these disturbing actions are the focus of this write-up. For example, within a 24 hour interval, I came across two disturbing news items, which were reported in one of the Nigerian Newspapers (Online edition).These two news items appeared on the paper’s editions of 22 and 23 October 2007 respectively. The 22nd October 2007 edition carried a news item regarding a dispute between the Nigerian Communications Commission (NCC) – Nigeria’s apex telecoms regulator, and a private Information and Communications Technologies (ICT) company that goes by the name Interstellar Communications Limited. The dispute between the Commission and the Company centres on the control and management of the nation’s Internet Exchange Point (IXP) (See: http://allafrica.com/stories/200710220234.html).
While the other news item that appeared in the same Newspaper the following day - 23rd October 2007, centres not on a dispute, but this time around commercial business collaboration or partnership consummated by NITDA (a federal government-owned agency) and a consortium of private companies that goes by the name Chams Consortium. The collaboration is about a memorandum of understanding (MoU) between NITDA and Chams Consortium to install 1000 Automated Teller Machines (ATMs) and 5,000 electronic transaction booths (ATBs) across the country before the end of 2008 (see: http://www.thisdayonline.com/nview.php?id=93077 ).
These two news items differ in terms of the issues at stake but at the same time, they bore some similarity in terms of belonging to the same economic sector – ICT. However, the difference and similarity are not the issues that drew my curiosity to the two news items but the public policy concerns they triggered. These concerns definitely need the urgent attention of the Nigerian public, the Presidency and the National Assembly. What are these public policy concerns and why are they disturbing in the first place? I start first, with the dispute between the NCC and Interstellar Communications Limited. These disturbing public policy concerns have to do with the sloppiness of the NCC in awarding a private company – Interstellar Communications Ltd an “Exclusive Licence” for the establishment and management of Nigeria’s internet Exchange Point (NIXP).
Before I continue with the analysis, there is the need to explain what an internet Exchange Point (IX or IXP) is all about. According to the industry explanation, an IXP is “a physical infrastructure that allows different internet Service Provider (ISPs) to exchange internet traffic between their networks (autonomous systems) by means of mutual peering agreements, which allow traffic to be exchanged without cost. IXPs reduce the portion of an ISP's traffic which must be delivered via their upstream transit providers, thereby reducing the Average Per-Bit Delivery Cost of their service. Furthermore, the increased number of paths learned through the IXP improves routing efficiency and fault-tolerance.”
Furthermore, “The primary purpose of an IXP is to allow networks to interconnect directly, via the exchange, rather than through one or more 3rd party networks. The advantages of the direct interconnection are numerous, but the primary reasons are cost, latency, and bandwidth. Traffic passing through an exchange is typically not billed by any party, whereas traffic to an ISP's upstream provider is. The direct interconnection, often located in the same city as both networks, avoids the need for data to travel to other cities (potentially on other continent) to get from one network to another, thus reducing latency. The third advantage, speed, is most noticeable in areas that have poorly developed long-distance connections. ISPs in these regions might have to pay between 10 or 100 times more for data transport than ISPs in North America, Europe or Japan. Therefore, these ISPs typically have slower, more limited connections to the rest of the internet. However, a connection to a local IXP may allow them to transfer data without limit, and without cost, vastly improving the bandwidth between customers of the two adjacent ISPs.”
In a nut shell then, what this means for internet users in Nigeria is that the Nigerian internet exchange point will allow all e-mail traffics generated in Nigeria meant for email addresses localised in Nigeria to remain routed in Nigeria instead of going through the international gateway before been bounced back to Nigeria for delivery. The problem is that since Nigeria joined the global information superhighway sometime between 1996 and1998 or thereabout, the country did not have an IXP. In 2003 an attempt at establishing an IXP in Nigeria was made by the very few pioneer ISPs operating in the country. This gave birth to the now defunct Ibadan Internet Exchange (IBIX) - Nigeria’s first Internet Exchange Point (IXP), established by two founding ISPs Steineng Ltd. and SKANNET, both located in Ibadan. It was commissioned in late March 2003. Unfortunately, the exchange lasted for just about six months!
It took a presidential intervention by president Obasanjo on 25 November 2006, who was in Tunis for the second phase of the United Nations (UN) sponsored and organized World Summit on the Information Society (WSIS), from where he gave a presidential directive to the Nigerian Communications Commission (NCC) to ensure that the nation gets its own Internet Exchange Point (IXP) as soon as possible (after participating and Chairing a session on Internet Exchange Point and Infrastructural Development).
Now back to the dispute over the NIXP between NCC and Interstellar Communications Ltd. According to the Newspaper report of October 22, 2007, “Interstellar is claiming N10 billion in a landmark suit filed against NCC and other government agencies including the Ministry of Science and Technology, the Nigeria Information Technology Development Agency (NITDA) and Galaxy Backbone Plc over alleged breach of service exclusivity granted the company…According to the Interstellar chairman, NCC has admitted that the initial licence granting exclusive IXP right to Interstellar was issued in error." Therefore, as a result of the ensuing legal tango, the Office of the National Security Advisor (NSA) stepped in and broker an out of court arrangement whereby according to Interstellar Chairman, Chief Obi Thomson, “it was agreed that a compensation package totalling $8 million, representing 50 per cent of the $16 million the company said it has sunk into the rollout of its network was to be refunded to Interstellar while a public-private partnership (PPP) model was to be adopted.”
The public policy issues of disturbing concern with this development are:
a) Granting of “Exclusive Licence” to a private company by the authorities of the NCC: The first question here is whether it is within the statutes of the NCC to award “Exclusive Licences”? – giving that the Nigerian economy is supposed to be operating in a liberalized; (de) regulated and open competitive regime. Secondly, whether the “Exclusive Licence” issued to Interstellar was awarded through a well publicized open competitive bidding and in compliance with all the laid down due process rules and procedures? Thirdly, what is the position of the Bureau for Public Enterprise’s (BPE’s) Act and or other existing Nigerian Commercial/Business/Trade laws regarding “Exclusive Licensing”; such as the Anti-Competition Laws that regulate and ensure fair conduct of commercial business activities in Nigeria? Fourthly, how much did Interstellar paid the NCC for the alleged “Exclusive Licence” issued to it in “error”? Fifthly, was the “Exclusive Licence” awarded before the presidential directive to the NCC to establish the Nigerian IXP? Having raised these pertinent questions I would move to the next issue of concern.
b) Within the context of the Nigerian Telecoms and Information and Communications Technologies (ICT) policies, in which domain (public, private and or public-private partnership – PPP) should the Nigerian IXP resides? In other words, who is responsible for establishing and managing the Nigerian IXP?
c) Within the context of the Nigeria’s Regulatory Regimes and Statutory Acts and Provisions; as provided for either by the 1999 Nigerian Constitution and or through the Acts enacted by the National Assembly from time to time, does establishment of an internet IXP requires licensing from any of Nigeria’s regulatory authorities?
d) Are the present operators and managers of the Nigerian IXP also licensed by the NCC? Is the Licence also “Exclusive”?
e) Was the award of the purported “Exclusive Licence” to Interstellar by the NCC actually done in “error” as is being claimed?
f) Who is to be blamed, held responsible and liable for the purported “error” in the award of the “Exclusive Licence”?
g) What is the role and implication of the Presidential directive issued to the authorities of the NCC in Tunis by the then Nigerian President Chief Olusegun Obasanjo on November 25, 2003 regarding the establishment of the NIXP?
h) Is the Nigerian public interest being served by the intervention of the Office of the National Security Adviser (NSA), which intervened and broker peace between the feuding parties; during which “it was agreed that a compensation package totalling $8 million, representing 50 per cent of the $16 million the company said it has sunk into the rollout of its network was to be refunded to Interstellar while a public-private partnership (PPP) model was to be adopted”?
i) Is the $16m claimed to have been spent by Interstellar into the rollout of its purported network genuine and verifiable by a refutable independent Accounting/Audit firm?
j) Will there be any room for the relevant oversight Committees of the National Assembly to have a say in this dispute and the outcome of the intervention of the office of the NSA?
The above listed questions and their answers are of great concern to public policymaking process in Nigeria; particularly pertaining to the issues of policy consistency, transparency and accountability. For example, the $8m giveaway to Interstella under the “Out of Court” settlement brokered by the office of the NSA amounts to nothing but “rent-seeking” hoodwinked by interstellar cashing on the sloppiness exhibited by the authorities of the NCC. Therefore, it is time for President Yar Adua to have serious concern about the problems in Nigeria’s telecoms and ICT sectors respectively; with a view to sanitizing the rots in these very important sectors of the national economy.
I now examine the issues at stake regarding the Second Newspaper news item of October 23, 2007. This news item deals with the purported Memorandum of Understanding (MoU) of collaboration signed by the Nigerian Information Technology Development Agency (NITDA) and a consortium of private companies that goes by the name Chams Consortium. As mentioned in the introduction to this piece above, the signed MoU provides for the two parties to jointly install 1000 Automated Teller Machines (ATMs) and 5,000 electronic transaction booths (ATBs) across the country before the end of 2008. The public policy concerns regarding the conceptualization and implementation of this MoU are as follows:
Before delving into the issues of concern, I would make myself clear that I am not against collaboration among and or between government and private entities in doing business. Of course, the concept of public-private sector partnership (PPP) is a good and healthy one if done honestly and properly.
One of the problems of the signed MoU between NITDA and Chams Consortium is that it seems NITDA has stepped out of its statutory mandate as provided by the Act establishing it when it decided to partner with the Chams Consortium to jointly install 1000 Automated Teller Machines (ATMs) and 5,000 electronic transaction booths (ATBs) across the country in its efforts to promote e-payment, broadband internet access and rural telephony nationwide. I need to be corrected if I am wrong here. However, going through what has been made available in the public domain via the website of NITDA, If NITDA prides itself as the ICT regulator as provided in its mandate, then it faces a great challenge in engaging in full-scale commercial transaction involving installation of Bank Automated Teller Machines (ATM) and electronic booths for retail internet services.
As Nigeria’s ICT regulator, it cannot at the same time be involved in wholesale and or retail commercial activities solo or in partnership with private companies. Therefore, since its mandate does not provide for it to engage in commercial retail-end-to-end service provision like a limited liability company or a Plc, it has no business in going into commercial business alone and or in partnership with full-fledged private companies under any cover or innovative arrangement. Moreover, the existing public policy thrusts of the immediate past and present governments place emphasis on privatization of the existing state-owned enterprises (SOEs) and private-sector driven economic (and to a large extent, even social sectors such as education and health) sectors of the national spatial economy. A number of laws have been put in place (the Bureau for Public Enterprises - BPE Act, among others, for example) in pursuant of this neo-liberal World Bank/IMF inspired national economic doctrine and model.
Secondly, it should be recalled that some weeks ago, the NCC and a newly incorporated federal government-owned company – Nigcomsat Ltd (a satellite management company that manages the first and only Nigeria’s communications satellite, Nigcomsat-1) were involved in heated regulatory and bureaucratic exchanges over the issue of licensing the Nigcomsat Ltd to provide “last mile end-to-end” telecommunications services directly to end users – the subscribing public. However, according to the argument put forward by the NCC, Nigcomsat Ltd’s status is that of the telecoms carrier’s carrier, as provided for in its Articles of Association and Memorandum of Understanding (MoU). Hence, it is to serve as a wholesale service provider of satellite communications by selling or offering for sale to other telecommunications service providers such services as; transponders or space segment, to enable such beneficiary service providers carry and transmit their traffic from one point to another. Therefore, because of the existing regulatory provisions, the NCC cannot give operating license in the category of retail services provider to the Nigcomsat Ltd. The controversy that ensued generated a lot of public debates and creating a situation whereby the issue degenerated into open confrontations and heated exchanges on the pages of Newspapers; with the public polarized into two camps – with one camp in support of the NCC and another camp in support of the Nigcomsat Ltd. The controversy was traced to yet another presidential directive and approval alleged to have been issued on May 5, 2007 by the then outgoing president Obasanjo to the authoriteis of Nigcomsat Ltd, authourizing and approving specific spectrum allocation to Nigcomsat Ltd and total frequency license for any telecommunications services Nigcomsat Ltd may wish to offer. For instance, the bosses at Nigcomsat Ltd argued that, “it is germane to state that under the extant regulations, Nigcomsat Ltd as government owned company, is required to apply to the Federal Government through the Ministry of Information and Commuincations or the president for spectrum allocation and not to the NCC.” In addtion, in arguing their case further, the bosses at the Nigcomsat Ltd futher stated that “since the presidential directive and decision were communicated to the NCC, it (NCC) ought to have complied by allocating the said frequency spectrum to it.” President Yar Adua had to intervene in order to settle the controversy by inviting the Bureau for Public Enterprises (BPE) to handle the chaotic and embarrassing situation. However, as this write-up is being put together, a new twist or development has just happened on the matter. It has been reported in the Newspapers that President Yar Adua has just directed the NCC authorities to comply with the earlier presidential directive issued to it by former president Obasanjo on the matter that has been in the eye of the storm of the controversy and crisis between NCC and Nigcomsat Ltd (see for example, The Guardian Newspaper, Online edition at: www.guardiannewsngr.com/news/article08). Paradoxically, this latest development adds to the already seriously muddled, directionless and inconsistency laden and stinky-corrupt ridden Nigeria’s ICT policy and its implementation.
As the fire generated by the NCC – Nigcomsat controversy is being extinguished, another likely controversy is being created again in the troubled sector. For example, just a few weeks ago, another newly formed controversial government-owned ICT company – Galaxy Broadband Plc (GalaxyBB Plc), informed the nation that it is installing 5000 VSAT sites nationwide to provide retail internet end-to-end-services in all the 774 local government councils of the country and integrate all federal government-owned ICT services nationwide. GalaxyBB Plc is the controversial commercial entity incorporated in the dying days of former president Obasanjo’s presidency by the federal ministry of science and technology and NITDA, again! The company was incorporated to provide commercial retail broadband internet and related online services to the public and as well as integrating all the existing (and new) stand-alone federal government’s owned internet and online services nationwide, among other related services. For reason of space, I do not intend to say much again about the controversy surrounding the existence of GalaxyBB Plc. My two recently internet-posted write-ups dealt with this issue extensively.
However, one can see immediately that there is a close link and very close one-to-one mapping between the NITDA-Chams business plan with that announced recently by the Galaxy Broadband Plc (GalaxyBB Plc). Also, there are certainties that there will be a repeat of the type of NCC-Nigcomsat Ltd controversy and crisis in the implementation of the purported NITDA-Chams MoU. This is because there are some yet to be explained grey areas in the arrangement entered that need smoothening. For example, where will the financial and physical assets that NITDA will deploy in pursuant of its side of the signed MoU come from? What role (s) will both the Nigcomsat Ltd and GalaxyBB Plc (both companies incorporated and managed by NITDA and the Federal Ministry of Science and Technology) play under this newest enterprise? What the roles are the BPE and the National Council on Privatization (NCP) going to play in these schemes rolled out despite the existing laws, sectoral public policies and extant provisions under the National Economic Empowerment and Development Strategy (NEEDS) and the newly crafted Vision 202020 national economic management framework and doctrine? Nevertheless, almost the same public policy issues of disturbing concern outlined earlier above, regarding the controversy and crisis between NCC and Interstellar communications Ltd may likely confront the purported MoU signed by the NITDA and the Chams Consortium in the nearest future.
One of the alternative arrangements that works elsewhere that President Yar Adua needs to have a look at is the existing public private partnership (PPP) or commercial business collaboration between the British Royal Mail Service (one of the oldest public domain services provider in the world) and the British Telecom (BT) – one of the biggest privatized public telecoms company. This how it works for the two partners:
The post office, part of the Royal Mail group has about 14, 500 branches across the UK. In addition to the traditional mails collection and delivery services it provides, it also engages in various commercial business retail marketing services such as: stationery, bureau de change service (i.e., foreign money exchange), parcel courier delivery service, Giro banking service and small electronic appliances and telecoms retail services among others. A few days ago (as reported by the Financial Times (FT) of Wednesday, October 24 edition, page 4), The UK Post Office Company (part of the Royal Mails group) announced that it “is entering the fiercely competitive broadband market and promising to poach customers from Carphone Warehouse and Tiscali” – two of the major private internet broadband services companies after the BT and the Virgin Media.
The UK Post Office already has an existing £750m wholesale contract arrangement with the BT entered in May 2007, whereby it bulk-purchased fixed-line telephone line rentals at whole price rates. The UK Post Office then retails the lines to its about 400,000 fixed-line HomePhone subscriber customers – a service launched by the Post Office in 2005. Under the existing fixed-line deal entered by the two companies, the UK Post Office reports that “it generated £91m of telecoms revenue in the year to March 31 – almost 10 per cent of the Post Office’s turnover.” Similarly, the UK Post Office anticipates and hopes “its telecoms services will contribute about 25 per cent of its revenue by 2010-11” - with the move into broadband started on Monday October 22 2007, using BT’s fixed-line network. In addition, the UK Post Office is considering becoming a mobile phone “virtual” operator - “using another wireless company’s cellular network” (see the Financial Times (FT), Wednesday October 24, 2007). The lesson to be learned here is a very successful public private partnership that is transparent and open to public and regulatory scrutinises without undue overbearing and poorly conducted governmental meddle-ness. Both companies are regulated entities and enjoy remarkable public confidence in the services and products they offer to the public.
Therefore, Nigeria may consider adopting this model. For example, the government can merge Nigcomsat Ltd and GalaxyBB Plc with the Nigerian Postal Service Plc (NIPOST) instead of privatizing these two newly incorporated companies. NIPOST is a natural choice because it has all the attributes of the UK Post Office in terms of having assets and presence all over the country. NIPOST also has been providing internet connectivity to the public; it even has internet kiosks in some selected locations nationwide via fixed-land lines leased from NITEL Ltd.
In conclusion therefore, President Yar Adua needs to take urgent attention and action to stop these rather deliberately organized rent-seeking arrangements in the ICT sector before another monumental waste of public resources is committed. For example, the $16m giveaway to a private company as an “Out of Court” settlement will only open flood gates of similar wisely concocted “rent-seeking” arrangements by other “rent-seeking opportunist” Nigerians with intent to cash-in upon Nigeria’s nascent but incompetent, corrupt ridden and lackadaisical easily manipulated regulatory institutions and agencies.
What the Nigerian businesses look up to the government for are encouragements through open, transparent and consistent public policies; level playing enabling environment for competitive enterprise promotion and development. Despite the great leap forward recorded in the telecoms and ICT sectors in the last eight years or so, there are still a lot of obstacles to overcome. Nigeria’s ICT policy is rudderless and pregnant with deceits and inconsistencies, despite the recent chest beating by the Hon. Minister of Information and Communications (see for example: http://allafrica.com/stories/200710250098.html). Therefore, it is crucial for Nigeria that reducing these enormous obstacles, including policy inconsistency, remains a top priority and to efficiently do that, President Yar Adua needs to consider appointing competent Presidential Advisors, Senior Special Assistants (SSAs) and Special Assistants (SAs) on Telecoms and ICT to help him and the country out. While President Yar Adua has his eagle eyes focused on the nation’s troubled energy and power sectors respectively, he needs to equally pay attention to the telecoms and ICT sectors in order to stop them from sliding back to the dark yesteryears!
P.S
Just as I concluded this piece, I stumbled over the following Newspaper headline: “NIXP Denounces Interstella’s N10bn Suit against NCC,” reported by Efem Nkanga, Thisday Newspaper 10.26.2007(Online edition) found at: http://www.thisdayonline.com/nview.php?id=93381. Pleased read on!
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