Computers, Software & Peripherals in Nigeria

A Hot Tip about Computer Programming in Nigeria

Last updated: 13 Mar 2011

Overview

The success of Nigeria’s telecommunications industry subsector is fueling demand for computers, software, peripherals and professional services such as electronic banking, Internet services, e-learning, e-government, e-health and digital security services.

 

The ICT sector should receive a boost from May 2010 when two broadband cables from Glo and MainOne are expected to be deplored. Current bandwidth in Nigeria is through the SAT-3 cable of 350 gigabits. The Glo and MainOne cables will increase the broadband capacity by 2.6 terabits for a total of almost 3.0 terabits for the entire country.

 

Glo-One is an initiative of Globacom Limited. MainOne will offer a 1.92 terabit facility that will provide the largest bandwidth in the region. Glo-One is expected to be commissioned in early 2010, while Main One is scheduled for commissioning in June 2010. Both projects will provide broadband data and internet capacity, which will increase the country's Internet density and capacity. They will likewise break NITEL’s fiber-optic-cable quasi-monopoly and should reduce the cost of broadband significantly. In July 2009, damage to the SAT-3 cable, Nigeria's only link to the global communications system, affected 70 percent of the country’s bandwidth and crippled bank services and Internet access nationwide.

 

Nigeria is home to one of the world’s largest digital card production centers, a plant owned by Chams Plc. The center is powered by U.S. technology and technical support provided by Data Card Corporation, CPI Card Manufacturing and ACI. The Card Center which produces over 1.75 million cards per day caters to the financial services industry especially banks, telecommunications service providers for their recharge cards, Nigeria’s National ID Card scheme and other niche markets including basic identity cards for companies.

 

Across the country, mega digital centers or cyber cafes and IT parks are springing up. In Lagos, Abuja, Benin and Port Harcourt, CHAMS Plc has completed or is about to complete mega digital centers known as “Chams City” with about 1000 Apple brand of computer systems in each center. In leading universities such as University of Nigeria Nsukka, AfriHub International in association with Zinox Technologies and AfriHub Inc USA, are building and launching on the go, IT parks and digital libraries with links to resources in some leading universities in United States. More than 18 centers have been completed and commissioned. Some firms such as Omatek Plc, Zinox Technologies, Beta Computers and Brian Technologies are at the forefront of local assembly of computers. Omatek has an assembly plants in Ghana and considering other West African markets.

 

The Government of Nigeria (GON) is investing about $95 million on rural access and community connectivity. This project comes under the aegis of National Information, Communication and Education Program (NICEP). It is expected to promote engaged governance, transparency, due process and the rule of law. Improvement in productivity and quality of service will help ensure that Nigeria stays on track toward the Millennium Development Goal (MDG). It is estimated that over 20 million Nigerians will have a low-cost access to the internet when the NICEP project is completed. NICEP is public –private partnership between Government of Nigeria (GON) and a number of private companies led by Galaxy Backbone and Nigerian Postal Service (NIPOST).

 

Nigeria sees the United States as a role model on technology matters and development. However, an increasing number of Asian firms, especially those of Indian and Chinese origin are gaining market share. The result of a recent market survey suggests that imports from the United States currently account for less than 40 percent of the total imports of hardware and software in Nigeria. Five or more years ago, US exports accounted for over 60 percent of Nigeria’s import of computer hardware, peripherals, and software.

 

Industry leaders and market analysts say U.S. firms need to retool their market development strategies. They need to pay more attention to strategic partnership, participation in local trade events, after-sales service and advertisement. They must follow their products to the market in order to check the onslaught of Asian competition in Nigeria and all of West Africa.

 

In 2008, the Director General of the National Information Technology Development Agency (NITDA), Professor Cleopas Angaye, said that there are a number of initiatives to facilitate information technology diffusion in Nigeria over the next 2-5 years. The three most prominent initiatives are: 1) Technology Park by Federal Ministry of Science and Technology to spur research and development at state levels; 2) IT Park by NITDA to encourage software development especially targeting schools, young school leavers and university/college graduates; 3) Abuja Technology Village meant to attract multinationals and local industry leaders to localize at the capital city of Abuja.

 

The NITDA IT Park is a proposal to partner with state governments to develop and build IT Parks for software and human capital development. According to Professor Angaye, implementation of the proposal may require technical partnership with and inputs from foreign experts and there are no restrictions on which country may participate. Another initiative of the agency is Rural Internet Access launched in 2007 to promote e-governance and universal access. Under this program, 20 internet centers were built and enabled by VSAT technology in different rural areas in Northern and Southern Nigeria in 2007. About 40 Internet centers were proposed in the 2008 budget. Much of the NITDA projects are yet to be implemented

 

In May 2007, Afrihub Nigeria, representing Afrihub Inc, received an approval from Federal Ministry of Education to build and manage Technology Parks in all the Federal Universities in Nigeria. Annually, Nigeria produces about 150,000 graduates but less than 30 percent of the graduates have basic information and communications technology skills.

 

Over the past two years, Nigeria has made significant progress in creating awareness about the importance of information technology in education and human capital development, particularly as the world increasingly globalizes. Consequently, the country is receiving increasing technical and financial support from multilateral agencies such as the World Bank, and is signing various public-private partnership (PPP) agreements with international firms for training, small business development and many other areas.

 

The Government of Nigeria (GON) in conjunction with Nigerian software practitioners developed the Nigerian Software Development Initiative (NSDI). NSDI website states, “The Nigeria Software Development Initiative (NSDI) is a presidential initiative on the development of the Nigerian software industry which is born out of the realization that the nation has abundant intellectual capital whose genius and creativity in software development could help jump-start Nigeria’s participation in the booming global software industry”.

 

The Nigerian financial services sector is experiencing major changes on several fronts, especially computerization of critical functions, processes, and decision centers such as customer interfaces. The United States is the leader in front-end posts and infrastructure, data bases, servers, work stations, and networking. Nigerian commercial centers are awash with ATMs as banks compete for customer attention and patronage. All the banks advertise that their mobile banking capabilities and service delivery options are available 24/7. Nigeria needs to upgrade old ICT infrastructure and install new systems, including power supply and software to facilitate service delivery and business-process integration. Frequent power outage and erratic supply of electricity constitute probably the single most important transaction cost and barrier to doing business in Nigeria.

 

Best Prospects/Services

Over the past six months, the Nigerian computer hardware and software subsectors have witnessed a reduction in product demand following a decline in purchasing power of major corporate buyers and end-users. This is a consequence of the on-going global recession and of the banking sector reform in Nigeria which has constrained access to credit for many Nigerian companies.

 

Computer peripherals and power-support systems remain the best prospects for this market. Handheld devices such as PDAs and other wireless portables are in great demand in Nigeria due to expansion of the cellular telecommunications infrastructure and services across the country. Micro and mini-computers and state-of-the-art printers represent some of the best sales opportunities and will account for the bulk of imports from the United States in this sector over the short and medium term.

 

More and more local firms prefer to buy locally assembled PCs, which are priced much cheaper than international branded ones. Currently, several Nigerian ICT firms are expanding to neighboring countries such as Ghana, Gambia, and Liberia. This market expansion, industry analysts say, will fuel import growth and local assembly. The falling prices of IT products, the ongoing campaign to bridge the so-called digital divide and the push by regulatory agencies in Nigeria to achieve universal access according to the International Telecommunications Union (ITU), are factors helping to spur auxiliary services such as business centers, value-added services, and marketing of communications equipment, including computer hardware. These auxiliary services are creating opportunities for localization of small enterprises that need information and communications technologies to focus on niche markets and specialties. Even in unusual places, such as rural villages close to cell sites, micro businesses are springing up from the multiplier effects of the cellular phone networks.

 

Software for bank consolidation, integration, security management and business continuity offer great growth opportunities in Nigeria. Opportunity abound for certificate courses targeting young school leavers, especially graduates interested in professional advancement, mid-level managers eager to grow and prosper in their careers, teachers and lecturers, who are responsible for computer education and knowledge management at various levels. Two franchise firms, NIIT and Aptech, both originating from India, currently dominate this sub-sector. They have training centers in all the six geo-political zones of Nigeria.

 

Currently, China is the strongest and most aggressive threat to U.S. market share in this industry sector. Chinese firms offer a combination of incentives including 90-day credit sales, sponsored training programs, participation in local trade shows, frequent visits to Nigeria to monitor market trends and partnership/joint ventures for market development.

 

U.S. suppliers will continue to face aggressive competition from European and Asian companies that now export computer parts and peripherals for local assembly of PCs in Nigeria, but U.S.- origin equipment is generally considered superior. End- users, however, prefer suppliers who, in addition to prompt delivery of products, are able to provide timely after- sales support, including spare parts at competitive prices. Experts predict that this trend will likely continue for the foreseeable future.

 

 

 

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Posted: 10 May 2010, last updated 13 March 2011