The Nigcomsat Drama

06 Dec 2012

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Obiageli Ezekwesili

Olufemi Adeagbo

Many had simply not prepared for a keynote address laced with humour, robust facts, commanding articulation and a very clear vision.  But that was exactly what Obiageli Ezekwesili delivered a couple of weeks ago at the NITDA organized local content in ICT event. The clear trajectory of the speech, in my reading, was a clear challenge to the industry practitioners to ensure that the innovation driven ICT sector should be leveraged for socio - economic development and not allowed to tow the path of sectors that have become essentially ‘rent’ oriented in nature. The theme was potential, skills development imperative, global competitiveness, sustainability and of course as is expected with Mrs. due process – integrity.

The  focus on empowerment and job creation - which requires rapid upskilling, international commercial linkages and other inputs like manufacturing /  assembly shared infrastructure  parks, makes it imperative to focus the industry on specific and measurable objectives that support innovation, deliver jobs and yield true macro development. There can be no time for the misapplication of scarce resources or dissipation of energy and resources on controversial issues that can only distract and deflect from the requirements of the sector. 

In March this year, an advocacy group, Leadership and Role Model Foundation, LRMF, alerted the nation about the almost covert passage of a proposed Nigcomsat  Bill. They were particularly concerned about the pace of progress the bill made, without at least, being subjected to stakeholders' input through a public hearing. "By enacting a law conferring on any company the authority to carry out telecommunications business, or to control a segment of the communications industry, the National Assembly has by default usurped the powers and functions of the nation's telecommunications regulator as prescribed by the laws emanating from the same hallowed chambers", LRMF said.
According to media reports, some of the functions of the corporation as contained in the draft bill forwarded to the National Assembly include empowering NigComSat to engage in, purchase or otherwise acquire or take over all or any of the assets, business, company, firm or person in furtherance of any business relating to the satellite communications industry and to enforce all regulatory measures relating to the general control of the satellite communications sector.
One branch of thought says that the intention of the Bill is to equip NigComSat with quasi - regulatory powers. Some provisions are reportedly indicate that the company - under the proposed framework  - will regulate all activities in the satellite industry and would acquire government's assets with satellite content. Another feature is the provision of a direct reporting role to the president and other quasi-ministerial functions. Nigcomsat Limited, it must be remembered, is a fully owned by the Federal Government of Nigeria and has been vested of an asset, NigComSat 1R satellite ,which comprises of 4 c-band, 14 Ku-band, 2 L-band transponders and the leading Ka-band technology with 8 transponders. The Network Operations Centre and the Satellite Control Centers are located in the nation’s capital Abuja.

According to some practitioners though, before Nigcomsat can win confidence of the potential market it also requires additional satellites as back up. In fact some have posited that three satellites are needed to achieve the perfect balance of economics. I find this a bit difficult to understand, considering that the current resources on that satellite are enough to exploit opportunities considerably. It is difficult to see how the path of prudence can dictate that additional investment - running into probably hundreds of millions of dollars - can be justified on a project that has had a one satellite de-orbited, and the second currently in an opaque commercial state of affairs, considering that we do not know exactly what has been developed as real business prospects and what has been derived as revenues.

Furthermore, if the knowledge existed that one satellite could not provide the required ROI, why then did we embark upon the procurement of only on satellite knowing fully well that the investment would basically not be optimized. Who was thinking about the time value of money lost, or the opportunity cost of the resources expended?

Speaking to journalists recently, the NigComSat boss Ahmed Rufai said a parliamentary law would also boost confidence of international partners, which was necessary for the company to deliver on its mandate. However, the Mister of Science and Technology, Prof  Bassey Ewa- Henshaw, during the recent Senate hearing is reported to have stated that  by passing the bill, the management of NigComSat Limited would be duplicating the duties of the National Space Research and Development Agency and other government agencies, including the Nigerian Communication Commission. This, he said, was not only capable of embarrassing the nation but was against all international norms and ethics, particularly in the space sector.

Furthermore, Nigcomsat’s supervising minister, Mrs Omobola Johnson, Minister for Communication Technology stated that she learnt about the bill in the media. She is reported to have further  said  that  the proposed bill is uncalled for in view of the fact that  NigComSat Limited has all the independence it requires  to function efficiently and effectively without the bureaucracy associated with the civil service.

According to the Punch Newspaper of November 27, 2012,  Mrs Johnson  said that the agency was deliberately incorporated as a private company by its originators to fulfill its commercial obligation to repay a loan taken by the Federal Government to build NigComSat-1. She is reported to have explained that that bringing NigComSat Limited as an agency of government simply indicated that the company must come under government control and administrative guidelines, adding that such agency would not have flexibility, independence and agency advantages. She said the incorporation of NigComSat Limited as a limited liability company with a documented intent to privatise as soon as practicable was more in line with government’s policy direction for the telecoms industry and should therefore be pursued instead of the transition of NigComSat Limited into a government corporation.

In summary, as I understand it,  a  Nigcomsat bill, which proposes to secure all sorts  of powers for the agency was floated and pursued through the house of representatives right up to the point where it was passed. As I understand it, the supervising ministry which has overall policy, monitoring and supervisory responsibilities was not even aware of the development until it had scaled a few readings. And as I understand it the Senate of the Federal Republic of Nigeria has held a public hearing on the matter. It is also clear  that  perpetual controversy cannot be the most fertile and focused environment for an organization to exploit commercial opportunities effectively.

The situation can only  be  described as bizarre, and one hopes that a comprehensive investigation into this slap on the face of the president has been initiated. Nigeria’s constitution implies in section 147   that a president may act through himself or a minister. This clearly suggests that a minister is the president’s proxy/ representative in a sector considering that he may choose to act as Minister in that sector.  Therefore, if an agency with reporting lines to the ministry commences the process of pushing a bill – which completely rearranges the policy, regulatory and operational aspect of an entire sector - through parliament with no recourse to the Minister or Ministry, that  agency  affronts the presidency, the president and critically the established norms of systemic hierarchy and responsibility.

The Sector needs to be aware that there is a huge army of youths who see the proper functioning of this sector as part of their inheritance from a generation that has shortchanged, duped and demeaned them. If we deny our youth and future generations a springboard   - that   an organized ICT ecosystem can become - they will ensure we are denied peace of mind now, and in our twilight years. We simply cannot inject every sector with the debilitating syringe of confusion and then expect normalcy and peace. There must be islands of sanity that other sectors can emulate.

This sector has to be about innovation, growth and development, not the establishment of government-funded fiefdoms, with technology acreage to rent out. That takes us back to the path of rent seeking, which unfortunately always becomes the focal point when government dabbles into business ownership in Nigeria. Examples litter our landscape from Nitel, to NNSL to Nigeria Airways. With its current asset pool, soma clear path to commercial sustainability and focus, Nigcomsat can start to build the market confidence it says that it needs through the provision of competitively priced and innovative solutions, especially in the realms of opportunities that play to its strengths. 

As we  await  the  findings and the output of the Senate of the Federal Republic of Nigeria, Government should please accelerate its efforts to get out of the ICT business space as a service provider, competing with the same entities that it collects taxes from. This is a globally recognized and embraced view by all people and responsible organizations seeking open markets, competition, innovation and transparency. The current agitations play to the  suggestions that some people are simply bent on creating another entity that will serve as a conduit into governments coffers for the purpose of sucking government milk – for a select few and ultimately to the disadvantage of Nigeria. If true, it is lazy, undignifying and brazen. It also demeans the efforts of those who are investing in innovation and the Nigerian dream with their toil and sweat, and is a shameless resort to the continued banality of surviving on government milk – a situation which may lead to milking the cow dry. 

Tags: Business, Nigeria, Featured, Nigcomsat Drama

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