Onu: Technology Business Outsourcing Key to Wealth Creation 

David Onu

Chairman, National Association of Information Technology Enabled Outsourcing Companies and Managing Director, Interra Networks, David Onu, spoke with journalists on the importance of technology outsourcing for wealth and job creation and the need for collaboration on ICT parks. Emma Okonji brings the excerpts:

The National Association of Outsourcing Companies of Nigeria which you chair recently organised a national conference to boost the prospects of outsourcing in the country. What is your general assessment of the event?

It was a very successful event. We really thank God for His mercies. The turnout was amazing. We had various participants. We had the job seekers. We had government participation. We had private sector participation. It was very well received. The feedback we have been getting about the conference since the event has been tremendous. Some clear actions have come out since then. We are hoping to work with our partners and stakeholders to execute the things that were agreed on at the event.

So, after the event, what next for technology outsourcing in Nigeria?

This is where the journey starts. As they say, a journey of a thousand miles starts with a step. The event was our one step start. We are very happy with the support we received from government; from the office of the Vice President, and the Special Adviser on Economic Matters, Ambassador Dipolu, made it clear that the focus was on the agenda of what government wants to achieve; the idea being that outsourcing is a clear way to create jobs and wealth.
We are also grateful for the support of the Minister of Communications, Adebayo Shittu. The minister has articulated what he would like to do with this and has actually asked us to see how we can put heads together to articulate a strategic action plan on how to grow the sector over a five-year period. He has mandated the National Information Technology Development Agency (NITDA) to work with us. We are excited about that. As well, our development partners – the World Bank and others, have all expressed their interest.
The issue has always been having one sort of catalyst to bring everybody together and work towards the objective. What we are trying to achieve is to have a common framework to put this industry forward. This requires a little bit from everybody. So, there is a role that NITDA has to play, and there is a role that the ministry has to play.
There is equally a role that other sectors have to play. Like the financial services – the Central Bank of Nigeria, the Bank of Industry, the regulatory aspect, the Federal Inland Revenue Services. Every sector has a role to play to grow this industry because it is not just an information technology (IT) thing. What we are hoping to do is to create that framework where everyone can find his own part within that roadmap.

How do you create the framework and the roadmap?

We are not reinventing the wheel. This sector is matured. What we have done is to evaluate what has been done on the supply side in countries like India, Philippians, Ireland, and the demand side, the companies that buy the services like in the United Kingdom, United States, Germany, and all that. We have taken time to understand how this industry evolved in those markets.
What we  have found is that there are some major areas of activities to support this industry. In Nigeria, those key activities are handled by different organisations. In the framework we are developing, we will define the expectations of those key areas and what needs to be done. We will now charge those individual agencies, departments and ministries with what needs to be done.

Can you give a clearer picture of what needs to be done?

I will give you an example. One of the major things that needed to be done is a legal framework because companies that outsource to you want to know if they have legal recourse in the event of something going wrong. So, there is a need for proper education of the judicial system – not just the judges but also the lawyers. A lot of lawyers in Nigeria today, need training on technology evolution and how to settle disputes in the 21st century that is entirely driven by technology. This means an engagement with the Nigerian Bar Association since it is the body that manages lawyers on the need for them to understand technology and electronic transactions.

What are the investment strategies in relation to incentives?

Nobody just does things for the sake of doing them. Countries have clear investment strategic programmes whereby you invest in a country. There are concessions and there are incentives. Those incentives in Nigeria are managed through different agencies like the Federal Inland Revenue Services (FIRS) for instance. A tax holiday, for instance, is what is always welcomed by everybody. We need to make sure that we can offer such and offer such under a guideline or a framework that FIRS or anybody that does taxation manages.

How do you manage the issue of poor infrastructure?

The issue of infrastructure has always been raised but the question is what infrastructure do  we need. In most countries around the world, these infrastructures are built in special ICT parks or zones. This means in that area, you can provide all  the required infrastructure – power and whatever you want to put there and companies can come and take advantage of it. So, we will like to have a design for ICT parks and hand over to those charged with building ICT parks to build according to the plan.

So how do you manage publicity to create the necessary awareness?

In the issue of publicity, there are two Nigerian agencies charged with publicising Nigeria – the Nigeria Investment Promotion Council and the Nigeria Export Promotion Council. We can work with them to channel advertising to promote Nigeria as it relates to technology. They can still do what they are doing but we give them the technology framework on how to promote Nigeria. This is our idea of having a framework. You can still do what you are doing in your own agency but it is according to the guidelines to boost the industry. That is what we are putting together. We hope to have that in the next few weeks and share with government.

You were talking about ICT parks and the one that readily comes to mind is the Abuja Technology Village. What exactly is going on there?

Absolutely fantastic and I will tell you why nothing is happening there. The initiative was very worthwhile – very commendable of Nasir el-Rufai who initiated it – I guess in 2005.  I think one of the reasons was that from inception it was seen largely as an FCT project. The project would not survive if it is seen as a project of one single agency.
For an ICT park to work, there are so many components to it. It is not just a physical infrastructure like we talked about incentives. No matter what infrastructure you put there, it is not going to give any person a tax bridge. No matter what FCT puts there, it is not going to publicise the place to the persons that need to know about it. It is not going to affect the laws that need to be changed. So, it is a collective effort.
Actually, there are three ICT parks that are worthy of note – Abuja Technology Village(ATV), Delta ICT Park, and Kano ICT Park. Commendable projects but we need to get away from seeing them as construction projects. There is more to it. That means there are more projects to be brought in. Then, more importantly, the anchor tenants.  When AujaTechnology Village  was being built, we were told to come and take up residence there. My own staff refused. They said there are no roads there; and that several other amenities are lacking there. So, you also have to carry along the prospective tenants so that you can also make sure that you are building it to the specifications that will suit them. So, ATV is a project that we hope we can channel some of this new government’s resolve towards the FCT. We have mentioned that particular projects to stakeholders  that it is a worthwhile project, that there is a need to see how it can be further supported. So, hopefully, this time around, we might get it right.

There is a report that most of the technology spends in Nigeria are not being retained in Nigeria. How does that affect the local industry and how can we change the scenario?

It affects the industry tremendously. On that note, I will like to spare a second and express my deepest regret at the death of Mrs. Florence Seriki, the Managing Director of Omatek, who was one of our board members. I express my regret because she was one of the flag bearers at the forefront of this issue of local content and the need to champion our local technology support.
So the estimate is that in Nigerian government and the private sector – we expend well over a billion dollars every year. The estimate is that 80 per cent or more of that expenditure do not come back because either it is in one software that was purchased abroad or one piece of hardware or equipment from abroad.
Now, we are not asking for protectionism. Today, we are in a global economy but we do ask for opportunity to showcase what Nigeria has. What we estimated was that if Nigeria is to spend 10 per cent of what is being currently expended collectively abroad on local industry in the area of software, hardware development, support and maintenance, consulting, training, 10 per cent will be about $100 million. If you do the calculation at current exchange rate, you will get N50 billion. Imagine the impact that can have on the local economy – the number of jobs it would create, how much wealth that would be created in the economy, and this is only 10 per cent we are talking about.
Many countries are becoming deliberate and intentional about growing their local technology industry. We don’t do the same. Nigerians prefer to patronise foreign products at the detriment of local manufacturers. We praise companies like Julius Berger. It is a good construction company. But how do you know that Bayo and Sons will not be a good construction company. One, if you pay him as you pay Julius Berger, put him under the same supervision, and guideline, he can produce same result. Remember that it is still Nigerian engineers that in Julius Berger. You find that the Nigerian engineer is not given the same opportunity, and because, he is not given the same opportunity at the same cost, he is not likely to produce the same result.

How best should Nigerian engineers be treated, when it comes to government contract?

We have seen Nigerian companies that have done fantastic work in architecture, in engineering, in technology because they were given an opportunity. We should stop this mind-set of foreign first. As a technology practitioner in Nigeria, I can tell you that there are a lot of talents and there are very few things you get abroad that cannot be home grown. It is just research and development but research and development requires funding and support. There are certain things to be done technology wise, that government has no need to look outside to get it done. Nigerian engineers should be given the opportunity and the right environment to operate.