The President, Nigeria Internet Group and Chief Executive Officer, IceCool Contracts Limited, Mr. Destiny Amana, in this interview speaks on the need for tax reduction for Internet Service Providers. Nosa Alekhuogie presents the excerpts:
Tell us about Nigeria Internet Group (NIG)?
NIG is a body that was founded in 1995, it was created when the former Head of State, Sani Abacha wanted to block the internet because he saw it as a tool that could be used against him. At that time, the Nigerian Communications Commission (NCC), was a smaller body created as a steering committee.
From there, the internet group started to look into how to help with the positive image of Nigeria on the internet. At the time, you couldn’t even browse certain websites, because as soon as your Internet Protocol (IP) address came up, you would be black listed straight away because of the high rate of Internet fraud. So the NIG started doing a lot of advocacy to promote Nigeria in the positive light on the internet. As soon as .NG came unto our radar, NIG wanted to have control of its domain name. At this time the current Chairman of Zenith Bank, Jim Ovia, became the President of NIG and was the first entrepreneurial president we had. He made it his task to bring .NG to Nigeria. Everything that was required from Nigeria, Zenith Bank provided it. At that time, it also helped to sell the Zenith Bank brand as the bank of the internet. As a body since inception, we have done quite a lot of things.
We have helped to increase awareness about the internet in Nigeria, we have been part of the ISPs being able to get their licenses from NCC. We have made a lot of positive and impactful contributions to virtually all government policies and administrations that relates to the internet. We have provided a little bit of knowledge to the government on e-learning, e-government, e-health, and we also have the internet for jobs initiative. If you bring an idea to the NIG that uses the internet to run 100 per cent and you can prove that it would give jobs to Nigerians, we can raise a grant of a million naira to give to you. We have about seven to eight companies that started then, and they are going on right now. I became the president in January 2018, so far I have used the first year to consolidate and wake up awareness about the NIG. Prior to my presidency, in the last 4-6 years, you haven’t really heard much about the NIG. So the first year has to do with consolidating, rebranding and rebuilding, as well as moving the NIG in a direction we want it to move.
The internet is such a wonderful tool. I want to see all web designers, developers, bloggers collaborating. We need to have some sort of forum as a way of meeting on a regular basis and sharing information. It is a way of giving back.
For some time now, internet in Nigeria has been readily available, what is responsible for that?
The great thing about Nigeria is that when we wake up to anything, with over 180 million plus, that thing has to be prepared to carry load. When GSM came to Nigeria, we were just one of the countries that they were going to pass through, but it became an explosion. The telecommunication companies make so much money from us because we consume so much especially when we wake up to things.
In the western world, most of the topology of the cities are well planned, they have already laid cabling, and fibre all over the place. Internet along fibre is the fastest internet you can have. In Nigeria, we entered the telecoms race quite late and so we use radio, and radio used to be very expensive. But technology has become better in such a way that we now have 4G LTE, which allows the same radio designs to have more capacity to carry more data to carry more customers to connect to them. That way many of the ISPs can provide much faster internet than VSAT was in those days at a fraction of the cost. That’s why the internet has become so much better and of course, with the ISPs providing the internet, the telecommunication companies couldn’t let that go pass them. They already had their towers all over the place, all they have to do is add the radios unto the towers and the same customers that are on the GSM would be able to use the internet as well. Of course there are still companies that have decided to go the fibre route, but it’s cash intensive because they have to drill up the holes and lay the fibre afresh. Unfortunately in Nigeria, we have multiple taxation, and all manners of settlement of people to get things done. So the cost of getting the infrastructure out is very high and the cost of maintaining it to make sure people wouldn’t tamper with them is also very high. Those cost are eventually passed back the value chain to the consumers.
One of the greatest challenges of internet for customers is cost. Considering the low purchasing power of Nigerians what can the government do to make internet cheaper?
The government is already working hand-in-hand with NCC to try to reduce multiple taxation for ISPs that want to lay fibre. Because fibre is the cheapest, once the fibre is laid, the capacity of the fibre can’t be used up. If you put a radio on a roof top, it can only service an amount of people in the facility. If more people move in they can’t connect to the radio because of the risk capacity of the radio. But with fibre it is different, if you have a fibre come into this facility, it can carry every single house and still have space. It would carry voice, data, video, TV channels. So what government is trying to do is to reduce the number taxes that ISPs are paying. The government has given many international companies licences to land submarine cables. We have MainOne, we have SAT 3, GLO 1 and all these undersea cables are bringing internet into Nigeria. So the main issue has always been the last mile. The last mile is described as the people who buy from the satellite cable providers and distribute to the users. These people who are called the last mile are the ISPs that we know, they are the ones that charge a certain amount for internet access.
Despite the availability of internet, there is still low internet penetration, what role is the NIG playing in reversing this trend?
For low internet penetration especially in the rural areas, double taxation is still an issue. Internet penetration in Lagos, Port Harcourt, and Abuja is getting better, and this is because these are the hubs ready to pay for internet. When you start going out of these areas, what happens is that if these ISPs want to be profitable, you must be able to get a cheap alternative for wholesale before they can now retail it to anybody else.
For example, laying a cable from Lagos to Ogun state, you would go through many local governments which would impose various charges, the state government would charge and then you would need a federal government license to do anything. So its taxation all through.
NCC and the NIG through an organisation called Internet Consumer Advocacy Forum (ICAF) is helping out to address the issue of multiple taxes. It is an organisation that has representatives of all the organisations that are key stakeholders of internet in Nigeria and they advised NCC on certain things. There are bodies that are doing things to help the internet in Nigeria. It doesn’t happen overnight but I am happy to say that within the last nine months with my tenure as president, we are making a difference in NIG.
Remember that NIG is an advocacy organisation, so we advocate. What we are trying to do first of all, is create awareness first. NIG has been virtually lifeless till I became president. We are still struggling; we need to get funding but we are doing what we can. The first year is to gain momentum as an organisation that has clout. The way we are going to do that is by increasing our membership, finding people who have similar mind set. Once we have that, by the end of the first quarter of next year, and the beginning of the second quarter, you would see us moving to the next phase of my tenure which is to exercise advocacy rights. Increasing internet penetration, getting different associations of Nigeria society of engineers to try to induce laws into the government that force road building companies to implement ducts in the roads when it is being built. If you build a road and you don’t build it for future expansion of roads, internet or filing fibre, the road is destroyed when they come to lay the fibre but if you build a road with ducts going through, the fibre people can easily them because the ducts are there already. If we advocate and advise the government, and also advocate and advise the businesses that are going to do these things, when they do their designs, it will all benefit Nigerians and Nigerian organisations.
Over the years, Nigerians have been complaining about internet service providers, which includes telcos. Why is it difficult for them to improve their services which includes both voice and data?
First of all, the fact that you can even make a compliant means that they are doing something about it, they want to know where there are problems. When people wake up to something new, everybody goes and uses it. The networks are still trying to reach the requirements of Nigeria. Four to five years ago, our population was 180 million, in another four to five years, they will be telling us it’s almost 200 million. So you can imagine what it would take them to be able to keep up. It would be very hard to try to keep up unless technology changes and technology is changing. Where are we now, we have gone into 4G, but 5G is coming out and it is so much faster, so much more capacity. Handling 5G is just about getting the technology into the country, we would handle it. We handled 4G and 3G. It is difficult for telecommunications because of the population they have to cater to and the cost of keeping their hardware working. It isn’t easy.
Your organisation was founded in 1995, what are your major achievements so far since inception?
We have the internet for jobs initiative, we have hosted international workshops on internet connectivity in Nigeria namely ‘A way forward’, promoting internet awareness and strategies for effective internet penetration and use in Nigeria since 2001. As a result of previous efforts by the group, NIG received a presidential directive to work with the Ministry of Communication to remove all the constraints and obstacles to internet service provision and development in Nigeria which we are actively doing. We have organised a lot of training courses, seminars, conferences, workshops and exhibitions, since 1995 till date. Through the awareness campaigns of NIG, the government was motivated to grant fifty internet provision licenses to organisations including the NIG.
What is your opinion on threat posed by fintechs to conventional banking systems?
Right now Fintechs in Nigeria are growing in leaps and bounds and the Central Bank of Nigeria (CBN) is trying its best to keep up. It’s doing a good job so far and that is because there are people there who have insights and realises that it needs to hire young people as well. In the old days, CBN was full of lot more elderly people, now there are quite a few young technology friendly people working with CBN. One of the things that a lot of Fintech companies are using to leapfrog Nigeria into this tech revolution is Block Chain tech. I was at a Blockchain conference recently and I was really surprised to see the amount of companies that are starting off using this technology to do things like virtual loans, (companies that give loans with no collateral). Block chain tech also leads to crypto currency, which is something that the CBN frowns at because it decentralised money but there are some African countries using block chain technology to stabilise their economy. We need to find a way to buy into what they are doing because we cannot force the value of the Naira and have two parallel markets running otherwise we would be in deep trouble. We need to increase our output to decrease the exchange rate and if there is a way of doing that with technology, I’m all for it as well. Because Nigeria has a bad reputation for fraud, our banks have had to work 4-5 times harder than the western banks to prove that they are as equally safe to bank with as their counterparts abroad. It would surprise you to know that the applications that we use and take for granted here in Nigeria, most of the applications abroad cannot do the same thing. I think there is a situation where the fintechs and the banking systems will harmonise, the banking system will realise that it needs financial technology revolution to leapfrog into the next phase.