Group Tackles FG over Loss of Revenue to Foreign Software Providers

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President of ISPON, Dr. Yele Okeremi

By Emma Okonji

The Institute of Software Practitioners of Nigeria (ISPON) has blamed the federal government and its regulatory agencies such as the National Office for Technology Acquisition and Promotion (NOTAP) and the National Information Technology Development Agency (NITDA), for the loss of about $400 million (N122.8 billion) annually to foreign software licence renewals and upgrades by companies operating in Nigeria.

President of ISPON, Dr. Yele Okeremi, who said this, pointed out that such amount could be averted if agencies like NOTAP and NITDA were able to up their regulatory roles in protecting indigenous software developers in the country.
Stakeholders had raised the alarm that Nigeria loses as much as $400 million annually to foreign software upgrades and renewals. To avoid such huge loss, which they had described as waste to the Nigerian economy, they had unanimously called for the adoption of indigenous software across financial institutions and other sectors of the economy.

But speaking in an interview with THISDAY, Okeremi, urged the federal government through its regulatory agencies like NOTAP and NITDA, to up their regulatory roles in order to discourage the continuous patronage of foreign software, especially in solutions that are locally available and developed by Nigerians.

“Just like what other developed countries did, Nigeria can enact policy that will not allow inflow of foreign software into the country for a particular period of time like three years and make good efforts to encourage and protect indigenous software developers within the same period.

“If this is done, there will be a significant improvement in the quality and standard of indigenous software and the poor perception about indigenous software will vanish into the thin air,” he explained.

Okeremi advised the regulators not to wait for companies who patronise foreign software to come to them for approval, but to rather reach out to all companies and organisations that use software to drive their businesses.
“Nigeria should be able to rely on indigenous software developers, through the encouragement of regulators like NITDA and NOTAP.

“These regulators should do more of engagement with companies that drive their businesses with software, for them to see the need to patronise indigenous software.

“Government and regulators should be able to identify where the huge amount of money is being spent outside of Nigeria. When this is identified, government, through NOTAP should be able to identify sufficient skills and capacity for the country to be able to substitute the imbalance that has resulted in huge loss of money to the Nigerian economy, through foreign software patronage,” Okeremi said.

He expressed dissatisfaction over a situation where the country has regulatory bodies yet organisations operating in Nigeria are still running foreign software at the detriment of indigenous software developed by Nigerians.
He cited the oil and gas sector of the Nigerian economy, where lots of foreign software application still run, and called for a change in the country’s roadmap for software development, if Nigeria must make meaningful progress in software development.

Making a case for the adoption of indigenous software in Nigeria, the Director General of NOTAP, Dr. Dan-Azumi Mohammed Ibrahim, had said government must come up with workable policies that must be implemented.

According to him, NOTAP in collaboration with the World Intellectual Property (WIPO), Central Bank of Nigeria and other stakeholders, had developed the Local Vendor Policy in 2007, to strategically engage local ICT firms on the implementation of foreign software agreements in Nigeria.

The policy, which came into effect in 2008 states that the Annual Technical Support (ATS) fee should not be made more than 23 per cent of the Software License fee. The payment of ATS should commence one year after the implementation of the Software license agreement. A local vendor must be appointed to be involved in the implementation of a Software License agreement submitted to NOTAP and must be paid a minimum of 40 per cent of the ATS fee in Naira.

According to Ibrahim, in the event of renewing the agreement after one year, evidence of payment of 40 per cent ATS fee must also be submitted to NOTAP.