NOTAP: Local Vendor Policy Implementation Will Block Financial Loopholes

Dan-Azumi Mohammed Ibrahim
Director General of NOTAP, Dr. Dan-Azumi Mohammed Ibrahim

By Emma Okonji

The National Office for Technology Acquisition and Promotion (NOTAP) has explained that the introduction of local vendor policy in the licensing of foreign software in Nigeria will continue to block financial leakages in the country’s software industry, while saving huge sums of money for the federal government and the local information technology (IT) vendors.

Director General of NOTAP, Dr. Dan-Azumi Mohammed Ibrahim, who gave the explanation during his welcome reception organised by the National Software Think Tank (NSOFT) in Lagos recently, said there had been stiff opposition to the implementation of the policy.

But, he insisted that NOTAP would continue its implementation because it has saved the country and IT vendors, huge sum of money that could have left the country as capital flight.

According to him, the policy, which was designed to build the capacity of local IT vendors, allowed local IT vendors to be involved in the deployment and maintenance of every foreign software that is licensed in Nigeria.

“Cost of licensing foreign software varies between $10 million and $100 million, depending on the capacity and specifications of the software, and foreign company is expected to pay Annual Technical Service (ATS) fee of between 12 per cent and 23 per cent of the license fee, while 40 per cent of every amount paid by the foreign software company goes to the local IT vendor for deployment and maintenance of the software, and many IT vendors are already benefitting from the policy implementation,” Ibrahim said.

Speaking further, he said: “We have passion to support the development of home-grown technology. Nigeria was hitherto loosing huge amount of money to foreign countries through licensing fees of foreign software, but we have to change the narrative through the local vendor policy.

“The policy stipulates that before any agreement on foreign software licensing is concluded with NOTAP, it must involve a Nigerian IT company for the deployment and maintenance of the software, before approval for registration is given.
“I see it as a bold initiative of government, even though it came with resistance from different quarters who usually benefit from foreign software licensing.”

Since the local vendor policy was approved by the federal government, NOTAP has been implementing it fully, amid threats and blackmail, but as a regulator, we have remained firm in the implementation of the policy to save Nigeria of huge capital flight and to protect local software industry in Nigeria. The federal government can come up with nice policy, but implementation matters, and that is what NOTAP is ensuring by insisting on full compliance of the local vendor policy, Ibrahim said, adding that NOTAP has a mandate to implement policies that will not only develop local software capacity, but also ensure patronage of locally developed software.

The Coordinator, National Software Think Tank (NSOFT), Mr. Chris Uwaje, said: “NSOFT is a convergence of ICT expert group set up by NOTAP, with the main thrust to advance a five-year strategic plan to encourage adoption of indigenous software for the security and growth of the economy, build commensurate capabilities and capacities to alleviate the critical challenges of the indigenous software ecosystem and provide a formidable roadmap for the advancement, sustainable development and competitiveness of software in Nigeria.

A member of NSOFT, Mr. Bimbo Abioye, said: “Our greatest challenge is absence of regulation. We have seen instances where locally developed software, perform better than foreign software. If for any reason any organisation prefers the use of foreign software to local software, then technical training of staff on the foreign software must be done in Nigeria.

“Nigerians spend so much on foreign licensing and patronage every year, and we need to change that mindset. There should be imposition of tax that is as high as 35 per cent on foreign software to discourage its patronage in Nigeria.

The President, Association of Telecoms Companies of Nigeria (ATCON), Olusola Teniola, said: “Local software development needs government protection through policy formulation and implementation. We need local content development protection to drive local software.”

NOTAP would continue with the implementation of Local Vendor Policy, with government ministries, agencies and departments (MDAs), before extending it to the private sector.

“As Nigerians, we have a collective responsibility to promote software development in the country and we need synergy from industry stakeholders to achieve it,” NOTAP DG further said.