A REVIEW OF THE NATIONAL POLICY FOR THE PROMOTION OF INDIGENOUS CONTENT IN THE NIGERIAN TELECOMMUNICATIONS SECTOR

Introduction

On 6 May 2021, the Nigerian President launched the
National Policy for the Promotion of Indigenous Content in the Nigerian
Telecommunications Sector (the “Policy”). The Policy was developed by the
Ministry of Communications and Digital Economy in line with Section 148 of the
Constitution of the Federal Republic of Nigeria 1999 As Amended, Sections 23(a)
& 25(1) of the Nigerian Communications Act 2003 and the Presidential
Mandate by President Muhammadu Buhari, GCFR to the Minister of Communications
and Digital Economy to so act.

The Policy also derives its authority from the
Presidential Executive Order 003 issued
by the Federal Government in May 2017 on “Support for Local Content Procurements by Ministries, Department and
Agencies of the Federal Government of
Nigeria” and the Presidential Order 005 issued in February 2018 for the “Planning and Execution of Projects,
Promotion of Nigerian Content in Contracts and Science, Engineering and Technology”.

Focus Areas and Policy
Objectives

In order to successfully promote indigenous content in
the telecommunications sector, the
Policy focuses on 4 (four) key areas which include: 

1.   
Manufacturing: The objective of
this focus area is to amongst other things:

a.   
Stimulate the design, development, production, sales
and utilization of high-quality telecoms equipment and services developed by
indigenous companies.

b.   
Incentivise the production of cables, connectors,
masts and telecom tools in a way that meets global minimum and certification
standards.

c.   
Encourage the establishment of vocational training
institutes focused on the design, fabrication and assembly of telecom
equipment.

d.   
To encourage partnerships and collaboration between
global Original Equipment Manufacturers (OEMs) engaged in the manufacturing of
telecommunications equipment and indigenous players.

This focus area also provides that Telecom operators with foreign participation need to
prepare and present to the Regulator[1], plans for local manufacturing of foreign
sourced software, equipment and
devices.
However, the intended
production and manufacturing of these devices and equipment should be Type Approved by the Nigerian Communications
Commission (NCC) and Standards
Organisation of Nigeria (SON),
where applicable, in order to meet the NCC’s specifications and standards and also
adhere to international standards. It must be noted that the Policy seeks to
implement the immediate manufacture of SIM cards in Nigeria locally.

2.   
Services
and Software for Telecom sector: This focus area covers Business Support Services (BSS), Operations Support Systems (OSS), Performance Monitoring, Customer Resource
Management, Data Analytics and
Network Inventory Management, Mobile virtual operating services and other exclusive
telecom services such as call centre operation, mast site operation etc.

The Objective of
this focus area includes but not limited to:

a.   
Insitutionlisation of a mechanism to ensure that
certain category of telecom services are reserved for indigenous players; and

b.   
Monitor and anlayse indigenous content compliance by
operators and service providers.

This focus area
also emphasises localization of data in Nigeria as a strategic policy tool by
ensuring that data created within Nigeria stays in Nigeria. This Policy is to
the effect that the enforcement of data retention in-country would incentivize
the development and growth of the indigenous data center industry through
investment in infrastructure and creation of jobs.

3.   
People: This area focuses
on an emphasizing skill rather than degrees, a support for
emerging
technologies, local telecom
start-ups etc. Specific
objectives of this focus area are as follows:

a.   
Building the skills capacity of Nigerians and the
indigenous telecoms companies in order to access opportunities within the
sector.

b.   
Definition of minimum indigenous content levels for
projects across the telecommunications value chain and

c.   
To support the development of the local telecom
startup and entrepreneurial ecosystem by making the licensing framework less
cumbersome for new entrants and telecom startups.

Succession Plan in the Telecom
Sector:

a.    Telecom companies
with foreign participation should have clear succession plans for indigenes to
take up senior management roles within larger operators.

b.    A minimum
Expatriate Quota requirement stating that each expatriate employed by a company
should be understudied by 2 Nigerians. Such expatriate quota must be first
approved by the regulator.

c.    Modalities must be
put in place to ensure that foreign companies are not allowed to trade directly
in certain segments[2]
of the
telecommunications markets
unless there is a certain percentage of indigenous content or ownership.

4.    Research and Development for Digital
Innovation and Entrepreneurship: This focus area aims to among others, to support win-win partnerships and
knowledge transfer between indigenous and
foreign companies, to mandate
telecom institutions to create a platform for research and development within the country and to support research and development efforts
aimed at advancing the impact of
indigenous content in the telecom sector.

Creation of the Office for
Developing the Indigenous Telecom Sector (NODITS)

The Policy creates a Special Purpose Vehicle called the
Nigeria Office for Developing the Indigenous Telecom Sector (NODITS), under the
purview of the NCC to stimulate the development of indigenous content in the
Nigerian Telecoms sector. NODITS
will implement the
Policy, as well strategies, standards, guidelines and frameworks aimed at developing indigenous content in the
Nigerian telecommunications sector.

The main
functions of NODITS includes:

1.   
To
support the creation and implementation of guidelines for the development of indigenous content for the
telecommunications sector.

2.   
To
stimulate the growth of the sector through a focused, sustainable and incentives-based approach that encourages
the active participation of the indigenous
telecom operators.

3.   
Liaise with the Office for Indigenous Content
Development at NITDA; (Quarterly
Meeting)- for synergy and convergence of digital technologies.

4.   
To
facilitate the sourcing of indigenous products, manpower and services across the entire value chain of the
telecom sector.

5.   
To
evaluate and endorse Indigenous Content plans for operators in the telecom sector.

6.   
To
create a platform for research and capacity building programs that prepares Nigerians to play a leading role
in the telecom sector.

7.   
To
promote innovation and entrepreneurship in the telecom sector.

8.   
Promotion
of indigenous phones and other telecommunications equipment.

9.   
To
create and update a roadmap for the implementation of this Policy and ensure active monitoring and enforcement
mechanisms for promoting indigenous content
in the telecommunications sector; and

10. To monitor indigenous content compliance by
operators and service providers.

CONCLUSION

The Policy seeks to enhance
the economic development of Nigeria and ensure that Nigerians develop the ability, skills and manpower to play a leading position in the telecommunications sector. The Policy focuses on key areas like software development
for the telecom sector, manufacturing capacity building, research and development,
digital innovation and entrepreneurship, etc. As much as this is a welcome
development, the Policy is largely merely suggestive as definite guidelines
were not expressly outlined for telecoms companies to adhere to. Therefore, we
expect definitive guidelines to be issued by either the Ministry of
Communications and Digital Economy and or the Nigerian Communications
Commission in the nearest future.

[1] The Policy
does not define “Regulator” however considering the Policy relates to the
Telecommunications Sector and the Nigerian Communications Commission (NCC) is
the primary regulator of the Sector, it can be safely assumed that the
Regulator being contemplated by the Policy is the NCC.

[2] Please note
that the Policy does not define nor describe what would qualify as “certain
segments”.

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For further information on the foregoing (none of which should be taken as legal advice), please contact:

Amaka Ukuta

Associate

amaka.ukuta@ao2law.com

Daniel Odupe

Associate

daniel.odupe@ao2law.com 

Oyeyemi Oke

Partner

oyeyemi.oke@ao2law.com

Contact with the subject: “Briefing Note on the National Policy for the
Promotion of Indigenous Content in the Nigerian Telecommunications Sector”.

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