BY: Gina Emmanuel
The Director General, National Office for Technology Acquisition and Promotion (NOTAP), Dr. Dan-Azumi Mohammed Ibrahim, has declared that the country is not doing well in terms of infrastructure, which also mirrors and impacts negatively on the educational ecosytem.
Notap is an agency under the Federal Ministry of Science and Technology.
He speaks on various industry’s issue including the status of the agency and capital flights.
What is the status of NOTAP in developing the frontiers of local content technology in Nigeria?
The National Office for Technology Acquisition and Promotion (NOTAP) is one of the 17 parastatals of the Federal Ministry of Science and Technology. One of the major mandates of the office is to regulate the influx of foreign technologies into Nigeria but we also have the responsibility to encourage the development of local technologies. Technology, in real sense, is what demarcates developed and developing nations.
Nations that have developed very well, I think, have been able to come up with technologies that could power their economies and, according to our records, more than 90 per cent of the technologies that power the Nigerian economy are foreign and, as a nation that is aspiring to become independent, we have to come out with policies and programmes to ensure that we develop local technologies.
In terms of local contents, what I would say is a result of technological research and development (R&D). Japan does not have one-tenth of the resources Nigeria has but Japan is one of the global economies to reckon with. Why is this so? It is because they have been able to develop technologies.
Technologies will help us convert the local resources we have in this country to the level that it could become either a product or a service or even a raw material to even existing industries.
So, in terms of local contents, you must have technology developed because, as I said, more than 90 per cent of the technologies that power the Nigerian economy be it in manufacturing, power, banking, ICT, are all imported.
If the technologies that power your economy are imported, how you will be able to develop local contents is either to develop technology locally that would now add value to resources you have or you allow technologies from outside into your own country but by that time, you prepare what we call the ‘human magnet’ that should be able to capture some of those technologies brought into this country, domesticate them, adjust them and make them your own technologies.
That is how we would be able to improve on local technologies.Nigeria has been refining oil for a very long period of time and the technologies, in terms of oil refinery, are imported and despite the fact that the refineries have been in existence for over 50 years, we still rely on people from outside to come and do the turnaround maintenance.
It is because we have not placed a lot of emphasis on developing our human capacity that would enable us to develop our technologies or bring in technologies, adjust them and make them your own technologies.
Iran was in the same level with Nigeria but now; Iran can comfortably export refineries outside their own country. So, in terms of local content, we are not doing too badly but we have a lot to do.
First of all, from where are the technologies generated?
Technologies are generated as a product of R&D efforts. Where do R&D efforts take place? They take place in universities and research institutes. So, these are the sources of technologies.
These are where the technologies are expected to come off to catapult Nigeria into economic prosperity but how are our universities faring? How are our research and development institutions faring? Do they have enough equipment?
Do they have the capacity? Even though we have the human capacity, if you look at infrastructures in terms of laboratories, workshops and so on, we are not doing very well.
So, for us, to ensure that our local content policies continuously increase, we have to place a lot of emphasis on our infrastructure that will assist our universities and research institutes to now encourage them to carry out R&D efforts that could generate technologies. Specifically, let’s look at the area of foreign software licensing in Nigeria.
What is your assessment of activities in that space?
In the last six years, more than 99.9 per cent of the software packages that are used in the banking industry are imported and if you see the amount of money that leaves this country as software licensing fees, you will shed tears.
In fact, it is with pain and difficulty that we approve those software agreements. But we have no option. So, five to six years back, we said to our self that we had to do something to ensure that Nigerians must do the deployment of every software package coming from any foreign country to Nigeria.
Nigerians must be part of the deployment exercise. Through this exercise, you will be able to develop the capacity of Nigerians in terms of the deployment of those software packages.
If you are involved in the deployment of software in the various sectors, by the time you deploy and maintain it over a long period of time, you may be able to acquire some of the skills and technological expertise needed.
In the process, I would insist that any software coming into the country, Nigerian firms must be involved. If you involve a Nigerian firm, you are developing the Nigerian firm’s indigenous capacity.
Then, another thing is that, we feel also that, we must give them the financial muscles. If software is imported into the country, the amount of money you pay is in lump sum. Then, after one year, you pay what we call technical service fee.
That is like mountainous fee and we insist, out of this mountainous fee, six per cent must be paid to Nigerians. So, any software agreement coming into Nigeria and registered with us, we insist that its deployment must involve a local vendor who will also get 40 per cent of the annual service fee.
With this arrangement, you are economically empowering Nigerians; you are also developing the capacity of Nigerians through software development. Through this action, we have been able to see now that Nigerians have developed capacity or are developing very serious capacities in terms of software development.
Now, they have started coming out with some software solutions. The truth, however, is that we cannot be in a hurry because where more than 99.9 per cent of software that powers the Nigerian economy are imported, it takes time for Nigerian software to comfortably compete with those of foreign software packages.
Another thing is the attitude of Nigerians. Some of those software solutions they import have so many modules and not many of the modules end up being effectively utilised by Nigerians.
But Nigerians are able to customise some of those modules to suite our environment. The issue is, yes, local software products have started penetrating but in a slow pace. But it is a matter of time as far as I am concerned.
Now, the software products imported into the system are paid in dollars. The truth is that Nigerian economy can no longer sustain that kind of extra expenditures. We are used to getting dollars freely. Now, source (s) of foreign exchange is very scarce.
The reality on ground will now force establishments in Nigeria to now use locally developed software solutions. And as a matter of fact, what is local is, by far, cheaper; it is robust and, by far, in terms of maintenance, the people that develop the software are always there locally to support you 24/7.
So, the Nigerian economy has started accepting the software developed in the country but it would take time. But I feel the five years efforts that we have put in place are yielding positive results.
The Central Bank of Nigeria (CBN) recently introduced a flexible exchange rate. What effect do you think this portends for the industry in the area of local patronage?
You see, a good number of industries bring experts from outside the country and bring in software and in some cases, raw materials from outside. Now, if you look at the current flexible exchange rate, what we used to get is N198 as official rate but now it has catapulted to N360.
If you continue to rely on an imported product that means you will pay a lot of money. By the time you produce a product, it may not be within the reach of an average Nigerian and the Nigerian population is a very good market for all international organisations in terms of manufacturing, software licensing and what have you. So, this forex regime will now force us to start developing things locally.
For instance, if a company is importing raw materials from abroad, we have a company within the country that is trying to produce something similar to that. It would be far cheaper producing the product locally than to import raw materials.
If you keep importing, in this kind of scenario painted, you won’t be able to compete favourably because cost of production will be too expensive and an average Nigerian would not be able to afford it. Even the companies have started looking inwards.
For instance, PZ is working assiduously to source calcium carbonate from China and we have a lot of calcium carbonate in Nigeria that is not yet fully tapped. We have had a forum within Nigeria and PZ has acquired about 26,000 hectars of land to plant palm trees so as to be able to extract palm oil.
This is backward integration effort instead of them to continue importing oil for their own operations, they are now looking inwards to develop their oil and they are now going into farming.
Would you say that our local content policy is robust and how well do you think the country is implementing it?
For us to move forward as a nation, all regulators must have to be patriotic. Put your nation first and our ‘elder brother nations’ did a lot and that is why we are enjoying the services they have rendered. I have been able to go to school through scholarship from secondary up to PhD level.
Now, from nursery and primary today, people are paying from their own pocket. That is not sustainable. So, if you want to improve on local content development, the regulators must have to be nationalistic.
We have to insist that if we have certain raw materials, solutions or capacities in this country, we insist that anybody, who is coming to do business with us, has responsibility to invest in local content.
If we leave it the way it is, we won’t go anywhere. Look at the waiver issue, in those days, people were given waiver to import rice and even after importing the rice, they refused to pay what we call the customs duty and some even over-imported.
If you want to develop local rice, I cannot understand why you give somebody a waiver to import rice, instead of offering firms incentives to produce locally. It is counter-productive.
However, we are looking inwards now and the situation is changing because we know that focusing on effective indigenous technology development is key to unleashing the nation’s economic prosperity.
Government is spending a lot of money now in agriculture and we are trying to block some of these major leakages so that huge quantum of money can now be diverted into the productive sector.
You recently disclosed that NOTAP has been able to save the nation N188.8 billion that could have resulted in capital flight in the last four years. How were you able to achieve this?
Let me say that it is difficult to say how much we are losing as a result of influx of various technologies into the country because not all agreements come to NOTAP for registration.
So, we looked at those agreements coming to NOTAP for registration from economic perspectives. Sometimes, they would bring experts from outside to do one thing or the other.
Where we feel that we have Nigerians having requisite capacity to do the same job, we say ‘No’ to bringing expatriates from abroad to come and do those jobs. So, if they allocated, say $100,000 for that, we would cut it off and we have Nigerians that can do it and must involve Nigerians and that agreements we have saved $100,000 that would have gone out of this country.
But before we register it, if it is a fresh agreement, we take due diligence to go and crosscheck if the exact factory or firm exists, they would give us the addresses of the transferor and transferee, what they do and we take time to go there.
We look at records and find out whether the office exists in the address given and then we discuss. Sometimes, we go to those addresses, they don’t exist. So, that would have been a source of capital flight.
Once it doesn’t exist, you cancel that agreements, we say we are not going to register it and it is through this process – if you quantify the quantum amount of money we saved that would have gone out of this country- that has amounted to about N188.8 billion, which we saved the nations between 2000 and 2014. What could have gone outside this country as capital flight, it is through this process that we saved it.