FG should increase investment in telecom sector – WATRA boss

Aliyu Yusuf Aboki, Executive Secretary of West Africa Telecommunications Regulators Assembly (WATRA), in this interview, highlights the importance of digital infrastructure to drive economic growth in Nigeria and West Africa. What is the mandate of WATRA? WATRA is to foster continuous investment in the development of telecommunications services in West Africa. It fulfils this mandate […]

Aliyu Yusuf Aboki, Executive Secretary of West Africa Telecommunications Regulators Assembly (WATRA), in this interview, highlights the importance of digital infrastructure to drive economic growth in Nigeria and West Africa.

What is the mandate of WATRA?

WATRA is to foster continuous investment in the development of telecommunications services in West Africa. It fulfils this mandate by working with members to promote the timely adoption of telecommunications regulations that stimulate investment and the expansion of more affordable telecommunication services. Our members are all telecommunications regulators in the region. Our NCC (Nigerian Communications Commission) is a very active member.

 How can Nigeria and other West African countries improve their telecommunications infrastructure?

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FG should increase investment in telecom sector – WATRA boss

Greater investment in telecommunications infrastructure will improve coverage and take services to more people and also enhance quality. This will power economic growth in so many ways. The best way for governments to do this is to let the golden geese grow, that is,  telecommunications grow fatter, so it could give more and have bigger eggs. They should reduce costs for operators in the sector – taxes, right-of-way charges, tariffs, spectrum prices etc. This will spur more investment in infrastructure while reducing the cost of services for consumers.

If governments paid more attention to what individuals and companies are doing with telecommunications services, how these services are making the economy more productive and creating jobs, they would reduce the financial burden on the sector to enhance its ability to drive economic growth.

More broadly, regulations should be adaptive and innovative, they should keep an eye on the evolution of telecommunications regulations all over the world and adopt those that have been proven to increase investment and boost economic growth. 

How can governments in West Africa drive the growth of the digital economy?

Broadband connectivity which one can define in the simplest term as fast and reliable internet access is the foundation for the digital economy. Governments need to do everything to ease and enable investment in providing the infrastructure that delivers high-quality connectivity.

A lot of economic magic could be built on this infrastructure. Government should then initiate, sponsor, and encourage projects from the public and private sectors which bring every citizen and every firm, no matter how poor or small or where they are in the country, into the digital economy.  India provides a good example.  Virtually every Indian has a (unique) biometric digital identity. Also, virtually every Indian can be paid through an electronic money transfer because there is a Universal Payment Interface. 

Generally speaking, the government needs to address fundamental issues like the high poverty rate, and unstable power supply. These things have a direct impact on the direct economy itself. Another point to raise is that the government should stimulate demand by encouraging and providing e-government services in health, and education.

In summary, investing in digital infrastructure, training, etc, are things that would help. When it comes to things like e-commerce businesses that can have a far-reaching impact not just within the region, the government needs to support the private sector. Support can be in terms of financing to ensure that these businesses thrive.  

In Nigeria, statistics show that the sector is worth about $75 billion in terms of investment. The operators have been able to connect over 320 million lines of which about 220 million are active. Some of the operators claim to have paid close to N4 trillion in taxes since the revolution began in Nigeria.

With the presence of four major operators, will you say the Nigerian market is saturated?

Even though Nigeria has experienced significant growth in the telecoms sector over the past decade, we have a large population and there is a growing demand for telecoms services, especially when you look at mobile and internet connectivity. If you look at broadband penetration, it’s just about 50% and in rural areas about 15%. Taking advantage of the digital economy is not just about the basic voice connectivity but the internet connectivity which essential digital services could ride on. If you talk about online education, e-health, and others, these require broadband connectivity. So there’s room for growth, not just growth but substantial growth. If you compare with countries like Indonesia, Malaysia, and India where we have similar dynamics, you’ll know that there’s room for growth in Nigeria. 

Operators claim that government is not looking at other sectors when it comes to taxes and excise duty, but is focused on the telecoms sector to bring in more money. How do you see this impacting the growth of the sector especially concerning job creation?

In my assessment, I don’t think increasing taxes is the way to go. On the contrary, lowering taxes makes the sector more appealing to foreign investors which can lead to higher economic growth. And as I mentioned, the digital economy is intertwined with other sectors so you have a ripple effect on other sectors. Studies have shown that countries with lower taxes have higher levels of GDP per capita and increased employment rates.

Overall, reducing taxes and tariffs is an effective way to promote economic growth and job creation. 

In what ways do you think government, investors, and telecoms firms can work together to boost the emerging digital economy in Nigeria?

There are various areas they can cooperate. First, I’ll say is through infrastructure development. The broadband infrastructure development is critical, there’s a limit to which government can invest but there’s also an opportunity for the government to invest and provide incentives and an environment for the private sector to invest. This will certainly create jobs and stimulate growth. 

Another point I highlighted earlier is regarding the training and education programmes to improve digital literacy. If we’re serious about improving the adoption of Internet services, it’s important to improve digital literacy. Additionally, we could have support for the growth of e-commerce, improving the payment systems where for example, CBN, Telcos, and the banks can work together to improve payment systems and promote trust online. One of the key things hindering financial inclusion in the populace is trust. Customer trust building must happen and the government has an important role to play.

Because we’re talking about the digital economy, then the issue of cybersecurity also comes to play. There was a report in 2021 that Nigeria had over 16 million cyberattacks. As we move into the digital economy, we need to have robust cybersecurity standards and mechanisms to address risks so I think government, investors, and telcos can work together to address these risks. 

Lately, there have been issues between states and telecom operators. How do you think this can be resolved so that states can see that there are benefits to enabling telecoms to expand services to underserved or unserved areas?

The first important thing is advocacy and enlightenment about what the digital economy brings. The private sector plays an important role here, working together with the policymakers, they need to communicate the benefits of the overall digital economy. This would send a strong signal to the government to act. It’s also important for the federal government to work towards incentivizing states and local governments, for example, those that choose to reduce right-of-way charges. These are things that fundamentally impact the cost of deployment of infrastructure which in turn is passed to consumers making services more expensive. 

From WATRA and your perspective, how possible is it for telecom operators to provide service at the optimal level for consumers?

Yes, it is possible, however, some factors need to be considered. Fundamentally, what is important to realise is that if you have the infrastructure in place, various factors tend to impact the infrastructure if you compare it with the Western world or the Asian countries where you have a lot of stability. One is power; the unstable power supply that other sectors are facing is the same issue that telcos are facing.

That has got some negative impact. Most of these networks run on generators, and you know how the supply chain of diesel can be epileptic. 

The second factor is the difficulty in ensuring that these infrastructures are not vandalized. We’ve seen a lot of cases of fibre cables laid across the country being vandalized either deliberately or through construction works. These cables require time to fix. There’s been a lot of investment from telecom operators to improve resilience. They can improve themselves but the government needs to support the maintenance of these infrastructures. 

Another point I’ll also mention is the issues of customs and port challenges which also have an impact on the kind of network the operators can build and maintain. I believe the regulators are doing their best to ensure they keep the operators on their toes.

From WATRA’s perspective, what can African countries do to fast-track the adoption of 5G?

If I’m to look at West Africa, Nigeria is way ahead. Nigeria is the country to commercialize 5G within the sub-region. 5G is driven by use cases. The growth of 5G within the region will depend on what use cases these countries can identify that will benefit the citizens. There are issues regarding the spectrum. 5G requires an enormous amount of spectrum to be able to work the way it’s supposed to. A minimum of 100 MHz is required and this is not readily available.  

There are also some fundamental challenges that countries outside Nigeria, Ghana, Senegal, and Cote d’Ivoire need to address. Basic connectivity is absent in many areas, so a lot of effort goes into trying to make traditional internet services available and accessible to citizens before looking at higher-order technologies.

What is your advice to the new government in Nigeria as far as ICT is concerned?

Nigeria has made some strides over the past 10 years, however, there’s a lot that the digital economy and ICT can contribute to the growth of the economy and improving governance. We need to focus and ensure that digital technologies are adopted in the way we do things; they will enhance transparency, improve productivity and reduce leakages.