ICT INDUSTRY PARTICIPANTS LAMENT THE FOREX MARKET'S VOLATILITY

Stakeholders in the ICT industry have claimed that the FX market's turbulence has put a stop to a number of telecom projects while urging authorities to make dollars available to local firms.

Stakeholders revealed at the third edition of the Policy Implementation Assisted Forum (PIAFO), which took place on Thursday in Lagos, that the naira's value against the US dollar has surpassed the N700/$1 barrier on the black market.

Martins Akingba, the chief operating officer (COO) of Estream Networks Ltd, said that the major firms had better access to foreign exchange since they could cross-post dollar expenditures to overseas subsidiaries.

However, they continue to face competition from smaller businesses in the same industry. Almost majority of these international competitors are consortium members of submarine cable providers, but they nonetheless face up against local competitors in the same retail sector, according to Akingba.

The COO said that, five years ago, 80% of operators' input expenses were in US dollars, but that percentage has since dropped to fewer than 20%.

“The sorts and depth of investments Indigenous Operators may make have a significant impact on their growth,” he added. Without a doubt, one of the main causes of local telecom carriers failing is our inability to raise crucial money. The problem has also gotten worse due to the failure of numerous expansion telecommunications projects due to the FX market's instability. How are we going to make ends meet if we borrow dollars at the current rate and repay them at double the original amount years into the project since the naira is constantly losing value？

Akingba, however, gave policymakers the job of making money available, particularly for indigenous ICT companies.

“The regulator must provide us access to money that enables us to successfully compete with overseas firms,” he continued.

He asked regulators to strike a balance so that overseas telecom operators, which have virtually limitless access to money and other production variables, do not reap the rewards all at once, strangling domestic competitors.

In a similar vein, sector administrators must make sure that local entrepreneurs and investors have incentives to invest, while simultaneously ensuring that sectoral growth helps those at the bottom. Policies that have been thoughtfully crafted can do this.

As long as disparity exists in the areas I've just highlighted, inclusive growth in this industry will be difficult to achieve. I contend that authorities must want to purposefully inspire and incentivise local business owners who are already at a disadvantage from the outset to create local and indigenous content.

In a similar spirit, Omobayo Azeez, lead executive at PIAFO and editor of Business Metrics Nigeria, claimed that the telecoms industry has unquestionably evolved into a crucial economic facilitator for the nation and its citizens.

Despite this admirable trend, according to Azeez, the industry remains mostly dependent on foreign inputs, which at the conclusion of each operational year result in capital outflows of $2.16 billion, further hurting the already fragile economy.

Operators will have to cope with the bother of acquiring foreign currency as one of the key challenges when they are forced to rely completely on foreign skills, solutions, equipment, and accessories. As a result, operators suffer, customers suffer, and even our beloved Naira suffers as it keeps losing value, he said.

He said that the federal government has acknowledged the need to reverse this trend, which is why this policy was developed. He said that now that the policy is in place, the job has just just began since a policy's actual success is determined by how well it is implemented.

Azeez, however, urged decision-makers to implement policies like the National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector so that they can materialize and provide all-encompassing advantages for people, companies, and the economy.