Developing potential for hardware manufacturing
By STANLEY OPARA and IME ITUEN
While many developing nations have been able to key into the ICT revolution and have assumed manufacturer status in the hardware sub-sector, Nigeria remains just a consumer. STANLEY OPARA and IME ITUEN examine why Nigeria has been unable to tap into the emerging opportunities Nigeria imports virtually 100 per cent of all its ICT equipment, and dozens of firms are involved in the supply and maintenance of imported equipment. There are however problems associated with poor vendor performance and the high cost of computing equipment.
As the need to ascertain the level of innovation and competence in ICT is key to seeing the future economic and social development of the country through the ICT revolution, contributions from the hardware sub-sector cannot be underestimated.
The changes the digital revolution have brought are not limited to one single strata of the entire ICT framework, and the changes have been faster, deeper and more sweeping than anyone could have imagined two or three decades ago.
The IT and telecommunications sector in Nigeria, no doubt, have produced a number of significant improvements in the quality of lot, which had over the years remained a subject of discourse in the global arena.
Amid the huge level of digital progress, a self sustaining hardware sub-sector had remained a mirage because the best most players in Nigeria could do is to come in as mere assemblers (with almost 100 per cent non-manufacturing potential).
Could it be that the country lacks manpower with the required expertise to drive creativity; or that it is of an economic advantage to import other than produce locally; or that environmental factors are seriously militating against possible advancements as regards locally sustainable hard-ware sub-sector?
According to the Managing Director/Chief Executive Officer, Veda Technology Limited, Mr. Bode Pedro, the hardware industry in Nigeria has fared well considering the prevailing environmental circumstances.
The personal computer market, which is a significant component of the hardware division, he said, is expected to grow by more than 20 per cent annually, adding that a little above 230,000 PCs were sold in 2007 compared with more than 400,000 in 2008.
There is indeed a huge market for PCs in Nigeria though with the activities of assembling players in Nigeria show that there is still a huge dependence on the entire hardware components because local firms do not actually manufacture these components locally.
The Chief Marketing Officer, Veda Technology, Mr. Femi Olaiya also says that the PC penetration seems rather low, adding that research shows that PC market penetration in Nigeria is just about two per cent.
He noted that this was opportunity for tremendous growth and if one considers effective demand however, which has to do with the number of those who can afford PCs, and then the penetration may far exceed just two per cent.
According to Pedro, there are opportunities yet to be utilised in the PC industry, and this is demonstrated by the increasing number of people who are beginning to see technology as a critical business tool and are making efforts to equip their businesses with enough PCs to support their operations.
?Any business that does not have an email address now is not ready to compete in the world of business today. Internet service is a complimentary product. You cannot browse the web without a PC, as demand for Internet service grows, so will demand for PCs,? he said.
He noted that Nigerians are becoming Internet-savvy and that there were about five million Internet users in Nigeria as at 2006 compared with about 200,000 users in 2000. ?If one extrapolates that growth one might say there might be more than 10 million Internet users today,? he noted.
The challenge in the hardware industry, he said, was unique to the different stakeholders, and ?If you are a manufacturer, then such things as electricity, inbound and outbound logistics, and foreign exchange fluctuations amongst others come to mind. If you are an authorised partner, then the grey market and exchange rate risk may be your worry. If you are user, part of your problem will be after sales support.?
He noted that most of the problems listed above are not within the control of the industry players; such as foreign exchange fluctuations which ultimately affect the price of PCs.
While assessing the human resource development goals of the Nigerian IT policy, the National Centre for Technology Management had said that the competence development of Nigerians at various stages of education and literacy in ICT has been the pre-occupation of the Nigerian Government in order to meet up with the global digital divide challenges that ICT posed for developing nations.
According to the NCTM, ?Despite all these revolutions, Nigeria seems to be playing the role of ?user? of the finished products very many years after the technologies came into existence in other countries.?
It pointed out that various issues affect the development of technologies in Nigeria, which include capability development, infrastructure, economic considerations, adaptability, user friendliness, a shortage of ICT skilled manpower, a non-technocratic culture, relatively scarce resources for ICT investment, a low level of awareness among managers and public servants regarding ICT applications, and a reliance on technology transfer through multinationals.
Experts say the weakest link in the hardware chain is in the area of a reliable maintenance service to reduce the incidence of downtime in installations.
Even where service facilities exist, replacement parts may not be readily available. The quantity and range of spares carried are not enough, and waiting times for imported spare parts are usually very long, and the problem is aggravated by a proliferation in the different makes of imported computers - especially micros - available in the market.
With this development, the strengthening of the local hardware sub-sector remains crucial since this has the ability to quicken the supposed weakest link as well as foster a self-sustaining indigenous hardware market.