Minister lists hurdles to ICT growth

THE Minister of Communications Technology, Mrs. Omobola Johnson, has identified multiple taxation, inadequate infrastructure and vandalism as major challenges impeding the full growth and development of the Nigerian Information Communications Technology (ICT) sector.
  Johnson noted that Lagos, Anambra, Ondo and Yobe states have agreed to work with the ministry to remove all the bottlenecks in rolling out ICT infrastructure to enable them have better broadband and better voice services in their states.
  Speaking at the World Economic Forum on Africa 2014 SME Summit yesterday in Abuja, the minister noted that the states have agreed to reduce the taxes on infrastructure, ensure that the base stations are protected, reduce the cost of Right of Way to lay fiber.
  He added that they have also agreed to ensure the protection of the fibers while the telecommunications companies have said that if the following measures are taken by state governments, they would increase investments in the states to ensure that they get better broadband and voice connectivity.
  She observed that this development would help the telecommunications companies roll out infrastructure in a more sustainable and quicker manner, adding that the ministry is hoping to enroll all the 36 states but will start with a few states.
  Mrs. Johnson pointed out that one of the biggest mechanisms for job creation, sustainable growth and inclusiveness is to support the growth and development of SMEs and also looking at how we can leverage ICT to increase the growth and productivity of SMEs.
  “There have been complaints by SMEs about the cost of access to the Internet and also availability of the Internet. One of the constraints to actually rolling the infrastructure is multiple taxation imposed on telecoms companies.
  “State governments should work with us so that we don’t tax the investment and its input, which is why you are building the infrastructure. Let us tax the outcome, which is when you are taxing companies that are leveraging using this broadband in developing businesses; tax those businesses instead of investment at the point of input because taxing the investment does not help the development of infrastructure as quickly as possible.
  “That is why we have the poor quality of service and accessibility of the Internet issues. If we eliminate illegal multiple taxation, Internet access would be provided at a lower rate. Every cost that is imposed on this telecoms companies is transferred to consumers,” she added.
  She observed that the ongoing WEF would help the ministry address the right issues to ensure that SMEs use ICT to develop their businesses, adding that if we eliminate the multiple taxes, it will reduce the cost of access to the Internet.
  The minister noted that the Federal Government is doing a lot to grow the capacity of SMEs and also build a robust ICT sector that can support SMEs and others, adding that government is already developing software in local languages to help people in the rural areas who do not understand English Language.
“Last year, there was a commitment by the industry to invest $6 billion in addition to the $30 billion already invested in infrastructure. The money is available in the industry but it will not make any impact if about 70 per cent of the money is paid to different levels of governments as tax.”
  Also speaking, Co-Chair, World Economic Forum on Africa 2014 and Founder of Harti Enterprises, Mr. Sunil Brharti Mittal, said for SMEs to flourish, access to capital must be made easier and starting capital must be accessible.
  He observed that technology has helped in developing SMEs, stressing that IT must be used as a tool to drive SMEs. People no longer need to buy expensive packages.
  He said: “We need a robust environment for telecoms companies to thrive. We need to roll out more 3G technologies and move to 4G. In India, there are fantastic solutions that would bring in about two million solutions into Nigeria and other African countries. Providing access to Internet connectivity requires huge infrastructure.
  “ICT is not only important to SMEs but is a key driver of businesses. Access to ICT needs to increase in the Sub-Saharan Africa. The development of ICT is slow; in Nigeria, ICT has continued to grow fast but the impact is low. We need to measure impact, mitigate risks.”

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