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DR. VINCENT O. OLATUNJI
@eNIGERIA 2010 SUMMIT
19TH MAY, 2010
FINANCING THE NIGERIAN ICT4D PLAN
A PAPER PRESENTEDBY
IntroductionInformation and Communication Technologies
(ICT) has now become a veritable tool of achieving sustainable socio-economic development.
It is currently being used in driving major development agenda at the international, regional and national levels e.g. MDGs, NEPAD, etc
It is therefore very relevant in achieving Nigeria’s Vision 20-2020The Nigerian ICT4D Plan has set the agenda for using ICT to achieve sustainable socio-economic development in Nigeria.
Funding as a challenge for ICT
A major issue in implementing the plan and effective deployment of ICT in Nigeria is funding.
Regular budgetary allocation from government is not adequate due to other needs to be met e.g. Infrastructures, HealthCare, Education, Housing, etc
Therefore there is the need to examine various funding options that can assist in mainstreaming ICT in critical sectors of the economy in order for Nigeria to be part of the world new economy driven by information technology.
Global Approach/Options to Funding ICT4D
Despite the fact that global interest in the goals of ICT4D is the use of ICTs to enable the MDGs and create an all inclusive Information Society, financing ICT4D has been recognized as a major issues financing ICT
This is due to a range of factors and risks which include the fact that programmes and projects/Skills in the ICT sector are capital intensive, Awareness on the part of decision makers, Choice of Technologies, etc especially in developing countries
Accordingly, various models, options and ideas are coming up in order to create an all inclusive information society
Outcome of WSIS Taskforce on FundingWSIS Geneva 2003 adopted Plan of Action
requested the Secretary General of the United Nations to create a Task Force to study the issue of financial mechanisms for ICT4D and present a report to facilitate discussions in the second phase of WSIS. The Result revealed with three issues for discussion:
i.Market Solutions Based on Creating Enabling Policy Environments
ii.A Voluntary Digital Solidarity Fund iii.Mandatory Global Taxation for a Global
ICT Fund
Outcome
ICT4D to be Funded as a public good- Where existing mechanisms are not being fully exploited, greater coordination is needed to align sources of finance with enabling policy environments.
- Where existing financial mechanisms are unable to go beyond the borders of the market, then new sources of finance should be mobilised, domestic and international public finance should be utilised and innovative policy models for bridging the digital divide should be created.
The need for licensing Non-Profit Network Operators (NPNO) to offer services to small businesses and consumers in rural and underserved areas.
Existing Funding OptionsWorld Bank (www.worldbank.org) Provided
about $3 billion for funding ICT initiatives in over 80 countries in the last 5 years. Supported the Nigerian ICT4D plan.
International Finance Corporation (IFC) (www.ifc.org) By the end of 2007 IFC has committed a total of about $1.4 billion on ICT programmes
Global Partnership for Output-Based Aid (GPOBA) (www.gpoba.org/index.asp) spent about $8.9 million in various countries
infoDev (www.infodev.org) about $10 million is disbursed annauly mostly for commissioning studies, research and pilots.
Existing Funding Options
African Development Bank (www.afdb.org) e.g. Connect Africa Initiative is a global partnership launched in October 2007 to mobilize the human, financial, and technical resources needed to bridge major gaps in ICT infrastructure across the continent.
A total of $55 billion has so far been pledged for the development of infrastructure and services necessary to achieve both the ICT-related MDGs and the World Summit on Information Society Action Plan
Existing Funding OptionsNon-Government & Philanthropic Sources:
-Digital Solidarity Fund (DSF): (www.dsf-fsn.org) funded through“1% digital solidarity principle”.
-Bill & Melinda Gates Foundation: (www.gatesfoundation.org)
- One Lap-Top per Child (OLPC) initiative
Existing Funding ContdThe Private Sector- ICT initiatives and development in most
countries of the world have been mostly driven by Private Sector
- Studies have also shown that effective ICT services are more provided by the private sector rather than government e.g. the telecom sector in Nigeria with over 65 million Lines now from less than 400,000 beffore deregulation. Investment in the sector is now about $18Biilion with $12 Billion coming from Foreign Direct Investment while the balance of $6Billion is from within the country.
Nigerian Situationdespite well thought out policies and the
establishment of relevant agencies to implement the policies, the impact and level of information technology development in Nigeria has been very slow due to inadequate funding
This scenario is very common among Africa and other developing countries where other daunting challenges of providing basic facilities contend with the normal budgetary provisions
This further widens the Digital Divide as evident in the fig 1
Global Internet Statistics
Internet Penetration in Nigeria
YEAR USER POPULATION %
2000 200,000 142,895,600 0.1
2006 5,000,000 149,229,090 3.1
2009
Source
11,000,000
(ITU)
159,404,137 7.4
New Initiatives to Improve the SituationUSPF
- It is a special fund as stated in the 2003 Telecommunication Act. The aim is to provide telecommunications and ICT services to unserved, underserved and deprived groups and communities in the Nigeria.
- About 474 schools spread across the six geopolitical zones of the country with complete set of Internet tools and facilities while other projects are also in the pipeline.
New Initiatives to Improve the Situation
NITDEFThe NITDA act as signed into law in
2007empowers a levy of 1% to be charged on the profit before tax of companies and enterprises with an annual turnover of N100 million and above The businesses covered in the act for the levy are as follows:
- GSM service providers and all Telecommunication Companies.
-Cyber Companies and internet providers.-Pension Managers and pension related
companies.-Banks and other financial Institutions and
Insurance companies.
New Initiatives to Improve the Situation
-Within about two years of collection, over $1.5Billion have been committed to various ICT projects in terms of feasibility studies and infrastructure provision.
- Others initiatives include Galaxy Backbone and Nigcomsat . Government companies already providing ICT infrastructures.
NITDA RITCs
YEAR NO OF RITCs2007 (BUDGET) 10
2008 (BUDGET) 17
2009 (BUDGET) 11
2009 (NITDEF) 47
TOTAL 85
NITDA RITCs
How Do We Fund the Nigerian ICT4D?
Now, ICT is too important to be ignored!Appropriate Costing of projects and
programmes for consistent implementation according to the timelines
Appropriate Technologies, Avoid DuplicationConsolidation of Existing Funding Organs
(NITDEF, USPF, etc)Better Budgetary Allocation. About 10% of
each MDA’s Annual Budget to be devoted for implementing relevant areas of the Nigerian ICT4 Plan
Appropriate Budgeting
How Do We Fund the Nigerian ICT4D?Form Strategic Partnership with Development
Partners to increase investment , Technology Transfer, etc (the Nigerian ICT4D was partly funded in this manner)
Preparation of well crafted proposals (Build Capacity)
Create Enabling Environment of attract FDI (policies, regulations, tax incentives, etc)
Public Private Partnership (Funding in rural Vs Urban Areas
Consider regional funding mechanisms (Use Leverage on existing Infrastructures (e.g. SAT 3)
Avoid Duplication (Collaborate, Proper co-ordination)
ConclusionThe Nigerian ICT4D plan have been developed
to serve as the engine room of sustainable development in Nigeria.
If well implemented, could position Nigeria as a key player in the global information society
Can assist in achieving our national vision 20-2020
No single funding option is enoughIt requires collaboration and marshalling of all
available resourcesGovernment to encourage PPP and create
Enabling EnvironmentAwareness! Awareness!! Awareness!!!
