Foreign Software Domination Costs Nigeria N400bn | Independent Newspapers Limited
Newsletter subscribe


Foreign Software Domination Costs Nigeria N400bn

Posted: May 17, 2016 at 6:18 am   /   by   /   comments (0)


Emmanuel Okwuke



It has been estimated that annual losses to the Nigerian economy due to firms and organisations patronising imported software may have grown from N200 billion in 2012 to over N400 billion, Independent has gathered.

The estimated amount covers the acquisition and maintenance of foreign software used in both public and private sectors of the economy.

This software is used in banks, oil and gas industry, information technology (IT), manufacturing sector and ministries, departments and agencies (MDAs) of governments.

Because of the huge capital outflow and loss of business by indigenous software developers, stakeholders have called on the government to support local developers by either legislation or full patronage.

All foreign software used in these sectors of the economy are registered with the National Office for Technology Acquisition and Promotions (NOTAP), the federal agency responsible for registering and monitoring all software before they are deployed. These foreign software applications are very expensive to purchase and come with annual maintenance fees.

The banking industry is a major user of foreign software as all commercial and microfinance lenders have foreign banking applications running their end of day (EoD) operations and other systems.

Majority of these banking software applications come from India and Europe. The situation is even made worse as most banks in Nigeria avoid locally made software, which is equally competitive, like a plague.

Mindful of the need to promote local personal computers (PCs) assembly and software developers, the former President Olusegun Obasanjo administration issued a directive that all MDAs must patronise local PC makers and software developers.

He insisted that they must consider foreign brands only when local brands could not meet up with their requirements.

Consequently, in 2006 a government circular signed by the former Secretary to the Government of the Federation, Ufot Ekaette, directed all federal MDAs to patronise made in Nigeria software and locally assembled computers as a priority choice of applications for all their functions.

However, Independent investigations reveal that MDAs have flouted this directive and embraced foreign software developers and foreign made computer products and services to the detriment of their local counterparts.

Information Technology (IT) stakeholders say local software and hardware vendors need to be given more attention by government and the private sector to survive.

They believe that local vendors have good products and services that can compete in the international market with their foreign counterparts.

Mr. Pius Okigbo Jnr, President, Institute of Software Practitioners of Nigeria (ISPON), regretted that so much emphasis is placed on foreign software to the detriment of locally developed software, which has been proven to have the same international standard with imported variants.

He warned that the country risks not growing her software industry and building a sustainable local and regional market.

He said if the trend persists, Nigeria would not be able to build and develop in-country capacity and export software talent the same way Nigerian doctors were outsourced to Saudi Arabia in the 80’s.

He frowned at a situation where foreign software is preferred to locally developed software, even when they are tested to meet the same international standards.

On his part, Mr. John Obaro, the Chief Executive, SystemSpecs, whose product, Remita, is powering the Treasury Single Account (TSA), said Nigeria has the capacity to influence the global software technology landscape and reap the huge attendant benefits if the government makes a conscious effort to actualise the prosperous future that beckons the country in software technology.

Obaro said that the country should quit focusing on agrarian initiatives at the basic levels, and concentrate on the potential of software technology wherein the future lies.

According to him, this is the time for the country to seize advantage of the opportunities inherent in software technology, when oil prices are at their lowest.

He opined that the present situation in the country may be a time of divinely orchestrated providence, expected to jolt the country from oil dependency to harnessing the huge potential presented by software technology.

“While our currency is struggling and naira’s exchange rates against major currencies have almost doubled in less than a year, we still have to source enormous foreign exchange to service the huge foreign-owned software assets in use by government at all levels and across the private sector. The beneficiaries are those countries that have nurtured their software industry and caused us to be dependent on them even in critical areas of our national life.”

He wondered what the country would have benefitted if the software installed at the Office of the Accountant General of the Federation (OAGF), Federal Inland Revenue Service (FIRS), NIBSS and the Central Bank of Nigeria (CBN) and the banks are powered by indigenous software companies.

He listed benefits of patronising indigenous software by the government to include assisting the Federal Government realise its objective of providing employment to teeming talented Nigerian youths, the conservation of the huge foreign exchange currently lost when paid as annual software maintenance fees to foreign software providers and the retention of 100 percent annual maintenance fees within the Nigerian economy.

Mr. Chris Uwaje, former president of ISPON, said that oil and gas sector has failed to deliver the required value to develop the nation in the last 50 years, and so challenged the government to resort to indigenous knowledge and software and see if the economy would not stand strong using software as the mainstay of the nation’s economy.

“If we must recover lost grounds of our national development and surmount the challenges of the emerging information society, then indigenous software is the reliable answer and ultimate solution,” he emphasised.