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Monday, November 19, 2018

IT stakeholders lament lopsided software contracts

  Ife Ogunfuwa

Stakeholders in the Information and Communication Technology industry have identified the role their expertise has played in the development of the nation’s economy.

The ICT experts, who are members of the Nigeria Computer Society, also recognised their failings and their impact on the growth of the industry.

While speaking at the 40th anniversary and the National Information and Technology Merits Awards of NCS in Lagos, the experts expressed optimism that intensified advocacy would address the current challenges in the industry.

The Minister of Communications, Adebayo Shittu, identified Nigerian Postal Service as one of the government agencies that technology adoption had transformed.

He said NIPOST had leveraged the power of technology to create five new companies.

He identified these new companies as NIPOST banking and insurance company; NIPOST property and development company; NIPOST transport and logistics services company; NIPOST e-government services company; and NIPOST e-commerce services company.

The minister also hinted that an ICT development bank would be unveiled in few months time, calling all stakeholders in the industry to be prepared to invest in the bank.

“Again, I want to put it on record that we are using ICT to reform NIPOST. The FG has signed an agreement between the Bureau of Public Enterprise and on the postal sector reform. In doing so, NIPOST will be witnessing the birth of five new companies, all of which are driven by ICT technology. Our ICT professionals will be the major beneficiaries of these companies,” Shittu said.

He added, “Within the next few months, we will be witnessing the establishment of an ICT development bank. We will at the appropriate time, invite various stakeholders to invest in this bank which I believe must be taken by ICT stakeholders.”

The President, Nigeria Computer Society, Prof Adesola Aderounmu, in his welcome address, expressed confidence that the ICT industry would continue to witness tremendous growth in collaboration with the government and stakeholders in the industry.

According to him, the society will continue to play a crucial role in driving Nigeria to attain full digital inclusion and development and ultimately a digital economy and governance.

“We can see that NCS has been the driving catalyst behind the incredible and accelerated expansion of the IT development and deployment in Nigeria. Some of the landmark achievements attained by the NCS over the years include promulgation of IT and ICT enabling laws by the Federal Government for the development and growth of ICT in Nigeria; were facilitated by the relentless advocacy efforts on the NCS.”

The Founder and Executive Vice-Chairman, Computer Warehouse Group, Austin Okere, in his welcome address, said the IT experts had failed in advocating for policies that would protect the interest of their members.

He said that most international Original Equipment Manufacturers were cheating their local partners of their earnings through lopsided software licensing agreements.

According to him, local software companies bear foreign exchange risks and pay taxes on behalf of their international partners, thereby affecting business sustainability.

“For instance, if we look at advocacy, what is the biting problem of the members of NCS?  Many of them are not thriving because there is lopsidedness in the relationship between the local companies and International OEMs. Because in Kenya, they accept Kenyan Shillings and the local companies are not bearing exchange risks,” the CWG boss said.

“But in Nigeria, they insist on accepting dollars no matter what happens with the dollars. At the end of the day, it is not likely the organisation will survive because only one of the businesses is bearing the risk.  If the sharing of earnings in the business agreement is 50:50; you bear 50 per cent of the exchange rate risk and they bear the remaining 50 per cent of the risk.”

Okere added, “If it is 80:20, the international OEM takes 80 per cent of the exchange risk and I take 20 per cent exchange risk.  But that is not what is happening. The local company takes full exchange risk.  The constitution of Nigeria says any business in Nigeria and making profit from here is meant to pay tax. But the international company coerce the local company to bear their own portion of the tax.”

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