- It is high time government reviewed software licensing agreements
It is again another classic Nigerian paradox: a nation of eager, IT-savvy youths; yet one where wholesale dependence on imported software solutions in industry and commerce rules. According to Dan Azumi Ibrahim, Director-General of the National Office for Technology Acquisition and Promotion (NOTAP) – the Federal Government agency responsible for registering and monitoring all software before they are deployed – more than 99 per cent of the software packages that are used in the banking industry in the last six years are imported.
Hence his lament: “If you see the quantum amount of money that leaves this country as software licensing fees, you will shed tears. In fact, it is with pains and difficulty that we approve those agreements”.
The banking industry is however not alone. In fact, the same is true of the oil and gas industry, the information technology (IT) sector, the manufacturing sector as indeed, ministries, departments and agencies (MDAs) of governments. Today, the combined annual loss to the economy – in terms of the cost of acquisition and maintenance of foreign software – is currently put at N400 billion – up from the N200 billion that it was in 2012.
It is a story that Nigerians are only too familiar with – the never-ending paradox of a nation that does best at exporting what it does not have while importing what it has a surfeit of, or has the potential to produce locally. We recall that 10 years ago, former President Olusegun Obasanjo actually issued a directive that all MDAs must patronise local personal computer (PC) makers and software developers. Indeed, the 2006 Federal Government circular signed by the former Secretary to the Government of the Federation, Ufot Ekaette, specifically directed all MDAs to patronise made-in-Nigeria software and locally assembled computers as a priority choice of applications for all their functions. The verdict, 10 years on is that this directive is being observed in the breach.
Overall, whether it is in the oil industry where the nation currently struggles for a measly 10 percent local content after more than 50 years of oil exploration, or in the banking industry that has been in operation for more than 120 years, the story is the same, of missed opportunities to grow local pool of talent and hence a vibrant local industry.
We understand the impregnable odds faced by our local PC assemblers and software developers compared with their foreign counterparts. Where infrastructure is not lacking, they make do with virtual absence of any form of institutional support. With due respect to many of our local software developers that have proven to be world-class, we understand that a good number of them still have a long way to go, at least as far as bringing their efforts to international standards.
The truth however is that the story of technical inadequacy is not nearly half of the story of what has become a culture of preference for anything foreign and its twin – corruption which allows top executives of entities – private and public – to double as fronts to foreign software companies, to repatriate humongous amounts of foreign exchange annually under the cover of maintenance and annual licensing fees.
One immediate solution is for the Federal Government to give practical effect to the 2006 circular. Not only will the measure save humongous costs, it would certainly boost local software development efforts and ultimately, youth employment. Secondly, it seems to us that the time has come for the Federal Government to undertake a comprehensive review of software licensing agreements not only to promote skills/knowledge transfer but to discourage needless capital flight.
At this time, fresh initiatives to assist the local software developers to acquire the muscle to compete with their peers globally would clearly be worth every dime spent on it
