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E NIGERIA 2005 Prerequisites for attracting financing for ICT Projects Presentation by

E NIGERIA 2005 Prerequisites for attracting financing for ICT Projects Presentation by. Shola TAYLOR CEO, Kemilinks International 29 June 2005. Kemilinks International. Global ICT consulting firm HQ in UK, offices in Nigeria & South Africa

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E NIGERIA 2005 Prerequisites for attracting financing for ICT Projects Presentation by

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  1. E NIGERIA 2005Prerequisites for attracting financing for ICT ProjectsPresentation by Shola TAYLOR CEO, Kemilinks International 29 June 2005 E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  2. Kemilinks International • Global ICT consulting firm • HQ in UK, offices in Nigeria & South Africa • Main Activities- Consulting- Training- Investment Facilitation- Support for ICT eventsICT Africa Investment SummitAbuja 3-5 May 2005 • www.kemilinks.com E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  3. ICT Infrastructures : key to socio-economic development • Access to information and knowledge : key to socio-economic development • ICT infrastructure : necessary platform to disseminate/share information & knowledge • NEPAD programme : recognises role of infrastructures at regional, subregional and national levels • NEPAD : coordination, advocacy & facilitation • Need to focus on rural community for rapid socio-economic development E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  4. ICT development in Nigeria - the good news • Ongoing Reforms : slow but welcome development • Increasing recognition of what government must focus on : policy formulation & implementation, provide enabling environment, encourage R&D • Increased participation of private sector • Role of youths, women, civil society E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  5. ICT development in Nigeria- the challenges (I) • Inadequate Infrastructure & concentration on urban areas • Rapid technological changes : faster than policy changes & development of regualtory frameworks • Power supply • Convergence framework yet to be embraced • High bandwidth costs : Internet access still expensive • Harnessing software development potential E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  6. ICT development in Nigeria- the challenges (II) • Network Security • Capacity Building • Rural integration • High capital outlay of ICT infrastructure • Funding, Funding, Funding – the big challenge E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  7. Source: ITU World Telecommunications Indicators 2004 Nigeria $13,709 S. Africa $10,609 Morocco $5,947 Egypt $630 0 2000 4000 6000 8000 10000 12000 14000 Nigeria Egypt Morocco South Africa Cost of adding a line to network : Nigeria & Africa E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  8. Source: ITU World Telecommunications Indicators 2004 $4,878 Malaysia $3,423 Argentina $2,427 Brazil $1,950 Indonesia 0 1000 2000 3000 4000 5000 Argentina Malaysia Indonesia Brazil Cost of adding a line to network : non-Africa E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  9. ICT development in Nigeria - Opportunities • Business Outsourcing • Next Generation Networks • New regional infrastructures – regional broadband, Broadband Optical Fibre, Satellite Systems : RASCOM, NIGCOMSAT etc • Big Market E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  10. NGN Architecture International Gateway Multi-Services MPLS Core Network Legacy Networks Gateway Rural Gateway Mobile & Broadband Wireless Access Gateway Optical Fibre Broadband Passive Edge • Multi-Vendor • Multi-Service Providers • Open Standards • Open Infrastructure • Open Device Platforms • Full Service Management On Demand Access Networks Everywhere E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  11. NGN Features • Architectural Simplicity • Highly Effective in Knowledge Delivery • Cost Effective • Future Proof E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  12. Funding : global & local factors • Variety of sources : internal, foreign etc • Divergent views : priorities and funding allocation e.g. WSIS Digital Solidarity Fund • Banking sector reform • Budget process & implementation • Debt issue • Corruption • Perception E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  13. Project financing – key viability criteria (I) • Project focus : is it within national policy • Regulatory framework : guarantee of investments • Promoters : intentions, credibility, management capability • Infrastructure support • Availability of Loans • Loan Security & projected debt service coverage • Debt/Equity Ratio E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  14. Project financing – key viability criteria (II) • IRR sufficiently above cost of funds • Proof of ability to raise equity • Currency Risk • Export Orientation • Local raw materials • Local Participation • Development impact (rural) E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  15. Attracting Funding : Prerequisites • Identification of gaps : African ICT infrastructure Master Plan with due emphasis on rural areas • Clarity & Certainty of Policy & Regulatory frameworks • Strengthening of RECs : ECOWAS • Public – Private sector partnership • Stakeholder involvement • Funding Mechanisms for Universal Access E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  16. ICT Africa Investment Summit – Communique (I) • Progress by NEPAD and need for private sector to leverage • African Governments role – enabling environment (political will, private sector involvement, improve Universal Access to ICT) • Challenges : Accessibility, Connectivity, Rural Integration and Infrastructural Development E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  17. ICT Africa Investment Summit – Communique (II) • Equipment procurement largely out of Africa – foreign exchange drain • development of capacity to manufacture and maintain ICT equipments in Africa • regional ICT infrastructures promote regional integration • Mechanisms e.g. sub-regional licenses to operators. E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  18. ICT Africa Investment Summit – Communique (III) • increased investment required in ICT infrastructure and content • Financial institutions to play leading role ICT projects in Africa • Efforts to harmonize policy & regulatory frameworks at ECOWAS applauded • Need to strengthen RECs : key role in NEPAD E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  19. ICT Africa Investment Summit – Communique (IV) • Ministerial Oversight Committee • Roaming within ECOWAS • Common problems : funding, high bandwidth cost, poor attention to security of information and systems • Funding availability within Africa E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  20. ICT Africa Investment Summit – Communique (V) • African Banks should provide medium to long term funding for development of ICTs in Africa • The same protection and incentives be accorded to investment from within Africa as foreign ones • Kemilinks International should include a session on network security in the next summit. E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  21. ICT Africa Investment Summit – Communique (VI) • Underutilization of African experts • Promotion of outsourcing : job creation & foreign investment • More investment in R&D • RASCOM, NIGCOMSAT : Need to reduce space segment charges • Regular market studies by regulators E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

  22. THE END THANK YOU www.kemilinks.com E Nigeria 2005 ECOWAS Secretariat, Abuja 28-30 June 2005

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