FINANCING THE NIGERIAN ICT4D PLAN A PAPER PRESENTED BY

1. FINANCING THE NIGERIAN ICT4D PLANA PAPER PRESENTEDBY DR. VINCENT O. OLATUNJI @ eNIGERIA 2010 SUMMIT 19TH MAY, 2010

2. Introduction • Information 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.

3. 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.

4. 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

5. Outcome of WSIS Taskforce on Funding • WSIS 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: • Market Solutions Based on Creating Enabling Policy Environments • A Voluntary Digital Solidarity Fund • Mandatory Global Taxation for a Global ICT Fund

6. 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.

7. Existing Funding Options • World 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.

8. 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

9. Existing Funding Options • Non-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

10. Existing Funding Contd • The 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 $18Biilionwith $12 Billioncoming from Foreign Direct Investment while the balance of$6Billion is from within the country.

11. Nigerian Situation • despite 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

12. Global Internet Statistics

13. Internet Penetration in Nigeria

14. New Initiatives to Improve the Situation • USPF - 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.

15. New Initiatives to Improve the Situation • NITDEF • The 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.

16. 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.

17. NITDA RITCs

18. NITDA RITCs

19. 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 Duplication • Consolidation 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

20. 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)

21. Conclusion • The 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 enough • It requires collaboration and marshalling of all available resources • Government to encourage PPP and create Enabling Environment • Awareness! Awareness!! Awareness!!!

22. volatunji@nitda.gov.ngvolatunji@yahoo.com • THANK YOU