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Telecoms operators putting pressure on foreign exchange – NOTAP

By on December 3, 2014

Telecommunications operators have been putting enormous pressure on the nation’s foreign exchange as they seek approvals to acquire foreign software to drive their networks, Director General of the National Office for Technology Acquisition and Promotion, Dr. Umar Bindr, has said.

Bindr, who said this at a press briefing in Abuja on Friday, disclosed that in the last12 months, the operators had obtained approvals to spend about N20bn on foreign technology agreements sought by them.

NOTAP regulates the importation of foreign technologies by entities operating in the country. It is also supposed to oversee such technologies so that in the end, they can be domesticated in the country.

When such approvals are given, the operators go to the Central Bank of Nigeria to get foreign exchange and the expenditure on such technologies is tax-free because it is regarded as operational expenses.

Telecoms operators are listed in CBN’s data among the heavy users of foreign exchange. Because of such heavy use of foreign exchange, it is often suspected that the operators see technology transfer agreements as avenues to repatriate funds to their home countries.

The CBN recently devalued the naira because of depleting foreign reserves occasioned by high demand for foreign exchange and low receipts caused by declining oil prices.

Bindr said the agency had decided to open discussion on the subject with telecoms operators in a summit it plans to host in Lagos on Wednesday.

Apart from the operators and NOTAP, other regulatory agencies who have to do with telecommunications operators will also be meeting at the roundtable. These include CBN, the Nigerian Communications Commission and the Federal Inland Revenue Service.

He said, “I am not happy to report that nearly all the technologies required to run this thriving industry are imported. The agreements and software are getting more sophisticated. We have seen a rapid rise in technological requirements.

“The frequency is so high that we are holding meetings with communications companies on a daily basis. So, we have to call them together so that we can have a round-table meeting in order to understand each other.

“Nigeria cannot continue to source the software required for this industry from abroad. We are therefore challenging the local software industry and our research institutes to work on the requirements of the industry.”

Bindr said the meeting was expected to increase the capacity of NOTAP to approve the technology agreement applications of telecoms companies.

He said the requisite knowledge for the proper regulation was not there at the beginning because the industry was hardly existent until the advent of GSM operators.

According to the NOTAP boss, technology agreements with foreign entities are regulated on three bases – conformity with the laws of the land; pricing; and test of reliability of the technology in question.