Regulator: Tech investment, mobile boom now fuel Nigeria financial sector

Regulator: Tech investment, mobile boom now fuel Nigeria financial sector

Regulator: Tech investment, mobile boom now fuel Nigeria financial sector

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Massive investment in information and communication technology (ICT)  and telecoms service are now boosting the financial sector in Nigeria, Professor Umar Danbatta, Executive Vice Chairman at Nigeria Communications Commission (NCC) has said.

Technology Times review of  electronic payment channels based on Nigeria Bureau of Statistics (NBS) figures reveal that  ATM transactions totalled ₦2.6 trillion in the first six months of 2016, a major boost to the Cashless Nigeria Policy expected to make more people embrace electronic payment services.

The transformation of the financial sector is being driven by the availability of telecommunications infrastructure in the country, says the NCC boos who dropped this hint at the  Nigeria Innovation Summit 2016 held in Lagos. Regulatory and technological innovations have also ushered in an era of seamless financial transactions with just a click of the button, he says.

Technology Times review of  electronic payment channels based on Nigeria Bureau of Statistics (NBS) figures reveal that  ATM transactions totalled ₦2.6 trillion in the first six months of 2016, a major boost to the Cashless Nigeria Policy expected to make more people embrace electronic payment services.

At the end of June 2016, ATM transactions in Nigeria also recorded a 26.9% increase against ₦1.9 trillion during the corresponding period of 2015.

Danbatta, who was represented at the forum by Mr Tony Ojobo, Director of Public Affairs at NCC, says the Commission walked through the path of innovation in its regulatory approach by creating the enabling environment for the provision of telecoms infrastructure in Nigeria.

Regulator: Tech investment, mobile boom now fuel Nigeria financial sector
Professor Umar Danbata, Executive Vice Chairman at NCC.

NCC has brought innovative telecommunications regulatory approach in the area of financial inclusion, he says and “telecom regulation in Nigeria has brought about far-reaching impact in the financial sector of the economy. Imagine what banks would have been like today without the Automated Teller Machine (ATM) and also what shops would have been like today without the Point of Service (POS) in a number of locations.

“It may interest some of us here who probably don’t know that every POS you have in a shopping mall or anywhere actually has a SIM card inside of it. Those POS we have today are like cell phones, they have SIM cards, they have numbers and so that is to show you how deep penetrating ICT has been in all area where people are enjoying the services today”, according to Danbatta.

The NBS document obtained by Technology Times also reveals that  point of sale (POS) payment systems also hit ₦30.4 billion while National Electronic Funds Transfer (NEFT) banking system transactions also totalled ₦76.1 billion at the end of first half of 2016.

Regulator: Tech investment, mobile boom now fuel Nigeria financial sector
Godwin Emefiele, CBN Governor

The telecoms regulatory chief underscores the impact of NCC’s innovative regulations in the Value Added Service (VAS) sector of the telecoms industry when he says that “the VAS segment of the market is estimated at $200 million per annum today and is estimated to grow in the next five years to $500 million. This segment of the market is currently under the exploration of the commission for effective licensing and regulation to optimise strength, growth and also innovation.”

The NCC boss says that “the contribution of ICT to the GDP of this country is estimated currently at 10%. Since 2001, investment attracted in the sector is well over $60 billion, direct and indirect employment has grown from systematic approaches to the promotion of market competition.”

He also says that “government has made substantial revenue through sale of frequency spectrum which is contributing to the Federation account. Reports from the National Bureau of Statistics indicate that telecoms contribution to GDP in the first quarter of 2016 amounts to N1.41 trillion. This figure rose to N1.58 trillion in the second quarter of 2016.”

While noting the importance of innovative application of ICT in other sectors of the Nigerian economy, Danbatta  says that “ICT is the enabler of other sectors. It is the infrastructure of infrastructures. Innovative application of ICT in some other sectors of the economy in Nigeria has become one of the major successful outcomes of the Nigerian telecoms industry regulation.”

Regulator: Tech investment, mobile boom now fuel Nigeria financial sector
A bank staff seen using an ATM at an exhibition showcasing banking technologies and services in Lagos

The NCC chief says that “in the Pharmaceutical industry, the authenticity of drugs is now verified through the use of mobile phones. In agriculture sector, we are all aware of the innovation where farmers are equipped with mobile phones to be able to be reached for the distribution of fertilizers and other critical infrastructures required for agriculture.

“In the movie industry,  the Commission has taken steps to collaborate with the actors and producers of movies towards better ways to distribute their contents to worldwide audience and also to improve their production capabilities through application of relevant technologies.”

He says that “telecommunication is new infrastructure of infrastructures and this means that innovative approaches are key drivers to regulatory successes and excellence. Any regulator therefore won’t restrict itself to doing the basics, dismissing the addition of valuable contributions to the socio-economic growth of the society.”

According to Danbatta, innovation holds the key to the growth of any nation’s economy as “innovative services like mobile number portability which enables the consumer to port from one network to a preferred network has put power in the hands of the consumer. The consumer has the right now to fire the service provider and go to any other network of choice using the same number.

Of course, there is a popular business concept that says that you either innovate or you die. It is possible that any telecommunications operator, who fails to apply innovative approaches in the scheme of regulated activities, may end up being knocked down by bureaucracy.”

Regulator: Tech investment, mobile boom now fuel Nigeria financial sector
Connected: A mobile phone user browsing the Internet

According to Danbatta, “as a regulator of a very dynamic sector such as ours, innovations in business are very essential components that have fully been embraced by the Commission in all our activities”, while also noting that the achievement of the Commission in the area of ICT penetration in the country since 2001 till date ”were made possible by the Commission’s innovative approach to its regulations.”

One of the outcomes has been a “phenomenon rise from 400, 000 active lines as at 2001 to 152, 000, 000 active lines today from a teledensity of 0.4% to a teledensity of 109% as at August 2016.”

With over 93 million Internet subscribers in Nigeria, he says , “the Internet has created a whole new world, an online world, what you call the digital citizens. This online world has become so unpredictably dynamic and the outcome is free communities that exist within the social media with real time interaction potentials spurred by improved telecommunication regulation and availability of smartphones.”

 

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Elizabeth Edozie Technology Journalist @Technology Times 08077671659 elizabeth.edozie@technologytimes.ng