How Some Nigerians Scare Away Foreign Investors By Richard Ndubuisi - THE DAILY CRUCIBLE

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Wednesday, May 22, 2019

How Some Nigerians Scare Away Foreign Investors By Richard Ndubuisi


I worked in the Nigerian  mobile telecommunications industry from inception in 2001 to 2017 (after a 10-year stint in the same industry in Europe) and so I’m reasonably informed about the successes and the challenges the operators have faced over the past two decades or so. The successes are all too clear to see, but the challenges, multi-faceted, sometimes even ludicrous, are often dismissed or downplayed. Traveling in some South East states last weekend, I came face-to-face with one of these challenges hence my decision to share experiences that tend to parody the Federal Government's intentions with the Ease of Doing Business Policy.

As we made our way through the bad road network, I came across road blocks mounted by young men, who literally waylay drivers seeking alternative routes. It works like this: if you want to bypass the bad major roads through our community, then you must pay a levy. So, the boys gather on both sides, emplace a barricade which is then lifted upon collection of the levy! In many cases, this is like a job for the boys. That is probably what most of them do for a living. 

In 2006, our customers in a certain part of Lagos Island were groaning under poor connectivity. The reason was that our base station located in that part of town had been seized by Area Boys. In their weed-induced wisdom, they decided that the “tax” we paid each time we fueled our generators was no longer enough for them. They demanded a bigger “tax” and when we resisted, they refused to allow us entry to the site for maintenance and refueling until it went down hence the network problem in the area. It took a visit to the Oba of Lagos to resolve the matter. Tough man, he put a call across to someone and the boys vacated the site.

Somewhere in Osun State, we had to apply the Jesus Christ model, where, like the apostles, we shook the sand off our sandals and left wherever we were not welcome. At one of our hub sites, our generator was stolen 10 times! It appeared they knew it was a hub site or BSC (Base Station Controller), which controlled over 50 other sites. So, we were compelled to replace the Diesel generators each time they stole it. They came armed with guns and cranes! 

In another site somewhere in Imo State, the security man, a local, who was looking after a base station, was killed by thieves who came to steal the inverter batteries. It was a very sad experience. The traditional ruler of the community, poor guy, who was seeking a sponsorship for his cultural festival had to forgo his request out of sheer embarrassment. Graciously, he still helped us with the Police to resolve the matter.

In the very early days, there was a story of a community in the riverine areas that demanded a cow, a goat, a million Naira and other items purportedly needed to make sacrifices to the gods. This was because, according to them, the telecommunications equipment had some evil spirits that affected pregnant women! Ludicrous! In one instance, the equipment was thrown into the ocean by restive youths.

We have seen several cases, where landlords after signing tenancy agreements, reneged on them and shut down our sites having led us to build them. Of course, it’s earlier to build the sites than to decommission them; so in most cases our hands are tied! The same applies to shops and offices, where They do not belong to us.

We have lived with these constant disruptions including the more devastating issue of fiber cuts. Every now and then, we experience cuts to our Fiber Optic network. Some are accidental, mostly caused by road construction projects, while most are clear cases of sabotage by criminals and restive youth. Each time there’s a cut on the RING, it affects call and data traffic resulting in loss of network availability and loss of revenue-and an attendant loss of reputation by us, the operators. As I write, we are currently sitting on over 200 fiber cuts, and but for the redundancies we build into the network, we would be finished. 

Then, there is the other matter of multiple and unreasonable taxation and regulation. Every tier of government wants to make money off the telecommunications operators. There are also several agencies across the three tiers asking for money, in some cases, for the same things. Take for example, waivers granted by some state governments back in 2001-2005 were suddenly and mindlessly revoked by some governors. In Imo State, Gov. Okorocha revoked the waivers granted all the telecommunications operators, slammed fines of over a billion Naira on each and even added ludicrous levies like one for the Fumigation of Base Stations! Thank God the courts were helpful in putting the Governor and his agents on a leash.

These litany of woes are peculiar to Nigeria, where none of telecommunications components are made. In actual fact, the same companies which build our equipment also build for companies in the Uk, the US, Germany, France and other countries in the more civilized world. So, when you waive. Your policy on ease of doing business at a prospective investor, he might jump at it, but the reality is nothing to write home about. Some investors cannot understand when you start discussing fiber cuts, Area Boys, Multiple Taxation and Multiple Regulation.

You can imagine what the situation is with our operations in the North East with the insurgency going on there. Many sites have been destroyed and many workers have been killed, even as recently as last week. It’s not taken for granted that sites come up and go down in those areas, because the insurgents believe that with telecommunications their activities can be curtailed. So, we have become victims of circumstances. 

Recently, staff of one of the telcos got to work in Port Harcourt and found that the entrances to their office have been cordoned of with palm fronds, which traditionally signify DO NOT ENTER. The youths who did the job want to negotiate how many senior and junior positions the company would allocate to people from their community and how many CSR projects they plan to execute in their hometown. As an organization, this company has well-known and well-established CSR projects and policies, which cover the entire country, in one form or another. Yet...!

The industry is literally at its wits end on these issues. It is not so in other climes. No, it is not. I recall about 10 years ago, one of my bosses from Kuwait wondered why we had over 15,000 sim-swaps monthly whereas in Kuwait, the count was below a dozen. I stammered through my explanation thoroughly embarrassed that so many phones are stolen or lost in my country warranting so many sim-swaps!

The wahala is truly too much and mostly unnecessary, and things have got to change. First, there is an urgent  for some re-orientation for the people. There is an entitlement mentality that has suddenly taken over the hearts and minds of many. Investments bring about development and so we must expect investors to dispense personal favors before they are allowed to do business. 

Richard Branson it was who pulled out of the Virgin Nigeria deal because persons negotiating on behalf of Nigeria were asking for Complimentary Flight Tickets for themselves and their friends and family in perpetuity. Imagine that! Ditto the youths who shut down facilities when their unreasonable demands are not met by corporate organization doing legitimate businesses. Most of these organizations executive well-known CSR projects which benefit the local communities in addition to employing local skills and the attendant economies of scale.

Secondly, the National Assembly should expeditiously harmonize the agencies that regulate the telecommunications sector. Multiple Regulation is a much a disincentive as  Multiple Taxation. The Nigerian Communications Commission (NCC) has been fighting this cause diligently with not much to show for it as the States and Federal Government agencies are still bumping into each other in the quest to make money off the industry. This has got to stop.

Thirdly, there has been a strident call by telecommunications operators for the Federal Government to declare their infrastructure as Critical National Infrastructure (CNI) to criminalize the vandalization of equipment and protect them for malicious damages. Hopefully, this will be closed soon. 

Finally, the rising spate of insurgency and kidnapping must be curtailed because a safe and friendly environment is sine qua non for investment and national development. We cannot be different or rather pretentious about and indifferent to the challenges that bedevil the quest for economic development.

Ndubuisi, a former employee of one of the telcos, writes from Lagos. The article was initially titled: How To scare away foreign investors Or The Fallacy of Ease of Doing Business in Nigeria and published elsewhere.

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