Operators in the Information and Communication Technology, may have cause to smile soon as the Federal Government may be considering a ban on items that can be produced locally in the country. Minister of Communications, Adebayo Shittu made the remarks at an Indo Nigeria ICT summit held yesterday in Lagos.
Any company that shows verifiable evidence of interest and capacity to produce any product or even assemble them here in Nigeria, we will stop importation of such products, to encourage them.
Implications of a possible ban
Even though specific items are not mentioned, the ban could cover virtually almost every major ICT product is either made or assembled in Nigeria. Indigenous firms operating in the ICT sector could see a boost to their operations.
Zinox computers is into the assembly of computer components, ditto Omatek systems. Importers of these products would have to downsize their operations, or establish manufacturing plants in the country.
What the government should do
Banning the products only solves part of the problem, as the components to be assembled are also imported, leaving the firms at the risk of volatility in exchange rates.
Rather than place a ban on the items, the government should put in place a conducive business environment for businesses operating in the sector. Poor power supply, multiple taxation and several other factors make ICT products made in the country more expensive compared to those imported. The government can also grant the companies tax waivers, and enforce the recent executive order for Minstries, Departments and Agencies (MDAs) of government to purchase goods made in Nigeria.
The government could also decide to exclude these items from the official foreign exchange market, like the Central Ban k of Nigeria (CBN) did with palm oil. This led to bumper profits for local producers like Okomu Oil and Presco Plc.