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Nigeria is a leading market for smartphones in the world but efforts aimed at manufacturing the devices locally have been slow, TEMITAYO JAIYEOLA writes
Every year, about 63 million devices are sold in Nigeria, according to the Nigerian Communications Commission.
It is estimated that the average device owner in Nigeria changes devices every six to 18 months due to the vastness of the nation’s mobile device market.
In 2021, annual smartphone sales in Nigeria grew by 81 per cent year-on-year, according to Counterpoint Research’s Global Monthly Handset Sales Tracker.
It explained that improving economic conditions, pent-up demand, and entry of new Chinese Original Equipment Manufacturers were driving the market as well as increasing digital adoption due to the pandemic, expansion of social media, entertainment, and mobile money, and drop in data costs.
A research associate, Ravyansh Yadav said, “The average selling price of smartphones sold in Nigeria grew by nine per cent in 2021 driven by demand for devices capable of handling heavy internet use.
“Nearly 90 per cent of smartphone sales in 2021 were in the less than $200 price band, where Transsion brands Infinix, itel and Tecno captured 63 per cent share. Transsion brands are expected to maintain their price competitiveness for the foreseeable future.
The report revealed that Tecno, Samsung, and itel had captured more than half of the smartphone market in Nigeria as of 2021. It added that the demand for low-tier smartphones was expected to rise further due to accelerating digitalisation.
In an earlier interview with The PUNCH, The Managing Partner, Bodds IT Solutions, Emmanuel Osho, had said the number of devices being sold in the nation might be higher. He stated that the nation’s device market was growing larger every year.
He said, “An average person in their 20s and 30s has like two or three devices which include laptops, phones, and others. To be honest, the market could run into billions. The second-hand product is larger because of the low purchasing power of the market. Ideally, majority of the buyers of new devices are organisations.”
In 2021, the number of Nigerians that bought second-hand iPhones and Samsung rose by 10 per cent according to a report by Counterpoint Technology Market Research.
According to experts, the world is a global village that is interconnected by devices and applications. Analyst said people would try to own devices whether by purchasing it new or used. There were 15 billion mobile devices across the globe in 2021, according to Statista. Mobile devices have become essential to human civilisation as everything continues to go digital.
The World Population Review ranks Nigeria as the seventh-highest nation with the number of mobile phones in the world. With 167 million phones, Nigeria pales in comparison to China’s 1.6 billion phones, India’s 1.28 billion, Indonesia’s 386 million, United States’s 327 million, Brazil’s 284 million, and Russia’s 256 million.
Nigeria is ranked number one in Africa and is above Bangladesh’s 166 million, Pakistan’s 165 million, and Japan’s 147 million on the top 10 ranking.
According to the World Bank, Nigeria has the largest mobile market in Sub-Saharan Africa, backboned by a strong mobile broadband infrastructure and improved international connectivity. The nation’s telecommunication sector is one of its most crucial sectors.
The sector was responsible for 12.61 per cent of the nation’s Gross Domestic Product in the fourth quarter of 2021.
In May 2022, there were 302.923 million SIMs with owners and about 132 million unique devices on the nation’s telecommunication network in 2020. Yet the nation is not responsible for manufacturing any device on its telecom network.
The Nigerian mobile market is dominated by the OEMs from Asia and one would think that local players would offer some form of competition but attempts at local production of phones have always fallen face flat.
Various attempts to kick-start local production in Nigeria have best been flickers, with none becoming fire. In 2017, AfriOne announced it had opened a smartphone factory in Nigeria with an initial investment of $10m.
The factory claimed to be able to produce 120,000 – 300,000 units of phones per month; however the company is still confident that the facility will eventually produce as many as 300,000 products per month.
According to the firm, its smartphones will cost between $92 and $108. AfriOne’s Founder and Chief Executive Officer, Mr Sahih Berry, was quoted as saying, “The company has a goal to democratise technology, by offering affordable innovations through our product offerings and removing barriers deterring the large scale adoption of advanced technology in Nigeria.”
AfriOne’s phones are yet to be seen in the market.
Also, RLG, a Ghanaian company that formed a partnership with the Osun State Government in 2014 with the aim of manufacturing phones, appears to have faded into the background.
In 2021, the Ministry of Industry, Trade and Investment presented a ‘made-in’ Nigeria phone to the President, Major General Muhammadu Buhari (retd.) known as ITF mobile.
The minister, Niyi Adebayo, had said, “Twelve indigenous mobile cell phones produced by the Model Skills Training Centre of the Industrial Training Fund, an agency under the Ministry of Industry Trade and Investment, were launched.
“It gives me great pleasure Mr President, to present you with one of the phones.”
What has become of ITF mobile remains to be seen. The President, Phone and Allied Product Dealers Association of Nigeria, Ifeanyi Akubue, said, “Around July last year, the ITF mobile was manufactured and shown to the president.
“Normally, the phone should be in the market now. Also, other private companies should be exploring this, I don’t know if it is a lack of policy that is stopping them from exploring locally made phones.
“Tecno is planning to produce its phone in Nigeria before next year. Also, foreign-made phones are cheap. If local manufacturers make phones, it is likely that their products will be more expensive than the foreign ones. The government will have to intervene in a way that will allow local products to be cheaper or affordable. These are some of the problems we have. Government policy is part of the reasons why foreign-made phones are cheap.”
He stated that the government has a role to play if the nation is to become a phone manufacturer.
According to the National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector, the nation is planning to build capacity in the manufacturing of smartphones.
To achieve this, it intends to collaborate with global OEMs already engaged in the manufacturing of the equipment.
“A significant portion of expenditure in the telecom industry is on such equipment, most of which are manufactured outside the shores of the country. Furthermore, only a small percentage of the needs for telecom equipment are met by indigenous providers even though global manufacturers source raw materials from the country.”
The policy aims to stimulate the design, development, production, sales, and utilisation of high-quality telecom equipment and services developed by indigenous companies. It hopes to support local manufacturing through relevant institutions, such as the Universal Service Provision Fund and the Central Bank of Nigeria.
According to the Chief Operating Officer, Association of Telecommunications Companies of Nigeria, Ajibola Olude, poor electricity supply, lack of regulatory enforcement, disdain for local content, and a lack of technical know-how are reasons why local phone manufacturing has not caught on in the nation.
He stated, “Our power generation is very poor and in phone manufacturing, you need regular and reliable power to be able to operate. The second reason is that there has been little enforcement and regulation in that area.
“I think that is another area the NCC needs to consider that we can use to create jobs for our teeming youths. We should start encouraging the local production of phones. When you quantify the amount of money we are spending on purchasing phones, it is much.
“Lack of enforcement and regulation are responsible for continuous reliance on importation of phones. A third reason is also that Nigerians do not appreciate what they have. If you make a phone locally, Nigerians will hardly purchase it. We have what is needed to produce phones in abundance in Nigeria. But we need to do orientation for people as regards this.
“The fourth reason will be a lack of technical know-how.”
According to him, Tecno and one other phone brand are attempting to set up phone assembly plants in the nation. He added that local manufacturing would create employment, increase revenue coming into the country, and help utilise the huge deposit of phone raw materials in the nation.
The President, National Association of Telecoms Subscribers, Adeolu Ogunbanjo, said there would be a need to revisit the NCC regulation on phone manufacturing.
He said “We have the population. A lot of OEMs worldwide import so many brands into Nigeria and they are still selling. By the time the average person uses a phone for two to four years, the battery starts giving issues and there are other faults that develop, causing the user to change it. Because we have the population, the volume of this is on the high side.
“Major importers should have at least an industry in Nigeria. They can have presence in Nigeria so that cheaper phones will get produced. Even the high-end phones can also be produced in Nigeria and the impact will be positive on the consumer as the phones will be cheaper and people will be able to change their phones on a regular basis. As such, manufacturers will have to produce generation-friendly phones since they will be more abreast of where we are technologically.”
He added, “This will be very positive for the average consumer. However, the NCC will have to monitor to ensure that they comply with our technology. Already, the NCC has type approvals, and it will need to look more into it. We are mature enough to manufacture our own phones as a country.”
The expert said Nigeria could sell phones to consumers in the region considering its strategic role in West Africa.
“If we begin to manufacture our own phones in Nigeria, other Western African countries will buy from us; and phones from here will begin to dominate the region. ECOWAS nations will have no choice but to buy their phones from here. For them, buying phones from Nigeria will be cheaper than buying from other regions of the world. Also, local manufacturing of phones will enhance tele-density as more people buy phones,” Ogunbanjo said.
“It is the duty of the NCC to entice these manufacturers once it sets out a plan for local manufacturing. It will also be the regulator of the space, regulating approvals including the type of phones that can come to Nigeria. NCC should deliberately regulate the manufacturing of phones in the nation,” he noted.
According to experts, mobile phones have become very essential for delivering last-mile services in ecommerce, payment, navigation, and much more.
Phones have become an integral part of human lives and activities. Analysts believe Nigerians will always need to buy phones and, as such, there is a strong need for locally-made phones.
However, it is still uncertain how soon Nigeria can achieve this. The NCC is still expected to come up with actionable policies in this direction.
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