Local Equipment Suppliers Should be Encouraged – Okafor

Edwin Okafor is managing director of Adimo Electronics Limited – suppliers of telecommunication equipment.

A consummate entrepreneur with skills in electrical and telecom installations and networking engineering, Okafor decried low-patronage of indigenous firms in the thriving telecom business in Nigeria. He spoke to funmi ilesanmi.

What is Adimo?
We are into sale of networking equipment. We sell fibre optic cables and other equipment. We give private telecom operators the needed fibre backbone support.

The whole world is going fibre and Nigerians now enjoy telecommunication services. A lot of people now have internet in their homes and a lot of new things are happening.

With competition, tariffs are coming down and people also have easy access to internet services. A lot of private operators are investing in communications and it is no longer a mono-industry as it was in the days of Nitel.

You can see private operators giving internet access to people on their phones and they can browse the internet anytime, anywhere unlike before when we go to business centres to browse.

So the business is booming with our population advantage and thus, Nigeria can compete in the global telecom space.

Ghana had telecommunication services before Nigeria but we have surpassed Ghana by all standards. Nigeria’s telecommunications market is even growing at a faster pace than South Africa’s’ and by this we can compete globally because the business is here.

Adimo operates from two locations – Port Harcourt and Lagos; we are making plans to open a third office in Abuja.

Fibre to Home
Fibre to home is good but we do not have good roads here in Nigeria and if you must lay fibre, you lay it along the road side or make a path for it.

There is what the Lagos State Government calls Right-of-Way (RoW) and you must get this approval before you can lay fibre. In Ikoyi and Victoria Island, many people are connecting fibre to home because there is a laid down path where fibre can be laid but you cannot compare Victoria Island to Ajangbadi in case you want to lay fibre to home.

They might want to construct a new road and definitely the fibre must be pulled out. For example, the road construction from Orile to Mile 2; when the road was being constructed, all the fibres on the road were pulled out.

The Lagos State Government has created a link where these fibres will be channeled when constructing new roads.

The government created a very good channel for fibre on the newly constructed Bode Thomas road with very good manholes.

That is the way it is done in developed countries. They give space for fibre to home in case other communications links need to come in.

Challenges
The challenges are enormous. One is getting right of way to lay cables.

Secondly, some operators we supply fibre cables and other equipment delay in making payments. After supplying these operators with equipment, it takes them about one and half year to make payments.

They keep telling you that there is no cash flow but the banks do not want to hear that, the interest rate keeps running.

There was a time they wanted to pass a bill between the supplier and the buyer because they will give you an LPO that they will pay in 30 days.

This means that when you supply the equipment, you will be paid in 30 days but they do not meet up with this payment plan.

After supplying the equipment, it takes one and half ears for payment to be made.

That is our major challenge in terms of payment.
When you go to them for your money, they tell you no cash flow but the bank is not interest in that, your interest rate is running.

Private operators need to help us by maintaining the 30 days payment plan.

Another challenge is that indigenous companies seldom get jobs directly. Nigerians prefer colour-skinned people (that is, white men) to their country men.

 Subsequently, jobs are preferentially  given to Indians, Lebanese and other foreign companies.

For example, I saw a Chinese man slicing at Mile 2 but this is the kind of work our people should do.

We need to encourage our people not foreigners.

This makes our people lazy. After the jobs are given to them, they in turn come to us for one thing or the other and at the end of the day when you check the profit margin; it is nothing to write home about.

Again, if we travel abroad to their countries they cannot give you such jobs to do in their countries but they can do that here in Nigeria. This is unfair.

The government needs to encourage us; private operators also need to encourage us. In a networking business like ours, it is no hide and seek game.
 
Before these jobs are given to foreigners, verification need be done to ensure there are no indigenous companies with capacity.

 You bring a calibrated paper, you bring a certificate of the equipment you use and if it is certified, the job should be given to indigenous companies.

Immediately the job is done, a series of test should also be carried out to determine if the job was well done. For example, if you slice a cable and it gives you high DB loss, there is no way you can manage it.

Definitely, you must know what gave you that high DB loss.

There is nothing like our people do not know the job. Telecommunications has been in Nigeria for a while and does it mean that for this number of years we have not trained someone who can slice cable?

Does it mean that for more than 10 years we did not train people who can do the job locally? That means we do not know what we are doing.

The banks are also not helping matters; the interest rate is on the high side.

 To borrow money from Nigerian banks is as if you want to pluck the moustache of a live lion and this is causing us setbacks.

Before we started doing business in Nigeria we went to so many banks to help us but none of them agreed.

We were only able to get financial support from abroad and their interest rate is low compared to that of Nigerian banks.

Future of Telecommunication Equipment Supplies
That the 2010 World Cup and London 2012 Olympic Games were watched on the internet was the work of fibre optic cables and its high configuration switches. The whole world is going fibre now and it is being done fibre to home.

It is an emerging technology in Nigeria, many companies do not know about it, only multinationals know about it but a time will come when everyone will know about it.

There was a time when only Nitel lines were in use, nobody knew everyone would later carry about three phones.

Then some digital lines were bought for as high as N120,000, some analogue lines N60,000 while the 090 which was a mobile line was about N40,000 but this new technology is just unfolding, many people need to be enlightened to know that this is real.

Manpower Development
We outsource training of our engineers.

Young people troop in here daily in search of jobs, I encourage them and direct them to our training partners and if they excel at the training, both the technical aspect and the theoretical aspects, we can easily employ them.

There is what we call ‘contract staff,’ after the training we employ them as contract staff and if there is work to be done, we engage them.

We have both permanent and contract staff.

We make sure our contract staff do not stay idle. When we do not have jobs sometimes, we tell them to assist some other people who have jobs to be done.

There is no employment out there and young people want to work because the universities graduate thousands of students yearly.

Government and Patronage of Local Enterprise
Government should mandate these foreign companies to employ our people. For example, at first it could be 50 per cent indigenes to 50 percent foreigners but these foreigners when they work for the first six months, remove 20 per cent of them and fix 20 of our people.

When they work for one year, remove five percent of the foreigners and add your own people. That way our people can be gainfully employed.

That is a high diplomacy of how to go about it. But these foreigners after agreeing to this term employ 50 percent of our people but after the first month, these people are laid off and replaced with foreigners citing reasons of non performance.

How can a Chinese man slice cables when our people can do this.

The money is not coming from the foreigners, it is our money but this money is going to foreigners. We need to benefit from the money because it is our money.