Telephone and power generator imports cost rises cos Nigeria lacks local input
By Jeph Ajobaju, Chief Copy Editor
Nigeria spent $3.47 billion on the importation of telephone handsets, power generators, electrical transformers, and a host of other electrical equipment in 2022, as gleaned from International Trade Centre (ITC) data.
ITC gets its Nigerian data from the National Bureau of Statistics (NBS) and the United Nations COMTRADE.
ITC, a multilateral agency which has a joint mandate with the World Trade Organisation (WTO) and the United Nations, disclosed Nigeria’s electrical import bill grew 11.90 per cent from $3.09 billion in 2022.
In the past three years, it added, the country has spent $10.26 billion importing electrical equipment amid falling foreign exchange (forex) reserves.
Imports under the electrical machinery and equipment category on the ITC portal include, but are not limited to,
- Electric motors and generators, electric generating sets, electrical transformers, vacuum cleaners, electric shavers, hair clippers.
- Telephone sets such as smartphones, facsimile machines for line telephony, teleprinters, and parts of telephone sets.
Phone imports cost $773.56 million in 2022, a 0.17 per cent rise year-on-year (YoY) from $772.25 in 2021, according to reporting by The PUNCH.
Electric motors worth $468.65 million and electrical transformers worth $357.36 million were also imported in 2022.
The three products constituted 46.06 per cent of total electrical equipment importation in 2022, coming mostly from China, India, Germany, Türkiye, Sweden, United States of America, United Kingdom, Austria, Italy, Vietnam, and France.
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Lack of local content
Nigeria does not manufacture telephone handsets and most telecommunication equipment, despite the liberalisation of its telecom sector more than two decades ago in 2001, The PUNCH adds.
The Nigerian Communications Commission (NCC) confirmed about 63 million technology devices are sold locally every year, with the phone market dominated by foreign players like Tecno, Samsung, Apple, and Itel.
Despite having the seventh-highest number of phones in the world, buoyed by its large mobile subscribers, according to the World Population Review, Nigeria’s local phone manufacturing industry is non-existent.
“Nigeria’s smartphone market declined 32.1 per cent YoY in Q4 2022 due to sustained high inflation and a shortage of U.S. dollars in the country,” the IDC said recently.
Ajibola Olude, Association of Telecommunications Companies of Nigeria (ATCON) Chief Operating Officer, listed the obstacles to local phone manufacturing to include poor electricity supply, a lack of regulatory enforcement, disdain for local content, and a lack of technical know-how.
“The implications of this are many,” said Olalekan Aworinde, Associate Professor of economics at Pan Atlantic University.
“For instance, foreign exchange management; all those goods were paid for in dollars.”