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Banks Spend N42.7bn on Foreign Software in Two Years

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  • Banks Spend N42.7bn on Foreign Software in Two Years

Growing technological integration and the need to cut operational cost and improve the convenience of banks’ transactions has led to an increase in software investments by Nigerian banks.

A recent analysis of 10 banks’ software procurement in the last two years, showed their investments on software rose from N77.35 billion reported at the end of December 31, 2016 to N120 billion by December 31, 2018. Representing an increase of 35.5 percent.

The 10 banks surveyed were First City Monument Bank Limited, Guaranty Trust Bank Plc, Sterling Bank Plc, Zenith Bank Plc, United Bank for Africa Plc and First Bank of Nigeria Plc.

While, Wema Bank Plc, Union Bank Plc, Unity Bank Plc and Jaiz Bank Plc were the remaining four.

A break down of the banks’ annual reports showed that First Bank’s investment in software grew by 35.9 percent in the last two years to N29.36 billion, up from N18.82 billion recorded at the end of 2016 financial year.

First City Monument Bank (FCMB) spent N9.95 million on software –both developed within and acquired from outside the country — in the last two years, more than the previous total investment of N6.94 million.

United Bank for Africa Plc, one of Nigeria’s technology-driven banks, grew its software assets by 17.4 percent from N16.59 billion to N20.09 billion during the period under review.

While GTbank has invested a total of 19.8 billion in software development and procurement as of the end of 2018, representing an increase of 36 percent from N12.67 billion attained in 2016.

Sterling Bank, Wema Bank, Zenith Bank, Union Bank and Jaiz Bank’s software assets grew by 6 percent, 30.5 percent, 58.52 percent, 48.2 percent, and 18.1 percent to N4.12 billion, N4.2 billion, N28.91 billion, N12.74 billion, and N688 million, respectively.

However, Unity Bank investment in software declined from N3.22 billion two years to N80.87 million in 2018.

Earlier this year, stakeholders in the Information and Communications Technology (ICT) sector said businesses in Nigeria are spending over $400 million on foreign software renewals yearly. Suggesting that Nigerian businesses relied on foreign developers for efficient operation and security. Also, it points to the state of Nigeria’s ICT sector.

Dr Ibrahim DanAzumi, the Director-General, National Office for Technology Acquisition and Promotion, said 60 percent of technologies used in Nigeria were procured from outside.

The Chief Executive Officer, CWG Plc, Adewale Adeyipe, attributed the development to the poor state of the local ICT market.

He said: “Nigeria has a robust knowledge institution but technologies that are emanating from these institutions cannot sustain industrialisation in the domestic economy, and that underscores the high level of foreign technology consumption in Nigeria-huge technology Gap.”

He explained that the lack of experts with modern technological know-how is some of the challenges facing the sector.

“Experts with unique skills are required to address technological gaps,” he said.

Dapo Alade, a software engineer, has a slightly different perspective of the situation. According to him, at this early stage of technology growth in Nigeria, most businesses still doubt the quality of local software, especially on security. Hence, their preference for known brands or companies.

He, also noted that the work ethics of developers in Nigeria is a serious issue that has frustrated many businesses.

“Most Nigeria developers don’t follow due process. For instance, after a developer delivers a job, there might be some bugs in the application that requires additional support (after-sale support), usually part of procurement agreement, but some developers are just too difficult after delivery,” Alade stated.

However, Dr Yele Okeremi, the President of the Institute of Software Practitioners of Nigeria, noted that there has only been little improvement in the sector.

He stated that most software companies in the country did not have the required certifications.

Okeremi said, “There has been improvement in the expertise of indigenous software providers but the truth is that it could have been a lot better.

“My company, PFS, for instance, is one of the only two companies with a CMMI certification in Nigeria because it is an expensive process. But if you go to India, you will see several small businesses with the certifications.”

“On one hand, we can say people are improving but if we are moving from one to three where we could have moved from one to 15, I am not sure that is the kind of progress we want to talk about.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Starlink Pulls Plug on Ghana, South Africa, and Others

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Starlink, the satellite internet service operated by SpaceX, has announced the cessation of services in countries including Ghana and South Africa.

This decision comes as a significant blow to users who have come to rely on Starlink for their internet connectivity needs.

The decision, set to take effect by the end of April 2024, will disconnect all individuals and businesses in unauthorized locations across Africa, including Ghana, South Africa, Botswana, and Zimbabwe.

While subscribers in authorized countries such as Nigeria, Mozambique, Mauritius, and others can continue to use their kits without interruption, those in affected regions face imminent loss of access.

One of the reasons cited by Starlink for the discontinuation is the violation of its terms and conditions.

The company explained that its regional and global roaming plans were intended for temporary use by travelers and those in transit, not for permanent use in unauthorized areas. Users found in breach of these conditions face the termination of their service.

Furthermore, Starlink’s recent email to subscribers outlined stringent measures to enforce compliance.

Subscribers who use the roaming plan for more than two months outside authorized locations must either return home or update their account country to the current one. Failure to do so will result in limited service access.

The decision to discontinue services in certain countries raises questions about the future of internet connectivity in these regions.

Also, concerns have been raised about Starlink’s ability to enforce the new rules effectively. Reports indicate that the company has previously failed to enforce similar conditions for over a year, raising doubts about the efficacy of the current measures.

Starlink’s decision to pull the plug on Ghana, South Africa, and other nations underscores the complexities of providing satellite internet services in diverse regulatory environments.

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Nigeria’s Broadband Penetration Stalls at 42.53% Amid Connectivity Challenges

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Nigeria’s broadband penetration has stalled at 42.53% as of January, according to the latest report.

Subscriptions currently stand at 92.19 million, indicating a significant gap in connectivity, particularly in rural areas.

The Nigerian National Broadband Plan 2020-2025 aims to increase broadband penetration to 70% by 2025, with the ultimate goal of achieving 96% mobile broadband coverage by 2030.

However, this ambitious target requires substantial investment—approximately $461 million, according to a recent report by the Global System for Mobile Communications Association (GSMA).

While the country’s major telecommunications companies, such as MTN Nigeria and Airtel Africa, have invested heavily in expanding their network infrastructure, much of this development has been concentrated in urban areas. Rural and underserved regions face a significant coverage gap, exacerbating the digital divide.

Despite these challenges, Nigeria has made progress in improving its broadband infrastructure. Since 2012, the mobile broadband coverage gap across Africa has decreased from 56% to 13% in 2022, due to significant investments in network capacity and new technologies.

Nonetheless, millions of Nigerians, particularly those in rural regions, remain without access to essential telecom services.

To address this issue, Nigeria’s government established the Universal Service Provision Fund (USPF) in 2006, aimed at bridging the connectivity gap and expanding broadband access to unserved and underserved areas.

The fund provides resources for deploying telecommunications infrastructure in economically unviable regions.

The success of these initiatives, along with increased investments in broadband infrastructure and policies to incentivize internet expansion in remote areas, will be crucial in closing the connectivity gap and improving digital access for all Nigerians.

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iPhone Shipments Drop Amid Resurgence of Android Rivals

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Apple Inc. reported a significant drop in iPhone shipments during the March quarter, reflecting a downturn in sales across China amid the resurgence of competition from Android-powered rivals.

According to market tracker IDC, the tech giant shipped 50.1 million iPhones in the first three months of the year, a 9.6% year-on-year decline that fell short of the average analyst estimate of 51.7 million.

The steep decrease in iPhone sales marks Apple’s most significant quarterly dip since 2022, when Covid-19 lockdowns disrupted supply chains.

This time, the Cupertino-based company faces challenges from resurgent competitors such as Huawei Technologies Co. and Xiaomi Corp.

These firms have rebounded strongly in recent quarters, and their innovative product lines have begun to reclaim market share from Apple in China.

Samsung Electronics Co. regained its position as the top smartphone supplier globally, while Apple ranked second. Xiaomi closed the gap on Apple, shipping 40.8 million units, an impressive 33.8% increase year-on-year.

Transsion Holdings, another key player in the budget smartphone segment, nearly doubled its shipments, showcasing the competitive environment Apple faces.

Nabila Popal, research director at IDC, highlighted the broader shift in the smartphone market, which has recovered from the supply chain disruptions and challenges of recent years.

“While Apple has demonstrated resilience and growth in recent years, maintaining its pace and share in the market may prove challenging as Android manufacturers make strides,” Popal commented.

Apple has a strong brand and loyal customer base, yet its market position may be tested further by the aggressive pricing and innovative products offered by Chinese rivals.

The company’s efforts to sustain its premium pricing strategy may also be challenged as more customers consider switching to Android alternatives.

As the tech industry looks ahead to the rest of the year, Apple’s upcoming earnings report and strategic moves to address this competitive pressure will be closely watched by investors and industry observers alike.

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