Software accounts for 40% of International remittances

. NCC processes $1.8b CRS invoices

WITHIN the last three years, software may have accounted for 40 per cent of the total international remittances recorded in Nigeria’s Information and technology sector, even as the Nigerian Communications Commission (NCC) said it processed about $1.8 billion; Euro 51.57 million and E3.38 million Confirmation of Reasonable Service for Foreign Exchange (CRS) invoices in the last three years.

   Precisely, the Nigerian Communications Commission (NCC), which disclosed this in Lagos on Tuesday, at a Stakeholder Forum on Confirmation of Reasonableness of Service Fees (CRS), noted that it has become imperative for the country to boost local contents and develop required skills for the growth of telecoms related software in Nigeria.

    NCC Executive Vice Chairman, Dr. Eugene Juwah disclosed that increased in the volume of activities witnessed in the telecoms sector over the last one decade in the area of voice and data traffic led to the demand for associated contents and software requirement for services delivery.

   CRS, which refers to remittances of foreign currencies payments made by the telecoms companies in Nigeria to overseas services provider, which is also known as capital flight, Juwah informed that this is  based on the Central Bank of Nigeria (CBN) regulations on International trade transactions, adding that NCC took over this regulatory oversight to support the CBN.

    According to the EVC, who was represented by the Director of Policy, Competition and Compliance Mrs. Loila Emakpore, said that concerned over the impact of foreign direct investments (FDI) in the telecoms sector compared to repatriation by operators out of Nigeria worries the commission and prompted it to come up with examinations of remittances across board.

  According to him, CRS procedures in Nigeria were updated through similar fora in 2003 and 2009 in order to guide the industry on the payments for invisible trade transactions.

  He said since then, the industry failed to realise the level of enormous paper work required to drive these telecoms remittances and payments to overseas vendors.

   Giving the statistics, Juwah, who said NCC processed and approved over  5,580 invoices in the telecommunications industry between 2010 and 2012, gave the figures to include; $281.2 million, $624.6 million; $894.5 million and Euros 5.7 million; 14.5 million; 31.37 million and  E1.2 million; E1.4 million; 0.78 million respectively.

    Besides, he said the commission declined over 745 applications due to integrity tests, ranging from over-invoicing, expired contract agreements, as well as duplications of invoices among others.

   The NCC boss informed that these remittances calling for review include arithmetic accuracy check, price verification, documentation checks, international pricing database maintenance, vetting executed contract agreements among others.

   Juwah said, "The commission is of the opinion that it is not enough to remit money to overseas service providers, the industry need to develop local contents, IT software skills, and embrace the abundant capacity available at our sea shores through submarine cable services in order to create employment opportunities for our youths and foster economic growth in the nation."

   Furthermore, the EVC explained that the forum became necessary for NCC to gather stakeholders in puts on how to address stringent conditions currently place on hardware purchase by international vendors.

  He said, "We became aware of the stringent conditions the vendors attach to the purchase of hardware equipment by deliberately separating the associated operating and basic software components from the hardware equipment. Why because the overseas service providers feel that the operators have neither option nor a strategic plan to replicate local contents and IT software skills."

   According to him, the imperative of carrying out the CRS function includes; to check capital flights;  

encourage development of telecom software skills and local contents in Nigeria; ensure efficient utilization of forex by the telecoms companies; control of forex round tripping and bridge the gap between telecoms FDI and CRS remittances.