The Executive Vice Chairman (EVC) of Nigerian Communications Commission (NCC), Prof. Umar Danbatta has again reiterated that technology-driven telecommunications industry has contributed $70 billion to Nigeria’s economy.
Prof. Umar Danbatta
Danbatta, also said that the industry had provided over 500,000 jobs in the public and private sectors and improved the lives of millions of Nigerians. The current data indicates that the telecommunications sector contributed 16 per cent in the second quarter of 2023 to the nation’s Gross Domestic Product, GDP.
From a 14.13 per cent contribution in the first quarter of 2023, and up from the hitherto 15 per cent all-time-high record contributed in the second quarter of 2022, the telecommunications sector added 16 per cent to the national GDP in the second quarter of 2023 to set a new record.
Adding to the success already achieved the Commission is optimistic that expanding investment the digital Infrastructure space will further enhance the country’s economy. According to Engr. Anthony Ikemefuna, Deputy Director at the NCC, who spoke on the theme: Strengthening Digital Infrastructure For Efficient, Innovative Payment Systems In Nigeria, at the 2023 FICAN annual conference holding in Orchid Hotel Lagos, said the country at the moment stands at the crossroads of technology and finance and the path it chooses will not only shape the national economic landscape but also redefine the way we interact with money and conduct transactions.
Ikemefuna, while sharing his thoughts notes that physical assets such as equipment, bridges and roads are essential to an economy, so also is digital infrastructure as it enables citizens to participate in socio-economic activities.
He described digital infrastructure as the foundational technological components and systems that enable the functioning and connectivity of digital services, applications, and data in today’s information age. It forms the backbone of the digital economy and society. Digital infrastructure, he notes further encompasses various elements and technologies, including, but not limited to Data Centers, Networks, Hardware, Software, Cloud Computing, Cybersecurity Systems, and Data Storage Solutions.
In examining payment systems, and their types he said that payment systems are the processes, technologies, and institutions that enable the transfer of monetary value between individuals, businesses, and government entities. These systems facilitate the exchange of goods, services, or assets by providing a means for parties to settle financial transactions.
Payment systems have evolved significantly over time, from traditional methods like cash and cheques to modern electronic and digital methods. Payment systems includes but not limited to the following: Cash Payments, Cheque Payments, Electronic Funds Transfer (EFT), Credit and Debit Cards, Mobile Payments, Online Banking, Digital Currencies, Point of Sale (POS) Systems, Contactless Payments, Mobile Wallets, and Quick Response (QR) Code Payments.
For the country to get efficient payment system right, he narrated that strengthening digital infrastructure for efficient and innovative payment systems in Nigeria requires a multi-faceted approach involving various stakeholders, including government agencies, regulatory bodies, financial institutions, technology providers, and the private sector. He provided some key strategies and the way forward for achieving this goal which according to him will require investment in Digital Infrastructure, expansion and upgrading broadband and mobile network infrastructure, particularly in underserved and rural areas.
He also pointed to the need to invest in Data Centers and reliable power supply to ensure the resilience and availability of digital payment systems, as well as promote digital literacy and inclusion launch nationwide digital literacy campaigns to educate citizens, especially those in rural areas, about digital payment systems. In furtherance to this he mentioned the need to encourage the adoption of mobile banking and agency banking to reach unbanked and under-banked populations and strengthening Regulatory Frameworks Update and streamline regulatory frameworks to accommodate digital payment innovations while ensuring consumer protection, security, and financial stability.
Essentially, collaboration with industry stakeholders to establish clear standards and interoperability requirements was part of his recommendation, and also with enhancing cybersecurity measures as well as develop and enforce robust cybersecurity regulations to protect digital payment systems from cyber threats. In addition, promoting the adoption of encryption, multi-factor authentication, and fraud detection technologies, are key factors needed in the drive he said.
Furthermore, he mentioned the need to foster competition and Innovation, promote a competitive environment by preventing monopolistic practices and ensuring fair market access for new players in addition to encouraging fintech innovation through regulatory sandboxes and support for start-ups. The need to build trust and consumer confidence is critical as well as implementation of robust consumer protection mechanisms, including dispute resolution processes and complaint handling.
Ikemefuna, was passionate that the system has to raise awareness about the security and benefits of digital payments through public campaigns. On data privacy and consent, he said there is critical need to enforce data protection regulations and ensure that user data is handled responsibly and transparently. He said that sustainable collaboration with private sector, and partnerships between financial institutions, telecom operators, and fintech companies to develop and deliver innovative digital payment solutions should be encouraged and widened.
For sustainability, he said there is need to leverage the expertise and resources of the private sector to expand and improve digital infrastructure, while government should take a leading role in promoting digital payments by setting a clear vision and providing support. Implement e-government initiatives to promote digital payments for public services and benefits distribution. Continuous monitoring of the performance and security of digital payment systems and infrastructure, according to him remain a key factor in addition to collection and analyzing data to identify areas for improvement and address emerging challenges.
The Role Of NCC
Ikemefuna, noted that the role of the NCC in strengthening digital infrastructure for efficient and innovative payment systems in Nigeria is crucial. He mentioned that the NCC assigns and manages the radio frequencies (spectrum) efficiently in the telecoms sector as this spectrum is essential for wireless communication, including mobile payments and data transfer. By ensuring that sufficient spectrum is available and well-managed, the NCC can support the expansion and quality of mobile networks, a critical component of digital payments.
In addition, he said the NCC can work with industry stakeholders to encourage investment in telecommunications infrastructure, including expanding broadband coverage to unserved, underserved, and rural areas. This infrastructure is vital for ensuring that digital payment systems reach a wider population. Also, the NCC is constantly improving her licensing and regulatory frameworks to promote competition and innovation in the telecoms sector. A competitive environment encourages telecom providers to invest in improving their networks and services, which benefits digital payment systems by ensuring reliable connectivity.
He also noted that digital payment systems require robust cybersecurity measures to protect users’ financial data and transactions and the NCC enforces cybersecurity standards and collaborates with other regulatory bodies to ensure that payment service providers adhere to data protection and security guidelines. Speaking on consumer protection he said the NCC can advocate for consumer protection measures, including dispute resolution mechanisms and transparency requirements for payment service providers.
This he said helps to build trust in digital payment systems, encouraging more people to adopt them. In addition, he said that collaborative efforts between the NCC and financial regulators such as the CBN, are essential for coordinating policies and regulations related to digital payments and telecommunications. This ensures that the regulatory environment is conducive for innovation and growth and also the NCC monitors the performance and quality of telecoms services, including network reliability, quality of service (QoS) and speed. Regular reporting and transparency in these areas will help to identify issues and drive improvements that will benefit digital payment systems.
On financial inclusion, Ikemefuna said the NCC can encourages telecom operators to support financial inclusion initiatives by partnering with banks and fintech companies to offer mobile banking and payment services to unbanked and under-banked populations and is constantly striving to create an environment that encourages innovation by simplifying regulatory processes and reducing bureaucratic hurdles for telecom and fintech companies looking to develop new payment solutions. A good example is the issuance of short codes for monetization purposes to banks and other financial institutions/fintechs that have CBN license.
