Nigeria records lowest mobile penetration rate in Africa. | By Grace Joe

Mobolaji Johnson, the Minister of Communication Technology, said on Tuesday in Abuja that the federal government would soon launch a $15 million (about N2.4b) ICT venture capital fund.

Speaking to journalists after presenting the budget performance of her ministry to President Goodluck Jonathan, she said that the fund, which would be substantially private-driven, would be used to finance commercially viable projects, ideas and initiatives in the ICT sector.

The minister said that the Nigeria Information Technology Development Agency (NITDA) would anchor the fund and contribute about $3.6 million to it.

She said the balance of $11.4 million would be sourced from local and international investors, and that the fund would be managed by independent managers, who would work with the ICT incubation team.

Johnson said the managers would identify projects or initiative that “we believe are great ideas that will be commercially successful??.

“We will use the initial capital development fund of $15 million to fund the development of those ideas until they become commercially viable,” she said. “Basically, the reward is when they get a commercial viability and you sell them off or you do an Initial Public Offer (IPO) like they do with Facebook and all those companies where the returns go to the investors. As we become more successful we will raise additional money.”

The minister said that the country had yet to record the expected success in the telecommunication sector because of lack of necessary facilities.

According to her, the perceived success recorded with the increase in the number of telephone lines from 400,000 to 101 million was not enough when compared to other African countries.

She said that inadequate infrastructure was also responsible for the poor quality of service being rendered by service providers to the subscribers.

“When you look at the mobile penetration in Nigeria, we are about 60 per cent which is actually one of the lowest in Africa,” she said. “What is the reason for the poor quality of service? It is the first part that I mentioned, poor infrastructure.”

Johnson said that the United Kingdom, with a population of about 67 million and less land mass, has over three million sq. km of fibre optic and 60,000 base stations.

She said that Nigeria, with about 167 million people, has one million sq km of fibre optic and 20,000 base stations.

“The industry has grown very quickly and we are not building up infrastructure as quickly as we need to,” she said. “And so what we need to do is to actually build infrastructure, and that is why we are working with the network operators to build infrastructure.”

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