Femi Adeoti is the Managing Director/CEO, Africa Operations, Inlaks Computers Limited. In this interview with Ozioma Ubabukoh, he talks about what Nigeria stands to gain by extending infrastructural development in the cities to the rural areas.
Your company is rated as a notable ICT and infrastructure solutions provider in the country with an ATM installed base of 4,000, how will you rate Nigeria’s acceptance of ICT solutions to its diverse challenges?
The world has become a global village, with technology being a major driver. I believe technology will play a major role in how fast Nigeria (and by extension Africa) is able to bridge the developmental gap with the more advanced nations. However, the fast rate of technological adoption is currently being witnessed only in major cities whilst the rural areas with larger population of Nigerians hardly feel the impact of technology because of the challenging state of the infrastructure in those areas.
In order to accelerate development in the rural areas, there must be a concerted effort at improving those areas. This I must admit that the government cannot handle alone. It has to be through some sort of public-private partnership. Major policy decisions such as the broadband policy initiative of the government will also assist to fast track the required changes in those areas.
How could government leverage on the telecoms industry and ICT strengths to diversify the economy in the areas of non-oil revenues – agriculture, health and insurance?
We need to encourage well-established, global companies to set up assembly plants in Nigeria. The encouragement could be in form of favourable tax concessions and also through providing an enabling environment. With this, more jobs will be created and this will also aid in faster technological transfer.
Why did the West African Monetary Institute select Inlaks to deploy a core banking solution (T24) to major banks in West Africa such as the Central Banks of the Gambia, Sierra Leone, Guinea , Côte D’Voire and the rest?
This project was conceived and implemented in order for the West African region to build a common infrastructure for a single currency regime as agreed by the Heads of States of the sub-Region. These monetary policies are meant to help with macro-economic integration and other economic developments of the sub-region. This includes a standard payment platform, tools for the measurement of economic growth, aggregate productivity, cross-country output, convergence and other initiatives that enable inter-trade and investments. You also deployed a core banking solution (T24) for the Microfinance and rural Banks in Ghana. What was the project about?
The project was a World Bank sponsored initiative to bring all the rural banks into a common payment platform. With this, adoption of regulations and common reporting became easier. In addition, the rural banks benefited from automation and better financial inclusion for the majority of the low income earners. The next phase of the project is to introduce payment platforms such as ATMs, points of sales, Internet banking, etc to the rural and microfinance banks.
You seem to be growing in the area of electronic business. What is Inlaks doing differently to drive this growth?
We keep investing in the right resources in terms of technological skills as well as functional skills. This is in addition to a constant review of our strategy due to the rapid change in our industry.
Nigeria is still behind in the global mobile money revolution of reaching the large number of people at the bottom of the pyramid. What are the challenges inhibiting it from doing so?
The challenges are many and varied. These include lack of proper education, heightened risks due to instances of fraud and other challenges to the economy.
In the midst of pushing for full mobile money adoption and a cashless system, don’t you think the rising cases of cyber- crime could be a cog in the wheel to achieving this?
The increasing cases of cyber-crimes is a cause for worry today. However, it should not define or limit the push for the adoption of mobile money. The financial community needs to continue to invest in security solutions both for stationary data and data in transit. In addition, service providers and customers need to understand that security is not a once and for all investment as hackers would continue to find new methods of compromising the networks and the internet.
There are still so many villages in Nigeria without ATM indicating the high potential of ATM deployment in the Nigerian market. What do you think is working against deployment of ATMs in the rural areas?
The availability of basic infrastructure that the ATM needs to function; primarily power in this case, might be one of the major challenges. The investment in alternative power, that is, Solar panels, Inverters, etc immediately sounds like a viable option. Another challenge is that of very stable and efficient network infrastructure. One challenge that should not be overlooked however has to do with the business justification for locating ATMs in such rural areas. This really is a major challenge for the primary stakeholders. Ultimately, as the awareness campaigns continue and the knowledge gap is narrowed through education and communication, the dependence on ATMs will increase and will eventually warrant the need for ATMs in such locations.
Why do you think the huge market for ATMs still remains untapped?
Of every 10 Nigerian adults, chances are that only about three have bank accounts. This was the outcome of a recent survey by the Enhancing Financial Innovation and Access organisation. Besides, many in these categories lack information about banks, just as most of them cannot read or write, and therefore prefer dealing with cash. This is the obvious reason for the huge untapped market.
How will you advise banks to take advantage of this untapped market?
Awareness, awareness and more awareness. From the initial introduction of ATMs till date, the acceptability has continued to increase massively. The Nigerian Inter-Bank Settling System’s big data fact sheet on ATM operations puts the total transaction value in naira from January to March 2015 at N937.96bn. This is with about 80 per cent believed to be unbanked. The opportunities are therefore massive and highly untapped.
How can the unbanked Nigerians be reached?
This is achievable through mobile or branchless banking which is the delivery of financial services outside conventional bank branches through mobile phones and non-bank retail agents. At present, there are 30 million mobile money users worldwide. According to the Global 2012 Global Mobile Money Adoption Survey, there are more mobile money accounts than regular bank accounts in Kenya, Madagascar, Tanzania, and Uganda, and there are more mobile money agent outlets than conventional bank branches in 28 countries. This might be the trend Nigeria needs to adopt.
What is the potential for ICT growth in Nigeria?
The potential for ICT growth in Nigeria is massive. As a quick example, the introduction of the mobile phone has opened up other sectors of our economy, job opportunities, business opportunities etc. Yet, it is believed that the penetration is only at about 29 per cent of the total country’s population which is estimated to be about 170 million.
How far will you say ICT has aided social development and economic transformation in Nigeria?
The former Minister of Communications and Technology, Dr. Omobola Johnson, puts the ICT sector’s contribution to the country’s GDP in 2014 at $50 billion, which is about 8.34 per cent. According to the International Data Corporation, ICT growth was a strong driver of GDP growth in 2015 for Nigeria. Currently, ICT firms are realising the need to be more involved through Corporate Social Responsibilities. This has been heavily backed up by the actions taken through different initiatives/ programmes by the ICT firms to give back to the society.
What is Inlaks doing to ensure that more Nigerians have access to ATMs?
As an organisation, we have continued to be flexible to our various customers. We have employed both the CAPEX and OPEX methods among other things, knowing and understanding the challenges of the times and the need to evolve. Our ability to innovate, adapt and be customer focused has enabled us to deploy ATMs in excess of 4,000 units in the space of about three years, thus, making us presently the fastest growing ATM brand in the Nigerian market.
Inlaks recently inaugurated its new Technical Resource Centres in Enugu, in addition to the current one in Lagos. You also have plans to complete the one in Abuja by early 2017. What is the driving force behind these initiatives?
The increased investment in our Technical Resource Centres is our response to the sharp growth in our Hyosung ATMs deployment, projected to grow to 5,000 units by the end of this year. It is also due to increased request from various customers for us to support their third party, non-Hyosung ATMs for which we have capabilities. We therefore needed to scale up our support infrastructure to be able to cope with these demands.
We hear so much about your activities in the banking sector. Are there plans to penetrate the telecoms, oil and gas and other financial institutions in Nigeria?
Inlaks is also servicing these other sectors, though the initial focus was the financial sector. As part of our five years goals, we have accelerated our corporate strategy on diversification into the other sectors of the economy competitively. As a result of this new strategic initiative, we are creating new products and solutions for the new markets in Telecommunications, Oil and Gas, Government and Manufacturing.
Your company also deploys solar energy systems, what is your advice considering the power challenge in the country?
With the persistent power challenge in Nigeria, one way to turn this around is to consider alternative sources of generating electricity that is environmentally friendly, in compliance with global initiatives that could be easily managed. One of the most effective ways through which Nigeria could therefore bridge the power generation gap is through solar energy and other non-fossil sources which we have been deploying to some of our clients in Nigeria.
I see lots of opportunities in the Off-Grid solar systems for deployment in remote areas where reliable, commercially produced electric power is not readily available in the country today. This is the perfect residential solar power system being proposed by Inlaks for the home owners who want to enjoy some level of independence from the public power supply.
Owing to the present economic situation in Nigeria that affects hundreds of Small and Medium Scales Businesses, how would Inlaks help the surviving SMEs to turn capital expenditure to operational expenditure through the use of technology?
The rapid rise of initiatives such as Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), outsourcing and managed operations shows that many organisations are turning towards shared-platform solutions for cost saving advantages. Inlaks has key strategic partnerships with our partners in order to deploy key solutions for the small and medium scales businesses.
How would Inlaks as an experienced systems integration company enable organisations to do more with less?
At Inlaks we help our clients to focus their resources on business innovation instead of infrastructure integration with our converged infrastructure solution offerings. In addition, we assist organisatoins to accelerate their journey to the cloud and by offering best-in-class services across shared platforms.