Grace Ashiru
With a substantial mobile phone user base and a rising demand for smartphones, Nigeria faces significant challenges in establishing a domestic mobile phone manufacturing industry.
Despite having more than 320 million SIM cards and over 220 million active mobile connections, the country has not realized the goal of producing mobile phones locally. Currently, an overwhelming 99% of mobile devices in Nigeria are imported from other countries, resulting in monthly imports reaching an estimated N50 billion.
The significant demand for mobile phones is apparent in Nigeria, where consumers continue to buy devices despite economic challenges, decreasing purchasing power, and the impact of a declining exchange rate and rising prices.
Based on data from the International Trade Centre (ITC), the period between 2019 and 2021 witnessed a total telephone shipment worth $2.35 billion to Nigeria, with an average monthly import of around $65.2 million.
At the present exchange rate (N768 – N800/$), the mentioned figure corresponds to approximately N50 billion. Nevertheless, the heavy reliance on imports has significantly impacted Nigeria’s economy.
Foreign phones still dominate the Nigerian market.
Nigeria has emerged as a thriving market for various phone brands worldwide. Companies from Finland, France, the USA, India, Japan, the Philippines, Taiwan, South Korea, South Africa, and the UAE have found success in the country.
The local market is primarily dominated by popular foreign brands such as Tecno Mobile, Infinix, Nokia, Samsung, and Apple. These brands offer a diverse range of devices, with prices spanning from N150,000 to over N1 million. These brands sell approximately 63 million devices in Nigeria annually, and the average user tends to switch devices every six to 18 months.
Efforts made by indigenous companies to venture into phone manufacturing have faced limitations and challenges. Brands like AfriOne and RLG had aspirations of establishing local manufacturing plants, but they struggled to compete effectively with foreign brands, leading to their eventual closure. Even the made-in-Nigeria ITF mobile, handed to former President Muhammadu Buhari in 2021, failed to attain significant market success.
Way forward for Nigeria’s smartphone industry
Industry experts have highlighted the need for government intervention to revitalize the Nigerian mobile phone manufacturing industry. Chief Deolu Ogunbanjo, the President of the National Association of Telecoms Subscribers (NATCOMs), expressed concern over the current state of affairs, describing it as untidy. As a potential solution, he proposes revisiting the Nigerian Communications Commission (NCC) regulations on phone manufacturing.
One suggestion by Chief Ogunbanjo is to compel major players in the Nigerian market, such as Tecno and Samsung, who hold significant market shares, to establish local manufacturing plants. This move is expected to positively affect employment opportunities within the country and reduce the capital repatriation associated with imported phones.
Ogunbanjo emphasized that with Nigeria surpassing 200 million mobile connections, establishing a manufacturing plant within the country is imperative. Doing so would significantly impact job creation and help mitigate the repatriation of funds out of Nigeria.
For this vision to become a reality, creating a conducive business environment that includes robust infrastructure and enhanced security measures is essential. However, the fluctuating foreign exchange rates and economic instability have discouraged potential investors from venturing into local phone manufacturing. To address these challenges, there is a pressing need for a new roadmap that incentivizes local and foreign manufacturers to set up factories in Nigeria, thereby contributing to the country’s economic growth.
The Nigerian government plays a crucial role in safeguarding the local mobile phone market by implementing proactive regulations. Monitoring and policies are necessary to maintain market stability and prevent it from being inundated with unregulated mobile devices from various countries.
The heavy reliance on imported mobile devices, with over 99% coming from abroad, underscores the absence of a domestic manufacturing industry. As a result, this dependence on imports leads to significant economic implications, with billions of dollars spent on phone imports annually. To address these challenges, fostering a local mobile phone manufacturing industry is crucial, as it would reduce capital outflow and stimulate job creation and economic growth within Nigeria.
To rejuvenate the made-in-Nigeria phone market, the government must establish a favorable business environment, tackle infrastructural shortcomings, and offer local and foreign manufacturers incentives. By implementing appropriate policies and interventions, Nigeria can position itself as a thriving mobile phone manufacturing hub, resulting in job opportunities and economic advancement.
