FG Urged to Create Basic Data Infrastructure to Attract Foreign Investments

Emma Okonji

The Chief Operating Officer of MDXI, MainOne’s Data Centre business, Mr. Gbenga Adegbiji, has called on the federal government to revisit its policies and create basic infrastructure for data centre operations across Nigeria, in order to attract foreign investments in the Information and Communications Technology (ICT) sector.

Adegbiji who gave the advice during an interview with THISDAY, said: “Investors do not invest based on what any government tells them, but they invest based on what the see, which has to do with growth indices and numbers. They look at the population report and the growth of the economy, including security of investments in the country, before they can invest in the country. 

“Attracting foreign investments, goes beyond what the Nigerian government is currently doing by mere visiting these investors in their countries to woo them to invest in Nigeria. They will surely come and invest if they see the need to invest in Nigeria, and a good example is the recent acquisition of MainOne by Equinix because MainOne has over the years, positioned its operations to a standard that is attractive to any foreign investor. Investments are made based on numbers, foreseeable return on investments, and risk that is associated with a particular country.”

According to him, for any willing investor to come to Nigeria to invest, there must be basic infrastructure on ground. Citing lack of adequate electricity supply, which is a basic infrastructure for data centre operation, Adegbiji said the lack of such basic infrastructure would make it difficult for investors to consider Nigeria as investment destination. 

“Adequate and steady electricity supply is key to data centre operation because data centres consume a lot of electricity and any data centre operator will look at the stability of electricity supply of a country, before venturing to invest in that country. If power is achieved, operators will be able to achieve up to 60 per cent of their operations in data centre business,” Adegbiji said. 

He therefore advised government to revisit its policy on power and ensure stable supply of electricity for businesses, in order to attract investors into Nigeria’s technology space.

He said apart from power infrastructure, government needed to also look at the area of deployment of fibre optic cables across the country, adding that a situation where Nigeria has huge broadband capacities on the shores of the country, from the landing of several submarine cables, without commensurate distribution of the fibre optics cables into the hinterland, will continue to deprive Nigerians in the hinterlands, the access to ubiquitous broadband capacities in the country. He further said fibre would remain a critical resource of any data centre, and that connectivity and power should be considered by government in order to drive development in Nigeria’s technology space.

Adegbiji said he would look forward to a situation, where business owners and students in the northern part of the country, would have the same broadband access with business owners and students in the southern part of the country, adding that government policies must encourage laying of fibre optic cables across the country to enable easy access to internet and broadband connectivity. 

He called on government to begin licensing of companies that would invest in micro-grid, in order to generate sufficient electricity, since data is the next oil for Nigeria.

He also advised government to consider tax incentives for data centre operators, because almost everything needed for data centre operations are imported. 

“If data centre operators have to pay 40 per cent tax on every equipment imported into Nigeria, it means data centre operators in Nigeria can never be competitive with other data centre operators outside of the country, because of high cost of tax on every importation of equipment into Nigeria. Government must help to develop data centre operation in a cost-effective way that will further drive technology adoption and digital transformation in Nigeria,” Adegbiji said.