In a rural community in Nigeria’s federal capital territory, primary school teacher Abubakar AbdulKhadiri struggles to teach computer science to his pupils. He lacks essential resources such as computers, electricity, and mobile network connectivity, making it challenging to provide quality education. Nearby, farmer Hajara Seriki faces financial exclusion due to the absence of mobile network coverage, forcing her to travel long distances to access banking services.
This lack of mobile networks in rural areas has profound implications. The financial sector in Nigeria has increasingly leveraged technology to reach underserved communities, but telecommunication infrastructure remains insufficient in many rural areas. Access to basic banking services, even through Point-of-Sale (POS) machines, requires such infrastructure, leading to high costs for residents who must travel long distances for banking needs.
The National Rural Telephony Project (NRTP), initiated in 2002 under former President Olusegun Obasanjo, aimed to address this issue by deploying telecommunication infrastructure in rural areas. However, the project encountered significant challenges and failed to provide the intended benefits to underserved communities.
The NRTP was designed to deploy Code Division Multiple Access (CDMA) technology and other systems to cover rural areas in Nigeria’s local government areas and the federal capital territory. The rationale behind using CDMA technology was that rural residents might not afford GSM technology.
The Nigerian government secured a $200 million concessionary loan from China for the first phase of the project. ZTE Nigeria, a Chinese firm, was contracted to procure and install CDMA technology in 110 local government areas. Another Chinese company, Sangai Bell, was awarded a contract to install fixed wireless systems in 108 local governments.
For the ZTE project, the government obtained an $82 million loan (part of the $200 million) with a 3.5 percent annual interest rate, a 12-year tenor, and a six-year moratorium. However, despite the loan’s release to ZTE, the project did not integrate into the transmission line, and the infrastructure became moribund.
The government had to hire private security companies to protect the infrastructure from vandalism, incurring additional costs. Privatization attempts of some parts of the NRTP project, including telephony exchanges, also faced bureaucratic obstacles and delays.
Despite these challenges, the government repaid the $82 million loan with interest, while the project’s assets remained underutilized. Currently, CDMA technology holds no market share in Nigeria, indicating that the ZTE project was not integrated into the network.
Experts suggest that telecom operators may lack the incentive to invest in non-economically viable communities, and the decision-making power for installing telecom masts has shifted to mast companies. Phase two of the NRTP, which planned to deploy 4G-LITE technology, also faced funding issues and underwent a change in scope.
The failure to implement the NRTP has deprived rural communities of essential technology and its associated benefits, hindering economic growth and financial inclusion.
In summary, the poor privatization and implementation of the National Rural Telephony Project in Nigeria have resulted in a significant setback for rural communities, leaving them without essential telecommunication infrastructure and access to technology.