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'Not Party Time Yet' as Nigeria grapples with telecommunications reform
Unformatted Document Text:  “Not Party Time Yet”: Nigeria grapples with Telecommunications Reform 4 The development of a manufacturing base never went beyond the drawing board. The telephone industry had hoped to take advantage of the steel industry that was to be established in Aladja and Ajaokuta but the steel industry which was set up with the help of the then Soviet Union never was finished and today it remains largely abandoned. The lack of steel production activity was a major blow to a telephone-manufacturing base that was to be controlled by the government. Apart from steel, there were other raw material components for telecommunications manufacturing available in the country but none was taken advantage of to develop this needed manufacturing base. The Road to Reform In any case, a major concern was that NITEL struggled with the government charge to spread telephones to the remote areas or even to add substantially to existing lines in the urban centers. Instead, the waiting list for telephones rose rapidly (Aragba- Akpore, 1999). This situation led to mounting dissatisfaction with the monopoly structure and service. It was clear that the government, through NITEL, could not meet its goals for telecommunications. The required capital for providing universal access to telephones was too daunting for the government. This is not unlike the situation in other developing countries such as Chile and India that turned to liberalization for a solution (Mody, 1995 and Hudson, 1997). Eventually, the pressures to make changes in Nigeria came internally as well as from external sources. Internally, the pressures came from local businesses and entrepreneurs who were aware of liberalization processes in other parts of the world and its accompanying benefits. The Nigerian market is big and most of it remains untapped because of years of NITEL inefficiency. For instance, Aragba-Akpore (1999) noted that over 10 million Nigerians were on the wait-list for telephones by the mid-1990s. There were millions of others who did not bother to put their names on the list. Thus, the local entrepreneurs were excited in anticipation of the potential profits from a liberalized market. The external pressures came primarily from international financial institutions and foreign political forces both with different interests. The financial institutions insisted on

Authors: Onwumechili, Chuka. and Okereke-Arungwa, Joy.
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“Not Party Time Yet”: Nigeria grapples with Telecommunications Reform
4
The development of a manufacturing base never went beyond the drawing board.
The telephone industry had hoped to take advantage of the steel industry that was to be
established in Aladja and Ajaokuta but the steel industry which was set up with the help
of the then Soviet Union never was finished and today it remains largely abandoned. The
lack of steel production activity was a major blow to a telephone-manufacturing base that
was to be controlled by the government. Apart from steel, there were other raw material
components for telecommunications manufacturing available in the country but none was
taken advantage of to develop this needed manufacturing base.
The Road to Reform
In any case, a major concern was that NITEL struggled with the government
charge to spread telephones to the remote areas or even to add substantially to existing
lines in the urban centers. Instead, the waiting list for telephones rose rapidly (Aragba-
Akpore, 1999). This situation led to mounting dissatisfaction with the monopoly structure
and service. It was clear that the government, through NITEL, could not meet its goals
for telecommunications. The required capital for providing universal access to telephones
was too daunting for the government. This is not unlike the situation in other developing
countries such as Chile and India that turned to liberalization for a solution (Mody, 1995
and Hudson, 1997). Eventually, the pressures to make changes in Nigeria came internally
as well as from external sources.
Internally, the pressures came from local businesses and entrepreneurs who were
aware of liberalization processes in other parts of the world and its accompanying
benefits. The Nigerian market is big and most of it remains untapped because of years of
NITEL inefficiency. For instance, Aragba-Akpore (1999) noted that over 10 million
Nigerians were on the wait-list for telephones by the mid-1990s. There were millions of
others who did not bother to put their names on the list. Thus, the local entrepreneurs
were excited in anticipation of the potential profits from a liberalized market.
The external pressures came primarily from international financial institutions and
foreign political forces both with different interests. The financial institutions insisted on


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