Business Hilights
Tracking Nigeria's Headline Business News Online

NITDA would have done to Omatek, what NCC did to Etisalat—-Analysts

Omatek Computers Plc., was once a leading computer and other device brand of note in Nigeria, but was serially silenced and technically subdued by debt pileup from the Bank of Industry (BoI) some months ago.

The bank had in July secured a court ruling to take over the company’s operational premises due to nonperforming loans (NPLs)  and that effectively marked the eventual temporary comatose as production has seized, leading to loss of jobs and suspension of growth of a company that was hitherto championing local content in computers and allied devices manufacturing.

It was not clear if the issues of NPLs had a hand in the death of the chief executive, Engineer Florence Seriki just few months ago.

However, it was clear that what the federal government, though the Nigerian Communications Commission (NCC), had considered in coming to the rescue of 9Mobile, formally Etisalat Nigeria was saving jobs of Nigerian, but the same consideration was not to be for Omatek.

Etisalat Nigeria could not pay back loans it had taken for network upgrade and expansion and eventually rebranded as 9mobile after parent Etisalat terminated a management agreement with its Nigerian unit and handed its 45 per cent stake in Etisalat Nigeria to a trustee.

In a statement issued in July the NCC said if 9mobile had gone under it would have “created a social problem especially with the job of over 2,000 Nigerians on the line”.

The commission added that the loss of the operator could even create security challenges for the country.

In the case of Omatek, analysts felt that the Nigerian Information Technology Development Agency (NITDA), the federal government agency directly in charge of monitoring technology development ought to have put up a fight for the soul of Omatek for the interest of growing local content in the industry.

Efforts to get the views of NITDA at press time failed, but industry pundits averred that NITDA, within the period of the court case between BoI and Omatek, would have intervened the way NCC did using the Central Bank of Nigeria (CBN) also to save thousands of jobs as were saved in today’s 9Mobile.

Kola Yusuf, a communications lawyer in an interview on the rise and fall of Omatek blamed NITDA in rushing as early as possible the way NCC did to Etisalat, saying the fight for the survival of Omatek would have been earlier considering the fact that BoI is also a government agency and development bank.

According to him, “In matters of national interest to save an ailing firm that is strategic for an industry when local content is put on the table of consideration, the issue of ‘Too Big To Fail’ clause can be drafted in to drive the revival of the firm”.

“Yes, it is possible. But the particular government agency in charge may have fallen into slumber. Am saying this because the collapse of Omatek; is a collapse too many for the ICT sector, especially when issues of local content in computer manufacturing is considered.

“If NCC claimed that it was saving 2000 jobs, do you know how many jobs that were lost in Omatek?  Even if security of the nation is also considered in the case of Etisalat, the same security should also be considered in the fall of Omatek because the closure of the company for months remains a security matter after all.

Yusuf argued that “in an economy that is serious to grow local capacity in technology manufacturing, issues of debt default will continue to come up and it demands the strategic understanding of the government through the relevant agencies to nip collapse in the bud. Just like NCC did in 9Mobile, I think NITDA would have done same to Omatek.

“Besides, can’t BoI extend the loan provision or appoint receiver agents while the company continue operations and save jobs in the process?

An investigation into the challenges leading into the problems of Omatek showed that part of the debt build up stemmed from the company’s failed investment in solar-powered devices which can happen to any company after all.