Nigeria-made phone market suffers as smartphone importation hits N50bn monthly

Godfrey Elimian
Consumers in Nigeria have continued to purchase devices despite a tough economy and plummeting purchasing power
Refurbished Smartphones
Refurbished Smartphones

Despite having a large mobile phone user base and a growing demand for smartphones, Nigeria is having a difficult time building a domestic mobile phone manufacturing industry.

Boasting over 320 million SIM cards and more than 220 million active mobile connections, the manufacturing of mobile phones within the country remains a distant dream. Currently, over 99% of mobile devices in Nigeria are still being imported from abroad, with monthly imports estimated at a staggering N50 billion.

The soaring demand for mobile phones is evident. Consumers in Nigeria have continued to purchase devices despite a tough economy and plummeting purchasing power which is not far-fetched from a dwindling exchange rate and rising price levels.

According to data supplied by the International Trade Centre (ITC), in the period from 2019 to 2021 alone, the total telephone shipment to Nigeria amounted to $2.35 billion, averaging a monthly import of approximately $65.2 million.

At the current exchange rate (N768 – N800/$), the figure amounts to about N50 billion. However, this dependency on foreign imports has had significant implications for the country’s economy.

Read also: Nigeria’s mobile gender gap: 27% of female smartphone owners do not use the internet

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Foreign phones still dominate the Nigerian market

Nigeria has become a thriving market for various phone brands from around the world, with companies from Finland, France, the USA, India, Japan, the Philippines, Taiwan, South Korea, South Africa, and the UAE flourishing in the country.

The local market is dominated by popular foreign brands like Tecno Mobile, Infinix, Nokia, Samsung, and Apple, whose devices range in price from N150,000 to over N1 million. These brands collectively sell around 63 million devices in Nigeria every year, and an average user tends to change devices every six to 18 months.

Despite attempts by indigenous companies to venture into phone manufacturing, success has been limited. Brands like AfriOne and RLG once aspired to establish local manufacturing plants, but they struggled to compete with foreign brands and eventually folded. Even the ‘made-in’ Nigeria phone, ITF mobile, presented to former President Muhammadu Buhari in 2021, failed to make a significant impact in the market.

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Foreign brands have also been hesitant to establish manufacturing plants in Nigeria. Samsung Electronics, for example, cited economies of scale, improved infrastructure, tax reliefs, and other factors as reasons for choosing South Africa and Egypt for their African manufacturing plants over Nigeria. The lack of strong policies on indigenization and the absence of essential infrastructure have contributed to foreign brands’ reluctance to invest in local manufacturing facilities.

The absence of a manufacturing plant in Nigeria deprives the country of job opportunities and results in the repatriation of profits by foreign brands. While more Chinese brands are entering the market due to their huge potential with over 200 million people, they are also cautious about establishing manufacturing plants, preferring to rely on imports.

Read also: Mobile money account ownership in Nigeria grows by 6% despite various concerns

Way forward for Nigeria’s smartphone industry

Industry experts have called for government intervention to revive the Nigerian mobile phone manufacturing industry. The National Association of Telecoms Subscribers (NATCOMs), through its President, Chief Deolu Ogunbanjo, described the situation as very untidy and has suggested revisiting the Nigerian Communications Commission (NCC) regulation on phone manufacturing.

He believes that major players like Tecno and Samsung, with significant market shares in Nigeria, should be compelled to establish local manufacturing plants to boost employment and reduce capital repatriation.

Ogunbanjo said with Nigeria crossing the 200 million mark in mobile connections, there should be a manufacturing plant in Nigeria.

“That would go a long way to create jobs and reduce repatriation of funds out of Nigeria”, he says.

Creating a conducive business environment with adequate infrastructure and security is essential to attracting investment in local phone manufacturing. However, the fluctuating foreign exchange and economic instability have deterred potential investors. There is a need for a new roadmap that incentivizes both local and foreign manufacturers to set up factories in Nigeria and contribute to economic growth.

The Nigerian government must also proactively regulate the influx of mobile devices from various countries to protect the local market. More proactive policies and monitoring are necessary to ensure that the market remains stable and does not become overwhelmed by an influx of unregulated mobile devices.

In conclusion, the Nigerian mobile phone market is heavily reliant on imports, with over 99% of devices coming from abroad. The absence of a local manufacturing industry has significant implications for the economy, as billions of dollars are spent on phone imports each year.

To revitalize the made-in-Nigeria phone market, the government must create a business-friendly environment, address infrastructural deficits, and provide incentives to attract local and foreign manufacturers. With the right policies and interventions, Nigeria can position itself as a thriving hub for mobile phone manufacturing, leading to job creation and economic growth.

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