The Nigerian Communication Commission (“NCC”) on 5 July 2021, established an office known as the Nigeria Office for Developing the Indigenous Telecoms Sector (“NODITS”). The primary objectives of NODITS is to ensure compliance with the National Policy for the promotion of Indigenous Content in the Nigerian Telecommunication Sector (“Nigerian National Local Content Policy”).  The Nigerian National Local Content Policy was formulated by The Honourable Minister of Communications and Digital Economy in alignment with Executive Order 003 (“EO3”) in support for Local Content in public procurement by Ministries, Departments, and Agencies of the Federal Government of Nigeria (“MDAs”) and more particularly the Executive Order No. 5 for Planning and Execution of Projects, Promotion of Nigerian Content in Contracts and Science, Engineering and Technology (“EO5”).

The key focus areas of NODITS are manufacturing; service and software for the telecoms sector, people and research and development for digital innovation and entrepreneurship. NCC on 24 August 2021, issued a guideline which now requires all telecommunications operators to commence the local production of Subscriber Identity Modules (SIM) cards in Nigeria by February 2022.

This policy captures the aspirations of MTN Nigeria to participate in the development of local content within the Nigerian telecommunication industry in tandem with the policy direction of the Federal Government of Nigeria. The framework of this Policy will enable MTN Nigeria to play a pivotal role in developing sustainable local societies whilst fulfilling its goals of enabling digital and financial inclusion.

MTN Nigeria seeks to promote local content development in Nigeria through procurement, recruitment, skills development, community development, small to medium enterprises, supplier development and ownership transactions. Local content will be promoted by building local capacity through skills development, enabling local supply chains through local procurement while small to medium enterprise development and supplier and local citizen inclusion will be encouraged through local citizen employment and indigenous ownership schemes.

This policy will be supported by an application manual (“local content playbook”) which will stipulate the minimum compliance requirements to implement this Policy. This Policy shall be read in conjunction with other existing MTN Nigeria policies and process documents for sourcing, procurement, and engagement of suppliers such as the MTN Nigeria sourcing guidelines, and the MTN Nigeria Procurement Yellow book.  In the event of any conflict between this Policy, the MTN Nigeria sourcing guidelines and the MTN Nigeria Procurement Yellow book, this Policy shall supersede and take precedence in the areas of such conflict.

This Policy incorporates the requirements of the Nigerian National Local Content Policy, the NOTAP guidelines, NODITS, as well as other relevant federal regulations and directives in all material respects and where this Policy deviates from the extant laws of the Federal Republic of Nigeria, relevant regulations, policies and directives of an authorized agencies of the Federal Government of Nigeria, management shall take steps to ensure that the extant laws of the Federal Republic of Nigeria, relevant regulations, policies and directives overrides the conflicting provisions of this Policy.

MTN Nigeria strives to conduct business in a manner that demonstrates consideration and preference for local content and compliance with applicable national policies, laws and regulations that drive local content, empowerment, or economic development. The terms of engagement of Local Citizens as suppliers or providers of goods and services shall be fair and considerate to encourage more participation,  collaboration and partnership in the areas of manufacturing, services and software, people and human resources engagement and research and development for digital innovation and entrepreneurship.

MTN Nigeria is committed to the fulfilment of its local content strategy and the successful execution of that strategy in all its areas of operation. This local content strategy and implementation shall align with the requirements of the Nigerian National Local Content Policy. The implementation of the local content strategy shall be the responsibility of the MTN Nigeria’s Global Sourcing and Supply Chain Local Team. The implementation plan shall be developed through the prescribed governance process.

It is the policy of MTN Nigeria that preference shall be given to Local Procurement and Local Citizens Inclusion.  The process for Local Procurement and Local Citizen Inclusion shall encourage fair competition, neutrality and transparency in accordance with pre-determined criteria which shall be reviewed from time to time.

MTN Nigeria shall strive to ensure that its payment obligations for products and services are concluded with a local supplier or citizen and denominated in Naira; Nigeria’s local currency. However, this shall not be mandatory for such products and services which given business exigencies are sourced internationally and procured in foreign currency.

The internal process for the provision of advance payment and credit incentives to suppliers of goods and services shall be clearly defined by the CFO and periodically reviewed to encourage the support of local suppliers while balancing the need to protect the commercial interests of MTN Nigeria.

Through the framework of this Policy, MTN Nigeria shall also provide an empowerment structure for credible local entities to enable such entities and individuals to thrive while achieving set transactional targets especially in the focus areas identified under the Nigerian National Local Content Policy.

MTN Nigeria undertakes to expose indigenous players, by its cross-border affiliations and at commercially acceptable terms, to technological advancements and innovations through partnership and collaboration with global/foreign original equipment manufacturers in the manufacturing of telecommunications equipment and participation in the development of initiatives and programmes to promote local ICT services in Nigeria.

MTN Nigeria shall continue to review its expatriate requirements to minimize the utilization of its expatriate quota while ensuring that qualified local human capital is gainfully utilized. There would be periodic checks to monitor expatriate succession planning and the knowledge transfer process in favour of local citizens and employees. A report on the outcome of these checks shall be presented to the Board of Directors on a quarterly basis.

Principles in respect of skills development and employment representation

MTN Nigeria’s local internal skills development practices should empower employees with critical skills and future skills (as defined by the MTN Nigeria talent policy), beyond business-as-usual functional skills development to contribute towards local capacity building aligned to the labour skills demand in Nigeria.

MTN Nigeria’s local external skills development practices should empower community youth with relevant skills so that MTN Nigeria becomes a meaningful contributor to the growth of the telecommunications sector and the broader economy in Nigeria.

MTN Nigeria will continue to prioritize the employment of Nigerians by providing equal opportunities for Nigerians while adhering to applicable local labour laws and/or Regulations.

MTN Nigeria will endeavour to employ qualified Nigerians at all levels of its organization, including its third-party service providers and agents  and shall encourage the third-party service providers and agents   to also employ Nigerians within the parameters of local labour laws and/or Regulations.

In instances where foreign nationals are to be employed  in MTN Nigeria, the following factors are to be considered:

1. MTN Nigeria must ensure that all applicable permits, foreign quota and labour requirements are adhered to.
2. Skills transfer and succession planning must be implemented to ensure that Nigerians are identified and developed to take over the role in line with MTN Nigeria’s expatriate policy. This should be done in adherence to applicable local labour law and/or Regulations.

• A quarterly update shall be presented to the Board of Directors on the progress concerning this.

 

Principles in respect of local procurement and preferential procurement

MTN Nigeria will enable local supply chains through supply chain practices which drive procurement from suppliers that are characterised as local in Nigeria. Local characteristics may include, but not limited to:

1. Suppliers that are locally registered and are tax resident in Nigeria.
2. Suppliers’ entity has a degree of local ownership with equity stake in the hands of Nigerians as may be defined under any applicable law.

• Suppliers that have a degree of value creation delivered in Nigeria.

MTN Nigeria shall set aside a portion of it’s spend for local suppliers.  Determination of the portion to be set aside would take, inter alia, the following factors into consideration:

1. Understanding the baseline and impact to the business.
2. Understanding market maturity and sourcing capabilities.

• Business requirement setup and local supplier availability and capability.

MTN Nigeria will consider unbundling of larger contracts to enable participation of local suppliers where possible, taking, into account the following factors:

1. Mapping current procurement spend along various categories, conducting market maturity assessment and identifying specific categories where there are opportunities to increase local participation factoring in product/service complexity, availability of local suppliers, commercial and technical competitiveness of local suppliers and value creation by local suppliers.
2. Identifying key activities, requirements and costs involved under each category of spend and evaluating potential for unbundling.

• Conducting cost/benefit and risk analysis on the identified contracts which can be unbundled in order to determine value for money (efficiency, effectiveness and sustainability).

1. The local supplier will be periodically assessed in the area of Local Value Creation to ensure they are not acting as vehicles for foreign supplier or as “trading” entities alone.

MTN Nigeria will on a best effort basis encourage its foreign suppliers to drive local participation through some of the considerations listed below:

1. Foreign suppliers should strive to be registered as taxable entities in Nigeria, so they can be active contributors to the local economy.
2. Foreign suppliers should explore business relationship or participatory options with local entities to enable local value creation where possible. The objectives of such business participation would involve setting aside a part of the procurement contract to local enterprises, and development of the local enterprise’s capabilities.

• Foreign suppliers should contribute towards local small to medium business development for both small to medium size businesses which are current suppliers (supplier development) and small to medium business which are not suppliers (enterprise development) but are in the ICT and telecommunication sectors value chain.

1. Foreign suppliers should keep MTN Nigeria abreast of their efforts to empower local enterprises and suppliers. Performance-based incentives may be considered for foreign suppliers which increase their contribution towards local enterprises and suppliers.

MTN Nigeria may choose to modify the Procurement Evaluation Framework to prioritise local supplier participation. This shall be done by adding criteria for Local Supplier Participation.  As a guideline, a minimum of 25% weightage can be added to the procurement evaluation framework depending on the nature of the sourcing event, business requirements and market conditions. The Procurement Evaluation Framework should ensure MTN Nigeria is getting the best value and business requirements are being met.

In understanding the cost implications, preference should be given to local suppliers who are able to deliver equivalent or better Product Quality and/or Service at a competitive price. All local vendors should be involved in competitive bidding such as reverse auctions to ensure best value for MTN Nigeria. The relevant sourcing committee shall have the discretion of determining competitiveness of local suppliers’ price which should be within the margins of 10 – 25% of MTN Nigeria Negotiated Price Book while considering business requirements, market conditions and vendor landscape.

Local Suppliers should in turn contribute towards other local suppliers and Nigeria’s economy. Local suppliers should not outsource or subcontract its contract to non-Nigeria or other foreign suppliers without the approval of MTN Nigeria Procurement function.

Principles in respect of support for small to medium enterprise and supplier development

MTN Nigeria should also drive contribution towards small to medium enterprise (SME) development for businesses which are current suppliers (supplier development) and small to medium business which are not suppliers (enterprise development) but are in the ICT and telecommunication sectors value chain.

Contribution towards small to medium business development may be in the form of either one or more of the followings:

1. Access to markets: Provision of access to markets through procurement contract and introduction to large opportunities in the sector (set asides).
2. Access to financing: Provision of developmental financial/funding awarded either in the form of grants or developmental loans/funds at preferential funding rates ensuring alignment within local legislative and banking requirements. Developmental funding should be done for a limited period under clearly defined conditions as a means of assisting the SME to grow and develop their business.
3. Measures to advance finance to eligible small and medium sized business may also be considered, provided minimum critical factors such as solvency and liquidity; the ability to provide acceptable guarantees and adequate due diligence are performed regarding the past, present and probability of future performance of that entity are duly completed before such an advance is provided.
4. MTN Nigeria operations will not be expected to get financing licences, but may look to small to medium business development partners with relevant licences to execute financial support development instruments

• Non-financial support: Capability development opportunities to build and strengthen the small to medium enterprise operating capabilities gearing them to scale. This should be done in a way that creates an environment for SME to build competencies in business and financial management through avenues such as: Industrial Park with tax incentives within the parameter of local law, business incubation hubs, SME resource guides, mentoring support and use of mobile units for education and information, supplier open days.

Principles in respect of ownership by Nigerians

MTN Nigeria is committed to enabling suitable local equity ownership, including but not limited to broad-based local ownership such as investment by local retirement and investment funds with multiple beneficiaries and/or contributors and local employee ownership.  Each transaction will be determined and structured based on the nature, structure and capabilities of the equity capital market and the related regulatory imperatives.

MTN Nigeria shall strive for optimum Nigerian representation in both local employment and ownership taking into account strategic drivers, MTN Nigeria’s portfolio and business sustainability requirements.

To the extent applicable, participation by MTN Nigeria employees in local ownership will be considered, subject to the applicable MTN Nigeria specific requirements, MTN Nigeria Human Resources Policies, applicable local legislation relating to local employee ownership, among others.