The Chief Executive Officer, Medallion Data Centres, Engr. Ikechukwu Nnamani in this interview with the Managing Editor of Business Remarks, BUKOLA OLANREWAJU addressed how Nigeria can woo attractive investments much needed for the data centres sub-sector growth and the Nigerian ICT sector at large.
Can you introduce yourself and the business?
I’m Engineer Ikechukwu Nnamani, the CEO of Medallion Data Centres. We’ve been operating a data centre business in Nigeria for over 16 years. We got the Pioneer Data Centre Award in one of the Telecom Conferences Award Ceremonies. Medallion Data Centres is one of the first that understood the concept and importance of carrier-neutral data centres, and we’ve spent a lot of time building that ecosystem.
I’m always happy when I see people coming into the space. It means the foundation we’ve laid, people appreciated it and also want to participate in it because it is a needed sector. Our goal is to just keep doing what we are doing. As I said in the past, we are doing a lot to grow the business and the sector for the good of all Nigerian people.
What role is Medallion Data Centres playing in the localization of data?
By providing the infrastructure that enables it, that’s what we do. Data centres are the infrastructures where those servers’ content is hosted. Medallion Data Centres is hosting a lot of critical infrastructures and if these data centres are not there, you cannot keep them in your house. That’s the role we play, in building data centres, and operating them efficiently. We call it the building where content can be located.
Another part of it now is that people should create the content and be willing to host the content in-country because that’s a whole new ball game. Some people for whatever reason are still hosting their content outside but a lot of that is changing. In the past when there were no quality data centres they were hosted abroad, but now that is changing. Although there is still a cost differential, some people believe it is cheaper to host outside than to host in the country. Naturally, that will be there until the volume of the business grows to what it is outside the country.
On investment, how can you quantify the level of investment in the data centre sub-sector in Nigeria’s economy now?
I can only talk about my company, Medallion Data Centres. I know what we have invested without being specific about it. But I can tell that we’ve invested a lot of money in USD over the last one year and we are going to probably invest tons more in the coming year.
Speaking of forex, the volatility, shortage and lack of access have continuously been a concern for ICT Stakeholders. Has the government done anything to alleviate these?
We are the recipient of the problem. But I also know enough about the status of the country that we start running into forexchallengese when inflow is reduced. Oil and Gas remain the biggest part of forex inflow into the country from the government standpoint apart from what the private sector is doing. As it is been reported, there is a lot of oil theft, a lot of all kinds of stuff that are making that revenue drop, unfortunately, this problem will be with us for much longer.
But what we’ve done which goes back into the foreign direct investment is go out there to convince people that there is potential in the country, convince investors that this is a country worth investing in and then we are bringing in forex, we are doing direct foreign investments. All our investments in Medallion Data Centres so far have been in USD and I think to a large extent we are helping to solve that problem. If more companies can do that, then the government wouldn’t necessarily have to keep depending on whatever happens from crude oil sales and all.
The private sector needs to be well-empowered. It takes a lot to convince investors that Nigeria is still worth investing in, given all the stuff you see every day in the press. But some of us so far have been able to do that, we hope that continues and we also hope other companies can do the same.
Between policy and regulation, which one has affected and impacted the data centre operations in Nigeria?
Probably more of policy because the regulation is still been worked on. The data centre space is still not regulated and that’s because it’s seen as a REIT, Real Estate Investment Transaction.
The difference between a data centre building and a hotel is just that in a hotel, people come there to sleep and in data centres, servers come there to sleep if I may be that simply describe. From that standpoint, it is all about implementing the policy on local hosting. Although, there is a policy on local hosting that is not fully implemented. There is a lot of stuff that still needs to be done from the policy standpoint.
Where do you see data centres heading in the next future and what technology will be more relevant and important next year?
The Internet of Things (IoT) whether by 5G or any of the subscribers-based technologies is not important but the internet of things is here to stay. That will drive the new data regenerated and machine-to-machine data generation is seen to be bigger over time than human-to-human data generation. The Internet of Things (IoT) will be the driver of these innovations and it is already here.
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Different services are coming up every day with more companies going into it and more companies putting out solutions that subscribers are embracing. That’s the ultimate although it goes hand in hand. This is because IoT can not exist without data centres, so the more data centres available, the more internet optics services can be implemented and rolled out. Hopefully, the country will benefit from a smarter economy.
The Nigeria banking sector is experiencing huge labour flight, is the data centre space also suffering this. As an expert, how do you react to this?
The current phase of people leaving the country is mostly the youth. There is a scarcity of workforce globally. Different countries are looking for smart people and unfortunately, truth be told Nigeria is currently not the most convenient place to live.
We’ve got issues with insecurity and high inflation, these issues will naturally make a young person if allowed to go use their skills in another part of the world. These countries are aware we have a very long and intelligent workforce, so they are creating windows for people to come.
But it’s not a total loss. The reason is, if you check going back to the issue of forex, foreign exchange coming into the country, I don’t have the exact statistics but I know what the people in diaspora remit into the country is significant. If you are not having that inflow coming back, with people staying outside, working and remitting money to their family and friends here, the situation will even be worse than it is today.
Speaking of skills, the Nigerian education sector curriculum is believed to be far from the market’s current skills. What will you say to it?
Globally, the workforce has changed when people including myself look for people to hire, we are not just interested in what school you attended. I can’t recall the last time while going through someone’s CV and I’m looking at the schools they attended and their grades or result. For me, it’s currently irrelevant.
It’s important and expected to go through formal education to have the minimum education. But I’m more interested in since you left school, what skill have you acquired. This is all over the world, it’s not just in Nigeria. If you go outside, you’ll find out that people are more effective when they acquire 6 months, and 12 months of practical training. If you want to go into software development, you take time to be trained in it. So practical training is key, apart from back in the days when we have very robust Polytechnics that teach you practical stuff, it’s not there anymore.
You made mentioned government intervention for the survival and growth of the sector. Can you just mention two more interventions government need to do to enable a seamless and profitable data centre sector in Nigeria?
I’ve said that one of them is power. Whatever plans they have or do, they have to fix the power situation, and the sooner, the better. What we see and have currently is not sustainable. As I said, some of us could bear the higher cost just to see how it plays out, but eventually, you may be forced to either increase your price, which means that price ultimately is passed down to the subscribers. To avoid that, if government fixes power, a lot of things get fixed, and to me, that is critical.
They need to stabilise the forex. By doing that, it will be easy and smooth when we need to bring in technology to build data centres. That will help speed up the time to implement the skills and infrastructures. We also talked about implementing some of the policies in terms of local hosting, all these will help drive demand. Of a truth, though ultimately the private sector and the citizens will need this, the government need to digitize the running of governance.