Nigeria at the mercy of software pirates
By Kokumo Goodie, Lagos, Nigeria
When he spoke, his mien betrayed his emotion: Emmanuel Onyeje, Country Manager, Microsoft Nigeria, lamented that Nigeria was losing billions of naira annually to the menace of intellectual property theft.
According to him, it is not only software that is pirated, films, music and all every other things are pirated and sold at very ridiculous prices in the country.
Undoubtedly, the major problem facing the software and entertainment industries in Nigeria is piracy. It is estimated that nine out of every ten CDs, VHS and DVDs circulating in Nigeria are pirated. Piracy impacts negatively on the growth of the creative industry in Nigeria and on the national economy as a whole.
Piracy with impunity
A visit to the notorious Computer Village, Ikeja, Lagos and Alaba International Market in the suburb of the state speaks volumes of how the illicit trade is carried out with impunity.
According to Professor Uche Ewelukwa-Ofodile, of the University of Arkansas School of Law, United States, piracy stifles creativity, discourages foreign investment in the country, and diverts revenue that should accrue to the government. Worse, the creation of more capital and economic growth is impeded, an unfortunate scenario given that the entertainment industry is a potential export earner for Nigeria.
It is estimated that Nigeria has the highest rate of piracy in sub-Saharan Africa. A recent study revealed that commercial value of unlicensed software installed on Personal Computers (PCs) in the country hit USD251 million mark in 2011 as 82% of software deployed on PCs during the year was pirated.
This rate has not abated. A report by Business Software Alliance (BSA) showd that it has remained so since 2010 and stands at almost double the global piracy rate for PC software, which is 42%.
Havocscope's Global Index of Illicit Market puts the market value of counterfeit and pirated copies of three products (books, software and music) in Nigeria at USD160 million. Software alone accounts for USD100 million, followed by music (USD52 million) and books (USD8 million). The entertainment industry is not the only industry threatened by piracy. Intellectual property protection is also vital to other sectors of the Nigerian economy including, the textile and clothing sector, the manufacturing sector, the electronics sector, and the pharmaceutical sector,” he said.
Speaking at a forum in Lagos, Serge Ntamack, Intellectual Property Manager, Microsoft Anglophone West Africa, disclosed that a report by IDC research group has shown that the rate of piracy in Nigeria has now hit 83%, with annual financial loss standing at a whopping USD130 million. “It affects cable television, music and movies, books, pharmaceuticals, hardware/white goods producers and others,” Ntamack said.
But poverty, greed, and accessibility of products may be factors encouraging the trade to flourish. According to a study by the International Data Corporation (IDC) and BSA, the economic recession that swept across the world years back may have pushed up software piracy levels in Nigeria and other developing nations, thus exposing more Nigerians to prosecution, depriving government of taxes which accrue from licensed software.
John Gantz, chief research officer at IDC, had observed that consumers with reduced spending power may hold on to computers longer, which would tend to increase piracy because consumers are more likely than other types of PC users to load unlicensed software on older computers.
A handful of banks, PC companies and vendors have come up with instalment payment schemes for PCs and laptops which come with legal software and internet access. These schemes have been encouraging the purchase of legal software and growing internet penetration in Africa's most populous country.
Massive informal PC market
In Nigeria, formal sector PC sales are put at about 250,000 annually while it is estimated that for every PC sold in the formal market, 15 are sold in the informal market. This puts annual informal market PC sector sales estimates at 3.75 million and the total annual figures for formal and informal market PC sales in the country at 4 million units.
Virtually all the PCs and laptops bought in the informal market are run on pirated software. While a unit of licensed operating systems cost about N50,000, the pirated version of the same would cost about N300 or less. Microsoft and the local arm of the BSA in Nigeria have repeatedly advised Nigerians to use only licensed software so as to avoid litigation and to help grow the local industry and generate taxes for the country. "Reduced buying power is only one of many factors affecting software piracy," Gantz noted in the report.
Localisation as a solution
Among other factors affecting PC software piracy, the global spread of Internet access, is driving up piracy, with IDC projecting 460 million new Internet users coming online in emerging markets in the next five years. Growth in the number of consumers and small businesses will also bring more high-piracy users into the fold.
John Oboro, general secretary, Computer and Allied Products Dealers Association of Nigeria (CAPDAN) says the production of software that is not tailored to the local economy may just thwart efforts to fight piracy.
According to him, CAPDAN had made suggestions on how to stop software piracy to Microsoft, lamenting that the software giant had largely ignored the body's suggestions.
Oboro says: “Microsoft knows where the problem lies, the firm is just being economical with the truth. If you are not producing software tailored to the kind of economy we have here, then you are not helping matters, if you want to reduce the piracy menace, you should be able to address the financial positions of those who are buying your products.
If you want me to buy Microsoft software for a system for that high price, and there is somebody lurking around the corner to give me the same product for far less the price of the original, who will I patronise?”
Of course, the one that is pocket-friendly,” he explained.
According to him, affordability and accessibility were two different factors from cost. “If for instance, there is software that you need to use to drive a system and that software goes for N10,000 and the system it is going to drive goes for N12,000 (fairly used systems are predominantly used now) not many will go for it.
This is because most of the systems people use are fairly used and they don't cost as much as some of the softwares that will be used to drive them. If I am going to buy a small system that I will use in a small school for N12,000, and the original software is N10,000 and there is an alternative that will cost only N200 and do almost the same thing. Will I not go for it? We have spoken several times over this issue but it seems nobody is listening.
Even when the president of Microsoft came to Nigeria, we made these issues known to him. Some of the issues remained unattended to. We showed him that as an association, we meant well, we showed him photos of the items we seized and destroyed. We have also suggested training programmes for those who are involved in the piracy thing but nothing has been heard.
We have also suggested the kiosk system to de-congest the market because we are appalled by the sheer number of able bodied men selling pirated softwares. We suggested that they be trained and discouraged from the business and be put on the road map by selling genuine software,” he said.
Determined to combat the menace, Microsoft launched the Microsoft Office African Edition and commissioned an information centre at the heart of the notorious Computer Village. But Oboro says the information centre will not work.
“Information centre to do what? To drive whose interest? How many people will go to that information centre? The boys selling the pirated software are on the streets. The only thing Microsoft does is to galvanise officials of the Nigeria Copyrights Commission (NCC) to be harassing everybody around.
Why can't the company galvanise the same body to look for the cartels behind the trade and leave the boys on the street? These boys selling pockets of pirated software are not the people behind the trade. There are people behind this business, why can't they go after them. They are the big masquerade, these boys are just errand boys,” he said.