BEING TEXT OF A
PRESENTATION BY MRS FLORENCE SERIKI,
AT A WORKSHOP ON THE DEVELOPMENT
& IMPLEMENTATION OF A NATIONAL
BROADBAND STRATEGY FOR GHANA
TODAY, GLOBALIZATION AND RAPID TECHNOLOGICAL CHANGE HAVE
MADE KNOWLEDGE A CRITICAL DETERMINANT OF COMPETITIVENESS
IN THE WORLD ECONOMY.
WITH GLOBALIZATION, THE INFORMATION REVOLUTION, AND
INCREASING DEMANDS FOR A HIGHLY SKILLED WORK FORCE, IT IS
CLEAR THAT NATIONS MUST ACCORD HIGH PRIORITY TO BUILDING THE
CAPACITY TO EFFECTIVELY UTILIZE TECHNOLOGY IN EVERYDAY LIVING.
THE EFFECTIVE UTILIZATION OF NEW INFORMATION AND
COMMUNICATION TECHNOLOGIES WOULD HELP TO MEET THE GROWING
NEED FOR A MORE SOPHISTICATED LABOR FORCE, MANAGE
INFORMATION SYSTEMS, AND CONTRIBUTE TO POVERTY REDUCTION
AROUND THE WORLD
I THANK THE PEOPLE AND GOVERNMENT OF GHANA FOR GIVING ME THE
OPPORTUNITY TO CONTRIBUTE TOWARDS THE NATIONAL IT POLICY
ICT STATUS BEFORE 1992
UP TO 1992,KEY COMPUTER BUYERS INAFRICA WERE BANKS/OIL&GAS
THEY WERE BUYING ONLY FINISHED PRODUCTS – MAINLY COMPAQ &
IBM.ONLY CHEVRON WAS BUYING APPLE MACINTOSH
THE OIL & GAS SECTOR WERE BUYING ONLY FROM THEIR OFF SHORE
THEREFORE THERE WAS NO OPPORTUNITY FOR AFRICANS TO SELL TO
THE OIL SECTOR
ICT STATUS BETWEEN 1992-2002
BY 1992,SOME OF US WERE LOOKING FOR THE OPPORTUNITY TO DO
BUSINESS WITH THE BANKS AND THE OIL & GAS SECTOR
IT WAS DIFFICULT FOR THE BANKS TO BUY DIRECTLY FROM THE LIKES
OF COMPAQ BECAUSE OF LOW VOLUME
IT WAS THEN I TOOK THE ADVANTAGE OF BEING A CHEMICAL ENGINEER
TO APPROACH THE THEN GM TECHNICAL AT THE NATIONAL
PETROLEUM INVESTMENT MANAGEMENT SERVICES (NAPIMS) AND THE
JOINT VENTURE MANAGER.
WE PRESENTED OUR CASE TO THEM AND THEY TOOK IT AS A JOINT
THUS WE GOT SOME CONCESSION FOR OIL COMPANIES TO DO
BUSINESS WITH NIGERIANS THOUGH WE WERE REQUIRED TO HAVE
THE OMATEK STORY
THE STORY AND ORIGIN OF OMATEK STARTED OVER 21 YEARS AGO WITH
THE TRAINING OF BANK EXECUTIVES AND OIL COMPANY EXECUTIVES
I SAW AN APPARENT NEED TO CHAMPION THE USE AND APPLICATION OF
ICT IN OUR DAY TO DAY LIVES
IN 1998,UPON GAINING THEIR TRUST AND CONFIDENCE THE
EXECUTIVES RELIED ON MY EXPERTISE TO SOURCE FOR THEIR PERSONAL
I THEN PROCEEDED TO BECOME A PREMIUM PARTNER FOR THE FOREMOST
FOREIGN BRANDS IN THE LIKES OF COMPAQ, HP, IBM AND APPLE.
IN 1993, AFTER POSTING OVER $1MILLION IN REVENUE FROM SALES OF
THESE BRANDS, OMATEK COMMENCED THE ASSEMBLY OF OMATEK BRAND
OF COMPUTERS FROM SEMI KNOCKED DOWN (SKD) PARTS
THE OMATEK STORY cont’d
THE COMPANY FURTHER DIVERSIFIED ITS BASE AND COMMENCED THE
PRODUCTION OF COMPUTERS AND OTHER COMPONENTS FROM
COMPLETELY KNOCK DOWN (CKD) COMPONENTS
OMATEK IS THE FIRST FACTORY IN AFRICA TO PRODUCE COMPUTER
CASINGS AND SPEAKERS FROM CKD, THE ASSEMBLING OF COMPUTERS
AND NOTEBOOKS ALSO FROM CKD.
THE COMPANY LATER GRADUATED INTO BUYING COMPONENT PARTS
FROM SEASONED FIRST CLASS MANUFACTURERS THAT PRODUCE FOR
OTHER FOREIGN BRANDS.
TWINHEAD, A MAJOR PRODUCER OF NOTEBOOK PARTS PROVIDED THE
BULK OF NOTEBOOK PARTS FOR THE FIRST SET OF LAPTOPS PRODUCED
THE COMPANY FURTHER GRADUATED TO BUYING FROM QUANTA WHO
ALSO PRODUCE FOR THE NOTABLE BRANDS.
PC PRODUCTION AS A FUNCTION
OF SUPPLY CHAIN MECHANISM
Individual PC’s consist of variable parts sourced from producers of
these parts across the globe.
These parts are produced at various degrees of quality for various
categories of Original Equipment Manufacturers (OEMs) with the high
quality component parts being at the top of the ladder
An average producer will procure his raw materials from these sources
after a detailed production planning session to determine the kind and
quality of PC to produce.
Often times, cost of production will involve incidental costs arising
from regulatory charges from country of export.
Cost of variable parts will also be influenced by the Minimum Order
Quantity allowed for purchase.
MINIMUM ORDER QUANTITY
• This represents the limit or purchasing volume required by the parts
factory to ensure production of the component required.
• MOQs vary from company to company and also as you climb up the quality
• For instance, the Mother Board Factory requires a Minimum Order
Quantity of 10,000 units per month.
• The bulk procurement of these parts also attract margins on discount for
purchases, especially taking into consideration the economics of scale
determined by the manner of freight – while it costs an average of $35 to
sea freight one M/B, same will cost an average of $60 by air freight.
• The demand locally for a company’s product will influence growth on
production as well as growth in the quality grade to buy from. This will
influence the overall cost of the finished goods when passed through the
process of assembling.
SOME FACTORS THAT AFFECT
1. Qualified and Competent Human Capital
2. Availability of constant and affordable
3. Access to cheap and long term funding.
4. Strong regulatory framework to protect
industries and their investments.
5. Tax and duties incentives .
6. Policy inconsistency from the Government
7. Innovation, Research and Development
Qualified And Competent Human
•Under-supply of competent and qualified
•Non-availability of trained and competent
technicians for production.
•Absence of a quality assurance framework.
•Absence of clear ICT for the framework on
manpower development and sustainable
Availability of Constant and
•Sustained investment in power generation
and distribution to ensure even access.
•Explore use of alternative energy sources
and create incentives for private sector
investment in power generation,
transmission and distribution.
•Encourage adoption of green power that
will further enhance access to carbon
Access to Cheap and Long Term
•Dearth of knowledge on IT business cycle by
•Absence of Project Management Approach towards
lending and transaction cycle by financial
•Unrealistic terms and conditions for lending to the
•Absence of funding a bane for the growth of
SME’s in the sector.
•Funding as catalyst for the emergence of local
Strong Regulatory Framework to
Protect Industries and their
•Absence of laws and regulatory capacity to
protect local production and even
•Absence of laws to protect local market
from the abuse of foreign goods.
•Business regulation to ensure practitioners
are experienced and capable
“technopreneurs” that can engender change.
Taxes and Duty
• Motherboard (1 container; approx 10,000units)
import charges including VAT paid approx
Ghc 25,000.00 representing 34.5% of CIF
• Hard disk (10,000 units) Ghc 224,900.00; 34.5%
• Memory (10,000 units) Ghc 102,000.00; 34.5% of
• Combo drive (10,000 units) Ghc 269,000.00;
• This is just a fraction of the list of components
The Import/Duty Tax Table
a. COST OF PRODUCT (FOB); C
( based on economies of scale)
b. Freight F
c. Insurance I
d. Custom Duty 0% CIF
e. Processing Fee 1% CIF
f. Ecowas Levy 0.5% CIF
g. Inspection Fee 0,5% CIF
h. NET Charge 4% FOB
i. VAT on NET Charges 15% of NET
j. VAT 15% CIF
The Import/Duty Tax Table
k. IRS 1% CIF
l. Export Dev. Levy 0.5% CIF
m.. Electronic IDF fee GHc 7
n. Ghana Shippers Council GHc 3.5
o. Port Charges 20ft GHc 270
40ft GHc 380
p. Handling Fee 20ft GHc 350
40ft GHc 500
q.Transportation 20ft GHc 300
40ft GHc 450
r. Agency fee 20ft GHc 145
40ft GHc 250
TOTAL 34.5% OF CIF
• Local transport from port to warehouse
• Local transport from warehouse to factory
• Utility bills, electricity, water, etc
• Salaries and other emoluments for factory staff
• Warranty/ replacement costs
We can then imagine how much price reduction we
can pass on to the consumer if the tax component
of 34.5% is reduced even by 15%!
Taxes and Duty Incentives
• A mechanism to safeguard local production by
applying tax incentives and the reduction of VAT
from 15% to 5% will be welcome especially in this
• Import duty waiver(0%) for IT component goods
that are CKD should be instituted to protect local
production and also reduce cost of production.
This was done successfully in Nigeria to aid the
growth of SME’s.
• Freight, handling costs should be reviewed while
government can create incentives for local
production like tax holidays, pioneer status
Government Policy on Computer
• Promotion of local initiatives to encourage PC ownership
should be a matter of priority for government.
• Personal ownership encourages application as well as the
hunger for further knowledge in IT. It also allows for
information access via the net which helps to enhance IT
efficiency across the workforce.
• Examine and institute a policy on local patronage to give
locally produced IT components and hardware preferential
purchase ratio over foreign brand.
• Increase duty and tax for import of finished or SKD
components as against duty waiver for CKD and tax holiday
for locally produced hardware.
Omatek Factory Initiative on
• Launched as part of the Government Assisted PC program
• Own a PC and pay over a period of 12, 18 and 24 months
• Secured a deduction code from the CAGD
• Secured funding for the scheme
• Open to all Civil servants and public workers
• Institutions and students can also take advantage and own
• Promotion of e-learning on our campuses
Innovation, Research and
• Incentives to be introduced to encourage local
adoption of research findings by the industries
for commercial production.
• Companies to assist institutions with sponsorship
and endowment for research and development
purposes in the field of IT.
• Government to institute awards and national
honours for achievers in the field of IT to ensure
continuous research and innovation.
Pricing is a function of various components
Import duty - weight, size & value of
Other taxes - VAT, clearing & agency
If these are taken care of, prices can come
down by 20% as demonstrated
•Factors outlined above that affect
production if carefully managed can
drastically reduce the cost of PC ownership.
•Policy development in line with ICT4D
initiatives will further place IT in the front
burner of all other activities while ensuring
gradual transformation of the real sector