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  1. 1. The Challenges of Space Enterprise in Nigeria. Edward OmowaIntroductionA space development proponent typically uses the spin-of benefitsderivable from space science and technology projects as basis forinvestment. In the case of Nigeria, this is followed with promisesthat the outcome will open new frontiers to poverty alleviation,eradication of social services. While these reasons are arguable,space enterprise is meeting these objectives in developed countries.If the economic and social benefits are this attractive, why aredeveloping countries finding it difficult to embark on the enterprise?The assertion being made by space development advocates is thatthe basic understanding required already exists or can be developedfrom available science and technology. True as this may be, thepolitical and economic well-being of the state involved need to betaken into consideration. Basically, we depend on people other thanour relations to satisfy our wants. The responsibility for the systemof want satisfaction revolves around a political authority whose will
  2. 2. goes a long way in determining this satisfaction. In other words,there is the need to advice the statesman on how s/he could bestmanage the economic affaires of the state so that the wants of thecitizenry particularly their basic needs could be met. Therudimentary understanding of the above is necessary beforerealistically planning for a space project in a developing economy.This theoretical analysis is a common basis for developmentaltheory.Literatures reveal that only a few considerations have been given tothe political economics of space development projects. Rather, mostspace entrepreneurs have chosen to describe the exciting scienceand engineering possibilities with the attendant spin-of benefits. Itis very crucial for a developing country to embark on adequateeducation and orientation of its citizenry if any space project is togain its attention, more so when the citizens are adjudged to bepoor by international standards. Both elite and mass public opinionmachineries need to be mobilized to generate the support necessaryfor such a project to be developed. However, much more convictionis required in order to gain support on appropriating funds to the
  3. 3. project when majority of the population is jobless and hungry. Whatneeds explanation are the rationale motivating investors to risktheir capitals in opening a very distant and completely uninhabitedfrontier that is subject to extreme environmental conditions. Whyshould an investor risk the enormous capital necessary to realizethese dreams? Most often, space development businessmentypically respond to this question by itemizing the likely economicbenefits derivable from space. After the initial capital investmenthas been put in place, there is the need to continually appropriate apercentage of public funds to the project funds to the project untilfruition. it should be noted, however, that the technology andpersonnel for space projects are less in doubt than is the necessarycapital investment.Capitalization: a major problemIt is herculean a task persuading investors to risk enough funds infinancing space development projects such as launchingcommunication satellites. Investors and leaders seek to maximizeeconomic returns from capital wile taking little or no risk at all; thisis the reason for the proliferation of buying and selling in developing
  4. 4. countries’ economies like Nigeria’s. since capital cost is higher forhigh-risk investments, persuading investors and lenders to partwith their capital requires making credible promises of betterreturns than they would have received on alternative investmentwith less or commensurate risk during the same period. Apart fromthe fact that space development with less or commensurate riskduring the same period. Apart form the fact that space developmentbusiness might not attract enough investors because of the largecapital investment required, it is often confronted with the risk thatthe business might not make good returns as the technology mightfail to work as projected. This is even worse with the lenders whoare often skeptical of the business yielding good returns. In otherwords, the upfront capital investment necessary to proceed withspace development projects tends to be relatively large and takes arelatively long period of time before generating cash flows or profits.No matter the assumption, attracting capital for projects usingproven technologies (like rocketry and communication satelliteslaunching) remains difficult. Even. The idea of borrowing fromcommercial banks is not attainable, hence the need for governmentparticipation in economic space development.
  5. 5. Nigeria’s experience in the space industryNigeria made is intention of going into the space industry known atthe ECA/OAU inter-governmental meeting in Addis Ababa, Ethiopiain 1971. As a follow-up, it established the National Space Researchand Development Agency (NASRDA) with the sole aim ofestablishing a “fundamental policy for the development of spacescience and technology development in Nigeria” by approving heNational Space Policy and Programme. The scope of the policy to beimplemented by the agency is enumerated below:  The study of basic sciences in order to lay the foundation for deriving maximum benefits from the nation’s participation in the space enterprise.  For the attainment of space capabilities, Nigeria’s efforts should focus on research and rigorous education, engineering development, design and manufacture, particularly in the areas of instrumentation, rocketry and small satellites as well as in satellite data acquisition, processing, analysis and management of related software.
  6. 6.  The establishment of a national earth observation station for remote sensing and satellite meteorology data acquisition. Such an infrastructure will enhance the indigenous ability to adopt, modify and create new techniques for national resources inventories, monitoring, evaluation and management.  The provision of efficient, reliable and adequate telecommunications services in Nigeria in order to enhance the growth of the industrial, commercial and administrative sectors of the economy.From the above, it is obvious that the Nigerian Government hasshown interest in, and continued to develop space technology in itsbelief that its resources can be more effectively developed for thebenefit of its citizenry by meeting the Millennium DevelopmentGoals (MDGs). It also saw the need to reduce poverty, hunger anddiseases through improved agricultural production. Improvedhealthcare delivery, a more active mining sub-sector effectivecommunication network, environmental protection, goodgovernance and conflict resolution not only in Nigeria but also on
  7. 7. the African continent. It is, therefore, very important that thegovernment participates in space development for such programmesto succeed and sustainably too. This is visible in the country’sefforts in the successful launch of Nigeria sat-1 which have beenproviding data for resource mapping and environmental monitoring.With the satellite’s participation in Disaster MonitoringConstellation (DMC) with other satellites belonging to Algeria,china, turkey and the UK it has provided an opportunity forknowledge sharing in Africa. Convinced that the NigComSat- 1communication satellite would provide job opportunities for over150,000 engineers and technicians through telecommunicationsservices provides, and enhance the growth of innovation services inthe areas of e-commerce, e-education, e-government and tele-medicine. It was put into orbit in May 2007, but was unfortunatelylost towards the end of 2008. In spite of this setback, NigeriaSat-2is billed for launch in late 2010. All the above have basically beenthrough public funding, although insurance coverage is the majorcontribution from the private sector; private sector participation isstill significantly low in Nigeria. The idea of capitalization fromcommercial banks or the chance of attracting enough funds form
  8. 8. the private sectors is still elusive, apparently because the periodbetween the initial investment and the economic payoff is far longerthan contemplated in an average business plan; this is consideredunattractive on Nigeria ‘s economic platform. It is the opinion ofsome technocrats that private enterprise and unfettered market arecapable of overcoming almost any economic obstacle. It is on thispremise that the administration of former president OlusegunObasanjo believed in and pursued its space science and technologydevelopment agenda to the present level with adequate publicfunding. Of course many private sector concerns have directly orindirectly benefitted from the outcome. In addition to the factorssuggested for Africa’s space policy to be realistic, the issue ofprivate participation in space enterprise funding or even borrowfacilities from such government programmes, it will be totally out ofplace to classify business efforts here as ‘private’ or public. Rather itshould be seen as an avenue to invest and get returns oninvestment with minimal risks, just like any business venture.Space enterprise should, therefore be seen and understood asmassive public works project which requires huge funding in an
  9. 9. economic environment conducive enough for private firms to investin and profit from.ConclusionsThe fundamental problem in opening any business frontier is thedearth of funds. There is no gainsaying the fact that the governmentis better at financing large projects, while encouraging privatesector participation through the introduction of incentives andappropriate regulations geared towards attracting more investment.Effective conviction and lobbying should also be applied in engaginghe citizenry in a participatory role. With the current globaldownturn in economy, this is the right time for developingcountries, Nigeria inclusive, to look inwards and utilize spacetechnology to optimally develop their hitherto untapped orabandoned economic resources. Nigeria has been running aneconomic system that is completely dependent on oil and gas, todetriment and complete neglect of agricultural and mineral sectorswhich had been the mainstay of its economy. This is the time toopen up other promising sectors of the economy in order to survivethe global slide.
  10. 10. Reference 1. McLUCAS, j. l., 1991. Commerce. Harvard University Press, Cambridge. 2. Simonoff, J., 1997. Financing of space business. In: D. G. Dallmeyer and K. Tsipis, (Eds.) Heaven and Earht: Civilian Uses of near-Earth Space. The Hague Kluwer Law International, pp. 69-82. 3. Boroffice, R. A. and Akinyede, J. O. 2005. Space Technology and Development in Africa and Nigeria’s experience. National Space Research and Development Agency, Abuja, Nigeria, 82p. 4. Central Bank of Nigeria. 2004. CBN Annual Report and Statement of Accounts for the Year ended 31st December, 2003. Central Bank of Nigeria April 2004, 182p. 5. Akinyede, J. O. 2004. NigeriaSat-1: A unique tool for sustainable socio-economic development in Africa. Paper presented at the 5th African Association of Remote Sensing of the Environment, Nairobi, Kenya, October 2004, 10p. 6. National Space Research and Development Agency. 2005. Nigerian Communication Satellite (NIGCOMSAT-1) project outline. A publication of the National Space Research and Development Agency, Nigeria, 24p. 7. Boroffice, R. A 2008. The Nigerian space programme: an update. African Skies, No. 12, October 2008, pp. 40-45. 8. Abiodun, A.A. 2008. Future trends in the global arens: Challenge and opportunities for Africa. African Skies, No. 12, October 2008, pp.12-22.