In most developing nations like Nigeria, the nascent software industry is faced with several challenges among which is a lack of patronage, dimming prospects in the sector. For reasons such as a perceived superior quality, governments and corporates in the country opt to spend up to $1 billion on foreign software products annually, while an additional $400 million is expended on software license renewals.

While the argument for superior expertise may hold water, foreign software is not without its lapses. Most of the solutions are designed in line with international best practices and with a global perspective, failing to take into consideration distinct features of each market they are to serve. As a result, most banks still have to pay a lot of money for customization, to meet the local requirements.

It is this gap that Union Systems Limited, an industry leader in financial software, is capitalizing on with its indigenous trade finance software, Trade-X  in Nigeria. In an interview with Ventures Africa, Chief Executive Officer, Chuks Onyebuchi discusses problems with international software in local markets, how his firm is helping to address this, promoting indigenous software in Nigeria as well as challenges and prospects for the emerging industry.

Ventures Africa (V.A): What inspired your trade finance software Trade-X, and how is it a game-changer?

Chuks Onyebuchi (C.O):  Before I go into the question, I will just give you a little background of the company.  Union Systems Limited is a software company. Our focus is on delivering software for banks. And in the financial sector, we deliver software for Trade finance operation, Treasury and other services.

We have partnered with many international blue-chip companies and have over time discovered that most of the software applications by these blue-chip international companies out-of-the-box does not meet the requirements of the local market. This is because these foreign applications are developed to serve a global market without consideration to the specific needs of various countries like Nigeria. Nigerian banks have a peculiar way of doing their things largely led by CBN regulations. So, if you implement a foreign software out of the box in Nigeria, you won’t solve the Nigerian problem.

In our over 15 years’ implementing foreign trade finance software application for banks in Nigeria, we observed that even after go-live in each of the implementations there were still gaps in each bank’s requirements. The banks therefore have to resort to manual processes to close these gaps.

As a Company, we decided to close the gap created by these local peculiar requirements with Trade-X. Specifically, Trade-X is the solution to all the peculiar problems faced in the Nigerian trade finance operations. So, we can plug Trade-X to any international trade application or the trade module of the bank’s core banking application to meet the bank’s full requirements. 

V.A: How were you able to promote the adoption of Trade-X? I imagine the clientele already understood what it was about so there was no problem when it came to using them for banking operations?

C.O: Yeah, in fact, the moment the market got to hear about Trade-X, it immediately gained market acceptance. The reason is clear, they have never seen any trade application that covers the Nigerian trade operation. 

So, what we’re telling them now is, if you have a core banking and you have a trade module in the core banking that is sufficient because the trade module of a core banking will do the traditional trade operations any international trade system will do. So if you can do LC or Bills, these are traditional trade products, what you need is to plug Trade-X to that trade module in your core banking and you are home and dry, you can run your operation front to back.

V.A: We would like to know what other issues were with the international system, beyond meeting local requirements.

C.O:  In addition to not matching local operations, there are other challenges banks have in running an international system. For instance, you know, every bank will need a NOTAP (National Office for Technology Acquisition and Promotion) certificate to be able to transfer foreign currency to the company abroad. That’s a huge problem with local banks. So because NOTAP has said look, for you to be able to transfer any money as it relates to software, you must come to NOTAP, apply for a certificate, get that processed, and when NOTAP certificate is issued, then you can then buy foreign currency and transfer. The documentation involved in getting the NOTAP certificate is heavy, so no bank wants to go through it. Banks were finding it difficult to obtain the certificate. The whole idea of NOTAP certificate is to encourage indigenous software and discourage patronizing foreign software.

Now, another area is banks pay a lot of money to customize this international system in order to meet the local requirements and most times in a bid to customize this, they still don’t get it right. 

There is also the issue of post implementation support. Getting adequate support from foreign companies is always a challenge. The total cost of running the application is usually horrendous. 

V.A: We understand you have been able to adapt your product Trade-X in a way that helps banks comply with the central bank’s recently launched automated export process, via the trade monitoring system?

C.O: The CBN forms are very fundamental in the trade finance operations in Nigeria. We knew CBN will in time automate all the forms, they started with Form M. Form M are downloaded from the CBN single window for processing. 

Trade-X was built in a way that every CBN form can easily be automated whenever a policy is implemented. When the automation of TRMS was announced, Trade-X was ready to plug into TRMS immediately.  

V.A: You were the winner of the inaugural Engineer Simeon Agu Prize for Best Software Entrepreneur of the year 2019, what does this award mean to you?

C.O: The award means a lot to me because Mr. Simeon Agu was my boss. I worked in his company, Computer Systems Associates (CSA) now Neptune Software Group for four years and the reason I am an entrepreneur today is because of him. I was inspired by the way he works, his perseverance, dexterity and never say die attitude to work. If you worked in CSA, you will know that it was one company where you rate where you belong in your profession when it comes to software development and software business. 

While I was at CSA, I was in charge of development, I had about 30 people reporting to me. I remember one of those days Mr. Agu came to me and said, “Look, I think you come across to me as somebody who will do very well in sales.” When he said that I thought he wanted to fire me because no developer wants to leave their comfort zone of development. So when you tell a developer that you want him to go and sell, it means that you want to sack him. That’s the feeling I had. 

Little did I know that Mr. Agu saw beyond what I was doing, the potentials in me, and where I will finally end up and was preparing me to come and head the sales department, but I didn’t see it at that time. So, this award means a lot because I see Mr. Simeon Agu as a mentor. He is the guy that made me and taught me the act of entrepreneurship. May his soul rest in peace.

V.A: Let’s talk about your journey as a Techpreneur alongside your experience working with several banks. What were some of the biggest challenges that you had?

C.O: Well, one of my biggest challenges was dealing with the reservation most banks used to have about buying indigenous software. In the past, banks did not believe in Nigeria software which made it difficult to develop software solutions for Nigeria banks. We are currently seeing a shift with more banks starting to adopt indigenous software to solve their problems. We visited the minister of Communication and Digital Economy recently and what he said made a lot of sense to me and I used it recently. He said, “Don’t ever say local software, say indigenous software” because local in Nigeria means inferior.

Rather than seeing local as the opposite of foreign it is seen as the opposite of the original. So each time we want to talk about software, we should say indigenous software which is more acceptable.

Also, we are still dealing with the premium most Nigerian banks place on indigenous software. Most banks don’t believe indigenous software should attract good fees. They believe it is inferior and as a result should be cheap which is not always the case.  

 V.A: Since we’re talking about the perception that people have when dealing with indigenous software, where would you say the Nigerian software industry is headed? Let’s say within a five to a ten-year window?

C.O: First of all, we need to do something to stop the huge capital flight from Nigeria resulting from buying foreign software. Buying foreign systems is one thing Nigeria has to stop with some level of urgency. Today in Nigeria, the total money spent on foreign software is over $1 billion per annum. You can imagine the effect the money will have on our economy if it is staying in Nigeria. And not only that, this $1 billion has the potential within four years to move up to $6 billion every year. And if $6 billion dollars is being injected in the Nigerian economy through Software, youth unemployment will be reduced and the standard of living for IT professionals will improve because more IT companies will be empowered to offer better employee benefits. Also,  our national security will be under our control. So that’s where we have to start. 

To execute this, we need to make it difficult for people to buy foreign software. The government has to come up with regulations where anybody buying foreign software will be levied a huge tax if that software has an indigenous equivalent. Then if you’re buying an indigenous application, you will get some tax waiver or rebates.

As a matter of urgency, our federal ministries and parastatals should stop using foreign systems for national security reasons. This need to be quickly implemented. 

Another area is that we need to introduce open-source standards for research and development in our tertiary institutions, to start building the knowledge base from that level. These are some of the areas that if you look at very closely we can work on.

V.A: What other strategies do you think can be put in place to make Nigeria a more enabling environment for software development? If we’re able to provide all of those you’ve spoken of, policies, upskilling within tertiary institutions and other aspects of the educational sector, is there anything else you want to add?

C.O: Well, the government has to be the chief marketing officer of our indigenous software. So, when the President or government officials are going out of the country to other African countries, they should sell our indigenous software to these Countries. This would showcase the capabilities of Nigerian software, and with time, African countries would depend on Nigeria for their software needs. This will make our economy better and create more jobs for our youths. 

V.A: What are some of the accomplishments you’ve made so far this year? Are there pending projects you want to talk about?

C.O: We started 2020 very well. Early in the year we closed a deal with one of the tier one commercial banks on our Trade-X application and recently we closed another deal with a leading merchant bank. We have also been working tirelessly to close additional deals and we are receiving positive news about them. We have some new products in development which we believe will revolutionize the trade finance market. Our products are one of a kind in that we have achieved the automation of various trade finance processes that were previously considered impossible.

V.A: Does Union Systems have any expansion plans?

C.O: Yes, we’re looking to expand our operations to other parts of Africa starting with East Africa. In addition to our products, we have international partners we work with and represent in Africa whose business we will continue to grow in the region. We are also looking to increase staff strength significantly before the end of the year. 

V.A: Would you say the problem of bridging the gap between international software and local banks is being solved in Africa? And what more needs to be done?

C.O: Well, it’s not yet solved as long as we are still largely dependent on international software. The first thing we need to do is to set a deadline to the transition from foreign to local software in Nigeria just like India did. What India did was to give their software industry an ultimatum. Within a number of years, they mandated the software industry to come up with every application that will address the needs of every sector in India. When they started releasing these software, the government put a high tax on companies buying foreign systems. That was how India developed its local software products which they started exporting and became a world power in software. So, a similar thing needs to be done in Nigeria, we need to take this seriously. 

Software is the new oil and with investment and focus on this industry, it will grow to easily and confidently replace our comfort zone, the crude oil revenue.