1. The Challenges of Space Enterprise in Nigeria.
Edward Omowa
Introduction
A space development proponent typically uses the spin-of benefits
derivable from space science and technology projects as basis for
investment. In the case of Nigeria, this is followed with promises
that 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 are
developing countries finding it difficult to embark on the enterprise?
The assertion being made by space development advocates is that
the basic understanding required already exists or can be developed
from available science and technology. True as this may be, the
political and economic well-being of the state involved need to be
taken into consideration. Basically, we depend on people other than
our relations to satisfy our wants. The responsibility for the system
of want satisfaction revolves around a political authority whose will

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 best
manage the economic affaires of the state so that the wants of the
citizenry particularly their basic needs could be met. The
rudimentary understanding of the above is necessary before
realistically planning for a space project in a developing economy.
This theoretical analysis is a common basis for developmental
theory.
Literatures reveal that only a few considerations have been given to
the political economics of space development projects. Rather, most
space entrepreneurs have chosen to describe the exciting science
and engineering possibilities with the attendant spin-of benefits. It
is very crucial for a developing country to embark on adequate
education and orientation of its citizenry if any space project is to
gain its attention, more so when the citizens are adjudged to be
poor by international standards. Both elite and mass public opinion
machineries need to be mobilized to generate the support necessary
for such a project to be developed. However, much more conviction
is required in order to gain support on appropriating funds to the

3. project when majority of the population is jobless and hungry. What
needs explanation are the rationale motivating investors to risk
their capitals in opening a very distant and completely uninhabited
frontier that is subject to extreme environmental conditions. Why
should an investor risk the enormous capital necessary to realize
these dreams? Most often, space development businessmen
typically respond to this question by itemizing the likely economic
benefits derivable from space. After the initial capital investment
has been put in place, there is the need to continually appropriate a
percentage of public funds to the project funds to the project until
fruition. it should be noted, however, that the technology and
personnel for space projects are less in doubt than is the necessary
capital investment.
Capitalization: a major problem
It is herculean a task persuading investors to risk enough funds in
financing space development projects such as launching
communication satellites. Investors and leaders seek to maximize
economic returns from capital wile taking little or no risk at all; this
is the reason for the proliferation of buying and selling in developing

4. countries’ economies like Nigeria’s. since capital cost is higher for
high-risk investments, persuading investors and lenders to part
with their capital requires making credible promises of better
returns than they would have received on alternative investment
with less or commensurate risk during the same period. Apart from
the fact that space development with less or commensurate risk
during the same period. Apart form the fact that space development
business might not attract enough investors because of the large
capital investment required, it is often confronted with the risk that
the business might not make good returns as the technology might
fail to work as projected. This is even worse with the lenders who
are often skeptical of the business yielding good returns. In other
words, the upfront capital investment necessary to proceed with
space development projects tends to be relatively large and takes a
relatively long period of time before generating cash flows or profits.
No matter the assumption, attracting capital for projects using
proven technologies (like rocketry and communication satellites
launching) remains difficult. Even. The idea of borrowing from
commercial banks is not attainable, hence the need for government
participation in economic space development.

5. Nigeria’s experience in the space industry
Nigeria made is intention of going into the space industry known at
the ECA/OAU inter-governmental meeting in Addis Ababa, Ethiopia
in 1971. As a follow-up, it established the National Space Research
and Development Agency (NASRDA) with the sole aim of
establishing a “fundamental policy for the development of space
science and technology development in Nigeria” by approving he
National Space Policy and Programme. The scope of the policy to be
implemented 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.  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 has
shown interest in, and continued to develop space technology in its
belief that its resources can be more effectively developed for the
benefit of its citizenry by meeting the Millennium Development
Goals (MDGs). It also saw the need to reduce poverty, hunger and
diseases through improved agricultural production. Improved
healthcare delivery, a more active mining sub-sector effective
communication network, environmental protection, good
governance and conflict resolution not only in Nigeria but also on

7. the African continent. It is, therefore, very important that the
government participates in space development for such programmes
to succeed and sustainably too. This is visible in the country’s
efforts in the successful launch of Nigeria sat-1 which have been
providing data for resource mapping and environmental monitoring.
With the satellite’s participation in Disaster Monitoring
Constellation (DMC) with other satellites belonging to Algeria,
china, turkey and the UK it has provided an opportunity for
knowledge sharing in Africa. Convinced that the NigComSat- 1
communication satellite would provide job opportunities for over
150,000 engineers and technicians through telecommunications
services provides, and enhance the growth of innovation services in
the areas of e-commerce, e-education, e-government and tele-
medicine. It was put into orbit in May 2007, but was unfortunately
lost towards the end of 2008. In spite of this setback, NigeriaSat-2
is billed for launch in late 2010. All the above have basically been
through public funding, although insurance coverage is the major
contribution from the private sector; private sector participation is
still significantly low in Nigeria. The idea of capitalization from
commercial banks or the chance of attracting enough funds form

8. the private sectors is still elusive, apparently because the period
between the initial investment and the economic payoff is far longer
than contemplated in an average business plan; this is considered
unattractive on Nigeria ‘s economic platform. It is the opinion of
some technocrats that private enterprise and unfettered market are
capable of overcoming almost any economic obstacle. It is on this
premise that the administration of former president Olusegun
Obasanjo believed in and pursued its space science and technology
development agenda to the present level with adequate public
funding. Of course many private sector concerns have directly or
indirectly benefitted from the outcome. In addition to the factors
suggested for Africa’s space policy to be realistic, the issue of
private participation in space enterprise funding or even borrow
facilities from such government programmes, it will be totally out of
place to classify business efforts here as ‘private’ or public. Rather it
should be seen as an avenue to invest and get returns on
investment with minimal risks, just like any business venture.
Space enterprise should, therefore be seen and understood as
massive public works project which requires huge funding in an

9. economic environment conducive enough for private firms to invest
in and profit from.
Conclusions
The fundamental problem in opening any business frontier is the
dearth of funds. There is no gainsaying the fact that the government
is better at financing large projects, while encouraging private
sector participation through the introduction of incentives and
appropriate regulations geared towards attracting more investment.
Effective conviction and lobbying should also be applied in engaging
he citizenry in a participatory role. With the current global
downturn in economy, this is the right time for developing
countries, Nigeria inclusive, to look inwards and utilize space
technology to optimally develop their hitherto untapped or
abandoned economic resources. Nigeria has been running an
economic system that is completely dependent on oil and gas, to
detriment and complete neglect of agricultural and mineral sectors
which had been the mainstay of its economy. This is the time to
open up other promising sectors of the economy in order to survive
the global slide.

11. 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.