LAGOS, AFRICA: IBM, the world's top technology services firm, is expanding operations in West Africa and sees strong long-term opportunities on the continent despite the global economic downturn, a top executive said on Wednesday.

The global credit crisis has dampened appetite for risk, leading some foreign firms to scale back expansion plans in African frontier markets, but International Business Machines Corp said demand for new technology was growing.

"We are taking a very different approach," Dave Kappos, one of IBM's vice presidents, told Reuters in an interview in Nigeria's financial capital Lagos.

"Our customers are asking us to come in and increase our presence here in order to help them, in the financial services industry, banking, in the telecommunications industry," he said.

IBM, which launched operations in South Africa more than five decades ago, said it was setting up a fully-fledged subsidiary office in Lagos to serve the West African region.

But Kappos gave no details of the planned level of IBM's investment in the continent or specifics of where it would go.

Nigeria, Africa's most populous nation of more than 140 million people, is seen as one of the biggest frontier markets in the world for sectors including telecoms, financial services and retail.

Kappos said demand for IT services was coming both from Nigerian companies -- particularly banks -- seeking to expand across the region as well as from firms moving into Nigeria.

"As these businesses expand they need more robust infrastructure, they need things like back-up and disaster recovery and the things that mature businesses have in the banking and finance sector," he said.

Just as mobile phones reached many rural communities in Africa before they were connected to landline networks, Kappos said there was similar potential for a technology "leapfrog" in bringing cheap internet access to millions via mobile devices.

Nigeria's mobile phone market has grown from scratch to over 45 million subscribers in seven years, making it one of the fastest growing in the world. But its penetration rate is just 30 percent, compared with 76 percent in South Africa.

Kappos said IBM, which has invested some $120 million in sub-Saharan Africa over the past two years, was keen to help reverse the brain drain that has seen many highly-skilled Nigerians move abroad by developing a local IT industry.