Nigeria Contemplates New Restrictions on the Digital Economy

This Newsletter has previously reported on Nigeria’s sudden bans on cryptocurrency trading and Twitter. Now according to Techcrunch, a new bill to reform the country’s technology regulator is concerning the digital economy. The 26-page draft document seeks to amend a 2007 law, in order to address opportunities and threats posed by recent digital technologies. Startup founders, venture capitalists, and policy analysts fear the bill will stifle innovation. Section 6 of the amended bill details the powers accrued to the National Information Technology Development Agency (NITDA).

Some of these include the power to fix licensing and authorization charges, collect fees and penalties and issue contravention notices and non-compliance with the Act. The bill proposes that tech companies making an annual turnover of $200,000 will have to pay a levy of 1% of their profit before tax. Section 20 would give NITDA the right to issue licenses and authorizations for tech companies regardless of their size. The licenses are classified into 3 sections: product, service provider, and platform provider. The agency says it also reserves the right to “enter premises, inspect, seize, seal, detain and impose administrative sanctions on erring persons and companies who contravene any provision of the Act,” subject to a court order.

Meanwhile, Nigeria’s shutdown of Twitter, which came into effect on June 5 has impacted businesses of all sizes, from banks to startups, who use social media for activities like customer service and dispute resolution. The ban has also hit entrepreneurs and vendors who are able to gain visibility through social media campaigns and viral tweets, and the content creators, and marketers who have built a career out of running those campaigns. British firm Top10VPN estimates that the ban has affected around 104.4 million internet users in the country and so far cost the country around $366.9 million.

The firm made the calculations using a tool developed by internet governance watchdog organization Netblocks, and Internet Society, a US advocacy nonprofit.  The tool is based on similar methodologies used by organizations such as the Brookings Institution, a US research organization. So far in 2021, only Myanmar and India have had worse financial losses than Nigeria from internet shutdowns of some form, according to Top10VPN estimates. Uganda, which disrupted internet access in January for a controversial presidential election, is in 4th place, with its shutdown costing around $51.5 million. eSwatini is in the 9th position due to its internet shutdown in July during the pro-democracy protests.