Nigeria's dangerous new bill threatens the technology sector

Death, taxes, and the sheer stupidity of the Nigerian government

Rent-seeking [Economics] - Rent-seeking is the effort to increase one's share of existing wealth without creating new wealth.

The set up of the Nigerian government is such that it never is under any pressure to create anything meaningful — no, you can’t count corruption. Thanks to vast reserves of oil, it can sit on its ass and let multinational oil companies do the work while it takes its share. It’s the primary reason why the government has never cared about expanding the tax bracket or efficiently providing services to the public — instead, every year, it looks to extract the most it can from the small number of people in the tax bracket. The more you think about it, the more the Nigerian government looks and sounds like the NURTW agbero at your bus stop — relentless parasites who only want to harass and frustrate so they can get their own “cut” without providing value. 

In the last few years, the oil revenue which Nigeria depends on so much is sorta drying up, and while we talk a lot about diversifying the economy, it’s incredibly difficult to break old habits. A government which has never learned to create value will not suddenly pick up the skill when the chips are down; instead it will double down on old patterns. It will increase VAT, propose taxes on anything and everything, and be on the lookout for new people and sectors it can harass for its cut. Naturally, since we’ve been hearing how technology is the new oil, you already knew what was coming. 

The Nigerian government when it started hearing that tech is the new oil 

Enter: 

The Worrying Proposal To repeal National Information Technology Development Agency (NITDA) Act

Yesterday, details of the new bill to repeal the NITDA act of 2007 and replace it with a law that will regulate information information technology systems and the digital economy became public. The provisions of the bill are worrying.

Here are some of the provisions which immediately gave me pause:

1) The Agency shall by Regulation issue licenses and authorisations for operators in the information technology and digital economy sector, and such regulation shall provide for licensing and authorisation criterian including renewal, suspension, and revocation conditions to promote free-market operation and competition, among others. 

(2) The Agency shall determine and register operators in the information technology and digital economy sector. Such register shall be published. 

(3) Any person or body corporate who operates an information technology or digital economy service, product, or platform contrary to the provisions of this Act, commits an offence. 

TL;DR: Believe or or not, NITDA is pushing for the right to licence all operators in the technology sector. Those licences won't come cheap. 

In true Nigerian fashion, NITDA's bill protects itself from any lawsuit brought by the public. It also protects officials of the agency from being sued as well.

I know it's hard to believe, but this bill gets even worse. NITDA is proposing a developmental bill which will be funded by - wait for it - a levy of one per cent of the profit before tax of companies and enterprises with an annual turnover of N100, 000,000 and above.

It's hard to understand this new bill, given that the technology sector has been engaging the government and its officials in the past year for the passage of a startup bill. While I and many observers have often accused startups of not engaging or lobbying the government, I always thought that the startup bill was a step in the right direction. But clearly, all that lobbying isn't doing much to keep bad actors a.k.a the government at bay.

There's only one conclusion here for me: this dangerous bill, which wants to make a government agency Lord and Master over the private sector that is technology, must not pass.

That said, a few people must have questions about the NBS inflation report for July which I kinda promised to write on Monday. As far as I know, the NBS has still not published the figures, although it was scheduled to have been released yesterday. This is again, one of the reasons why a Twitter ban is also a ban on information and accountability - no one can ask NBS on Twitter why the report hasn't been published and they're not quite as active on Facebook as Twitter. Their last Facebook post was sometime in 2016.

That brings that super special episode of the newsletter to a close. Discuss the new NITDA bill, share this newsletter, call your representatives at the National Assembly and have the sort of robust conversations that makes sure that this bill never passes.

As an early heads up, Friday's newsletter may not hit your inboxes, I'm taking a much needed break to catch my breath for the rest of the week. Have a great week people.