Reactions have continued to trail the proposed amendment to the NITDA Bill which was leaked to the public, with members of the tech community opposing it in very strong terms.
The details in the bill show that tech companies operating in Nigeria will be required to obtain a licence from NITDA, pay pre-tax profit levies, and startups or their founders/employees that fail to fall in line with the provisions of the new act face stiff sanctions and possible jail terms.
The licences to be issued by NITDA will be classified into three; product licence, service provider licence, and platform provider licence. However, the bill doesn’t break down exactly what the 3 categories entail, what it would take to obtain the licenses and how startups will qualify for them.
According to the provisions of the proposed Act, startups tech companies making an annual turnover of N100 million ($200,000) will have to pay a levy of 1% of their profit before tax. This levy would go into funding the National Information Technology Development Fund to be used in carrying out the country’s digital economy objectives.
According to the leaked bill, “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.”
Individuals found guilty will be fined not less than N3 million or jailed for at least a year, or both. Corporate bodies found guilty will be fined at least N30 million while their bosses may serve a prison sentence for two years or more.
The NITDA will also be empowered 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.
Startups or individuals who hinder NITDA personnel from carrying out those duties will be fined at least N3 million and N30 million respectively.
Tech community reacts
All of these haven’t gone down well with members of the tech community and the public at large and they are making their feelings known in very strong terms. Angel investor and former Flutterwave staff, Eche Enziga described the people behind the bill as enemies of progress.
“Nothing the Buhari government does surprises me anymore. This NITDA bill is what you expect from an enemy of progress,” he said.
Ex-Andelan and Cofounder of Eden Life, Prosper Otemuyiwa, while expressing his disappointment, advised Nigerian tech founders to build for the global market. He also expressed his joy that 80% of tech startups operating in Nigeria are incorporated abroad as that would mitigate the ‘wicked’ effects of the proposed bill.
“When people consistently show you wickedness, just block them and build elsewhere,” he said.
Tech journalist, Idris Abubakar, enumerated the various obstacles which the government and its agencies have put in the way of tech companies and one can only help but wonder how the sector is supposed to thrive amidst all of it.
Despite its huge market, Nigeria is proving to be a very difficult terrain for tech companies. In February of 2020, the Lagos state government imposed a sweeping ban on bikes which effectively crippled bike-hailing companies. The same government has also put down a policy for taxi-hailing which has been described as extortion rather than regulation.
In February 2021, the Central Bank of Nigeria (CBN) issued a directive forbidding banks from facilitating crypto transactions, severely crippling the operations of crypto startups. Later on, it would forbid fintechs from using Bank Verification Number (BVN) for KYC verification.
In June, the Federal Government banned the operation of Twitter after the microblogging platform deleted a tweet by President Muhammadu Buhari which contravened Twitter rules. It has remained banned ever since and though there have been talks about lifting the ban, nothing concrete has materialised.
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