Nigeria’s sudden bans on cryptocurrency trading and Twitter have already put some startups on alert this year, but a bill to reform the country’s technology regulator is sparking fears of a community concussion.
The 26-page draft document seeks to amend a 2007 law, in order to address opportunities and threats posed by recent digital technologies. “The kind of information we store on our phones and other technological gadgets make the human brain susceptible to the possibility of being hacked,” Kashifu Abdullahi, the regulator’s chief, told legislators in March.
Seemingly innocuous at the time, Abdullahi’s statement now feels ominous after details of the bill became public this week. Startup founders, venture capitalists, and policy analysts fear the bill will stifle innovation, if it is enacted. Section 6 of the amended bill details the powers accrued to the National Information Technology Development Agency (NITDA).
Some of them 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 declares that tech companies making an annual turnover of $200,000 will have to pay a levy of 1% of their profit before tax. In Section 20 of the leaked bill, NITDA says it will issue licenses and authorizations for tech companies regardless of their size. The licenses are classified into three 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.
Nigeria was one of the top 10 countries with the most notable improvements during the review period of May 2018 to April 2019. Granted, the country made some improvements during this period, but since last year, any talk of progression from the country has been on paper. In reality, businesses, especially those focusing on technology, have faced harsh regulations and policies detrimental to their growth.
Businesses of motorcycle hailing companies were halted indefinitely in early 2020, forcing them to switch business models to survive. In March the apex bank announced a ban on cryptocurrency activities, thus affecting crypto startups and more recently on 5 June, the Ministry of Information banned the microblogging platform, Twitter.