Following a leaked regulation bill by the National Information Technology Development Agency (NITDA) Flutterwave co-founder, Iyinoluwa Aboyeji, said he regretted voting for President Muhammadu Buhari.
Aboyeji is one of many tech founders that have criticised the administration for strangling the fintech market with regulation, as the NITDA bill seeks to hit the tech startups with more licenses and fees.
The bill is also looking to place fines and sentences on the fintech players, all in a bid to benefit from the growing digital economy in Nigeria, where three unicorns, Flutterwave, Jumia and Interswitch operate.
Licenses, fees, fines, imprisonment and threats of NITDA
The director-general of NITDA, Kashifu Inuwa Abdullahi, is looking to amend the act of NITDA to include Nigeria’s digital economy and improve on its power or authorisation against the tech startups.
Nigeria has witnessed a boom in technological advancements, similar to that of South Africa, but the West African country has fallen behind Kenya, South Africa, Egypt and Ghana due to unpopular tech policies and limited business freedom.
This much was said by Twitter following its decision to situate its headquarters in Ghana despite Nigeria being its target market – but this doesn’t seem to stop Buhari’s administration in their tracks, as NITDA has moved to further tighten government’s grip over the budding tech market.
Takeaways from NITDA Bill:
. In Section 6 of the amended bill, subject to a court order, NITDA requested to have the power to, “enter premises, inspect, seize, seal, detain and impose administrative sanctions on erring persons and companies who contravene any provision of the Act.”
. NITDA intends to receive fees, administrative payments, levies from tech companies, and grants-in-aid through National Information Technology Development Fund – The fund will be established under the amended act, and will be used for the country’s digital economy objectives.
. A levy of 1% of profit before tax will be charged from tech companies with annual turnover of N100 million.
. Tech startups, regardless their size, will be mandated to obtain NITDA authorisation in the form of license, which is classified into three sections: Product, Service provider and Platform provider.
. It will be a criminal offense for any person or body corporate to operate an information technology or digital economy service, product, or platform contrary to the provisions of NITDA amended Act.
. NITDA reserves the right to fine individuals guilty floating its act not less than N3 million or imprison such person for a year or more – both fine and imprisonment can also be applied at will by NITDA.
. Corporate bodies (startups) found guilty will be fined not less than N30 million, while the top executives of the companies may face two years prison sentence.
. Individual or company will be fined N3 million and N30 million respectively if they deny NITDA personnel from conducting their duties under the Act. They are also threatened with one or two years prison terms.
. Also, a company that fails to pay levies after two months of its date will be fined 0.5% of the levy each day of default.
Buhari’s administration: The Taliban government
Under President Buhari’s administration and the All Progressive Congress (APC) tech startups have woken up to new policies that threatened their turnover and existence.
In January 2020, the Lagos state government, led by Governor Babajide Sanwo-Olu, stopped the operation of bike-hailing firms.
This pushed the likes of Max.ng and Gokada into the last mile market, upon their entry, the Nigerian Postal Service (NIPOST) demanded that delivery companies operating within a state must pay N2 million for license.
NIPOST also demanded N800,000 for license renewal, while municipality operators will pay N1 million, and renew with N400,000 annually.
Delivery operators with less than five bikes are required to obtain SME Licence at the cost of N250,000 – public outcry made the government agency to abandon the license charges.
In February 2021, the Nigerian government also banned cryptocurrency exchanges from operating within the country, and recently, it froze the accounts of Riseinvest for cryptocurrency trading, Chaka, Bamboo and Trove for purchasing foreign shares for their users through their technology-enabled platform.
Aboyeji said, “If you are a tech company operating in Nigeria you should definitely have a detailed ‘if the government bans our business plan’ as part of your strategy. So important.”
With the recent NITDA bill, the tech market players are finding their voices again, and Flutterwave’s co-founder is leading this outcry against government unfriendly policies.
Aboyeji said he regretted voting BuharI back in the 2015 Presidential election, which saw the end of President Goodluck Jonathan’s administration, and which he said was easier to communicate with.
In a series of rants in the past four days on Twitter, Aboyeji said he’s not afraid to admit his regret, stating that he’s paying dearly for it, but he will not allow that mistake define his life.
Commenting further on his feelings towards the current administration, Aboyeji said, “I think it was a mistake. Jonathan for all his faults responded better to public pressure. But I guess we will never know.”
While responding to a comment about his post, he said, “We should take some responsibility and understand the powers of the office of the President and Buhari’s record. We were swept up in the mania. It shouldn’t happen again.”
He said efforts have been made to lobby and talk to the National Assembly and the government on behalf of the tech market, but it’s like negotiating with the Taliban.
“But anyone who thinks the politicians will stop attacking the industry despite appeals is living in Eldorado. You are just negotiating with the taliban.”
He said the best long term solution is to have more tech affiliated or savvy legislators in the house that will be loyal to the tech market, as “All the laws can be reversed once you actually get there. So any pain is temporary. Eye on the big ball.”
Bargaining chip: Osinbajo has no influence
According to him, every warning was given against voting in President Buhari, but, “We just didn’t listen. But maybe if someone has been more emphatic about the fact that the Vice President would never be as influential as we thought we would have stopped in our tracks.”
Vice President Yemi Osinbajo, was reportedly used to appeal to the younger population, but they didn’t know the VP won’t have an influence in the decisions of the current administration.
Osinbajo had publicly spoken against the ban on cryptocurrency in Nigeria, but the administration went ahead to outlaw their operation.
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