By Adedapo Adesanya
Innovation has been the buzzword on the lips of many stakeholders in Nigeria in the past few years, especially as revenue from oil, which accounts for a huge chunk of Nigeria’s wealth, is depleting due to prevailing conditions in the global oil market.
This has since created an opportunity for many Nigerians, who have quickly moved in to disrupt the space with several startups that are disrupting traditional methods and creating new markets with technology.
With technology, many Nigerian entrepreneurs are doing wonders. It has made investing, saving, crowdfunding, logistics and even accountability easier. It has also done one key thing – reduced the power of dependence on the government and its unfriendly policies.
However, it has not been an easy ride for these companies who have had to deal with the constant governments’ policies believed to be anti-growth like in the case of Lagos State placing a ban on bike hailing and moving to collect 10 per cent on ride-hailing companies like Uber, Bolt, and others in the state.
This has not been the only case so far. The Central Bank of Nigeria (CBN) appears to be the biggest villain at the moment.
In February, it hit the budding cryptocurrency market with a surprise as it ordered all Deposit Money Banks (DMBs), Other Financial Institutions (OFIs) and Non-Banks Financial Institutions (NBFIs) to with immediate effect shut down the accounts operated by entities that facilitate the trading of digital currencies.
Yesterday, all was looking well until late evening when a court ex parte order froze the bank accounts of six online investment platforms for 180 days over claims that they were using the foreign exchange sourced from the Nigerian market for purchasing foreign bonds/shares in contravention of a July 2015 CBN directive.
Affected by the court order are Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Tech. Ltd OPNS, Chaka Technologies Limited, CTL/Business Expenses and Trove Technologies Limited.
Uproar followed the decision as many Nigerians have recounted the moves carried about regulators and government in hurting innovation especially as economic conditions continue to worsen with inflation, COVID-19, and conflict gripping the nation.
Yet, the government is not done as another policy in the pipeline as a leaked bill circulating on social media shows that the Nigerian Information and Technology Development Agency (NITDA) is proposing amendments to its regulatory Act, giving the agency more control over the technology ecosystem.
The general consensus is that regulation is a necessity, however, some regulations can stifle growth as evident in the latest move by the NITDA to review its outdated laws and make them more beneficial for startups.
The leaked bill is proposing that tech companies operating in Nigeria must get a license, pay pre-tax profit levies and sanction whoever (person or company) operates contrary to the new Act’s provisions.
It proposes a developmental bill funded by 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.
In Section 20 of the leaked bill, NITDA said 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 bill provided no additional information about what these licenses entail and how startups qualify to get them.
Stakeholders in tech sector have raised the alarm that further moves to regulate a space where the Nigerian government’s investment is minimal may drive these companies offshore leading to loss of tax revenue, jobs, and future investments while still serving Nigerians.
