The investigation into Fidelity Bank began in April 2023 after one customer claimed the bank used their personal information to open an account without consent.

“The Commission reviewed the data processing platforms of Fidelity Bank and found that in certain critical cases, the Bank processes personal data without informed consent of data subjects,” the NDPC said on Wednesday.

It also claimed Fidelity relied on non-compliant third-party data processors to process customers’ data in violation of the 2023 Nigeria Data Protection Act.

Fidelity Bank did not immediately respond to a request for comments.

The regulator said it initially asked the bank to pay a remedial fee in December 2023 and claimed the bank failed to honour repeated warnings.

“The commission gave several opportunities for full accountability for over one year – taking into account the need to encourage compliance as a culture.  However, Fidelity Bank did not provide requisite, satisfactory remedial plan,” it said.

In July 2024, Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) and the NDPC fined Whatsapp $200 million after a three-year investigation into the company’s privacy policy.

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Since he assumed office, President Bola Tinubu has implemented several reforms including the removal of fuel subsidies and the unification of the foreign exchange rate, albeit with far-reaching effects on the Nigerian economy. In the June 2023 edition of the Nigeria Development Update (NDU) [pdf], the World Bank said these reforms are crucial measures to begin to rebuild fiscal space and restore macroeconomic stability. The report also highlighted key macro-fiscal policy recommendations to help rejig Nigeria’s economic growth in the second half of the year. 

Following the subsidy removal, the Nigerian government is projected to achieve fiscal savings of approximately N2 trillion in 2023, equivalent to 0.9% of GDP, according to the report. These savings are expected to reach over N11 trillion by the end of 2025. But the policy has led to higher fuel prices and attendant hardship for citizens. To this end, the World Bank recommended that the government provide immediate cash compensation to Nigerian households to cushion the price impact of the subsidy reforms. Earlier this month, President Tinubu asked the National Assembly to approve N500 billion for palliatives. 

To build on the PMS reform and rebuild fiscal space, the World Bank recommended the removal of tax exemptions on petrol products: simply put, Nigeria should start charging taxes on petrol. Also on taxation, the World Bank advised an improvement in tax administration to “ensure the collection of the newly introduced excises on telecommunication, single-use plastics, and high-polluting vehicles” and a data-driven approach to tax audit. After a series of recently announced tax policies, President Tinubu this month set up a committee on fiscal policy and tax reforms headed by Taiwo Oyedele, a former Fiscal Policy Partner and Africa Tax Leader at PwC.

To sustain and deepen FX policy reform, the World Bank recommended the removal of the restrictions for the list of 43 items. Despite collapsing all forex windows into the Investors & Exporters (I&E) window last month, the CBN had insisted that importers and exporters can’t get FX from official windows for these 43 items. Experts have said the ban negates the idea of the unification of the exchange rates and creates a demand for the parallel market. As journalist, Mayowa Tijani put it in this article, “If CBN and President Bola Tinubu are really serious about unification, the 43 items situation needs to go”.

In the NDU report, the World Bank also harped on the need for active communication and clarity about the “clarity about the new FX policy with the focus on a unified, market-reflective, transparently-determined rate”. The acting CBN governor yesterday said the apex bank is encouraging the FX market to be efficient as it looks to ease the demand for FX. 

Nigeria’s headline inflation hit a seven-year high of 22.79% in June, driven by a rise in the prices of food. Yesterday, Nigeria’s Central Bank raised the benchmark lending rate to 18.75%, extending its months-long fight against rising inflation. In the NDU report, the World Bank urged the CBN to continue reducing its subsidised lending to medium and large firms and end government borrowing. Two days before the start of Bola Tinubu’s Presidency, the Nigerian Senate raised the federal government’s threshold for borrowing money from the CBN from 5% to 15%, raising concerns over rising debt. The Buhari administration, for instance, borrowed a record N22.7 trillion from the CBN. While it remains to be seen if the Tinubu government will do the same, chances are the history of government lending will most likely be retained.

Like many other African countries, Kenya is dealing with a challenging economic landscape and dwindling revenues following a global economic downturn and rising inflation. The country’s borrowing has increased even as it struggles to raise revenue. The government struggles to pay salaries as citizens protest increased living costs. As part of efforts to dig itself out of a fiscal hole, the International Monetary Fund (IMF) recently approved the disbursement of a $1 billion loan to Kenya. This loan is intended to support the nation’s efforts in addressing the ongoing economic crisis and the country’s efforts in fighting climate change.

Kenya’s external debt has increased significantly, from $10.2 billion to $34.8 billion between 2013 and 2020. Such a notable jump in debt has caught the attention of the IMF, leading to criticism over the lender’s approval of extra loans to the Kenyan government. Many have questioned the rationale of providing more financial assistance to a country already struggling with growing debt, leading to protests from its opposition and raising doubts about the government’s ability to manage its financial obligations.

After noting the seriousness of Kenya’s debt, the IMF has recommended measures to the issues. These measures include cutting tax leakage and subsidies to decrease the country’s fiscal deficit, advocating for debt reduction, and encouraging the government to fund its budget internally. However, many Kenyans remain skeptical about the purpose and impact of these loans because of the country’s struggles to meet its debt obligations.

In defense of the IMF loans, the Kenyan government asserts that financial assistance is key to bridging the gap between the budget and the funds available, thus supporting essential government projects and, in the end, alleviating the burden on citizens. This argument has not addressed all concerns, mainly as some argue that the IMF’s involvement has increased taxes for ordinary citizens, leading to perceptions of reduced income due to high taxation laws.

While pursuing enhanced revenue mobilisation makes sense in achieving long-term economic stability, implementing such measures amid harsh economic conditions has proven challenging. This has led to growing dissatisfaction among Kenyans towards the IMF and the government’s ability to cushion them from the harsh economic realities.

President William Ruto and his Kenya Kwanza team had promised to be cautious about international loans. But they have veered sharply off course, borrowing KES 1.2 trillion in the past eight months. This debt accumulation further burdens the citizens because they will likely foot the cost of the loans.

The situation has placed Kenya in a difficult position. Amid the debt crisis, Kenya finds itself in a situation where IMF loans are necessary to fund critical programmes, as the country’s internal revenue is insufficient to meet its financial obligations. While the IMF’s involvement and the stringent conditions attached to the loans are targeting to promote a more economically sustainable climate, they also raise concerns about the potential worsening of the debt crisis in the short term. Kenya is facing economic challenges that have necessitated the approval of IMF loans to provide vital financial support. Although these loans have faced criticism and sparked protests, they are essential to addressing the fiscal gap and supporting the country’s economic initiatives.

In Nigeria, food inflation is a problem that won’t go away. With 90% of the working population spending 60% of their income on food and related expenses, it’s been clear for a while that urgent action is needed. Recent numbers from the National Bureau of Statistics show that food prices are the biggest driver of Nigeria’s inflation figures. It has compelled the nation’s president President Bola Tinubu to declare an emergency in the country’s food sector. President Tinubu’s plan to reduce food prices has several prongs, one of which is the establishment of commodity boards.

Commodity boards are not new in Nigeria. The country has set up boards for cash crops like palm produce, cotton, groundnut and even grains. Most of these boards were created to boost and regulate exports. Yet, they have often caused market distortions and incentivised corruption until they were eventually dissolved. Tinubu’s commodity board is supposed to rein in inflation, but there is nothing to suggest that it will be any different from the ones before it.

The National Commodity Board may cause market distortion

“In the past, the commodity board improved the rural economy and brought more revenue to the farmers, but it created a toxic imbalance in the market. Another board of that sort will do the same,” Tade*, a policy expert, said to TechCabal. Tinubu’s proposed commodity board aims to control the cost of food items and fix them at a price that will profit the farmer and still be affordable for the Nigerian consumer who is currently battling inflation. To ensure this, the board establishes a price floor, which is a minimum price at which the crop will be bought from farmers. In the past, the boards also directly buy the produce at the pre-determined price from the farmers on a regular basis.

The problem is that many times this fixed price is divorced from the market reality, and in such cases, people will inevitably cut corners and create market distortion. A clear example is how the government inadvertently created a black market for dollars when it artificially pegged the rates below the real market reality. The same thing happened in the 1960s when groundnut producers resorted to selling their produce directly to foreign buyers willing to pay higher prices, bypassing the Northern Nigeria Marketing Board’s established price floor.  “Market distortions can occur when the board’s fixed prices fail to adequately reflect supply and demand forces,” Tade pointed out. This creates disparities within the market and completely undermines the board’s intended price stability.

The National Commodity Board will be another fiscal burden

The implementation of a commodity board can also place a significant fiscal burden on the country.  Considering the macroeconomic environment of the country, the fixed price of produce may be unaffordable to the majority of the population. Under these circumstances, the board would naturally create a subsidy for the produce, and sell them to the public at artificially lower prices than what it initially bought from the farmers. But Nigeria is not in a fiscal position to provide subsidies.  Tade expressed concerns about and believes that any sort of food subsidy will nullify the fiscal gains of the recent fuel subsidy removal.

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Additionally, the board itself requires funding for essential infrastructure needed to store the produce and distribute it. It also needs to fund the several organisations that will be contributing to the board’s functions. These organizations may include the National Commodity Exchange (NCX), Seed Companies, National Seed Council, Research Institutes, NIRSAL Microfinance Bank, and Food Processing/Agricultural Processing associations. Each entity on the board may require financial resources for its operations, research activities, market infrastructure, and other essential functions.

The allocation of funds to support the board’s activities can strain the government’s budget, especially considering other pressing socio-economic priorities. 

Corruption and inefficiencies

Making this board a middleman between producers and consumers creates room for more corruption. There is nothing that shows that the new proposed board will be corruption-proof, and the last thing Nigeria needs is another leaking purse.  In addition, other inefficiencies associated with government agencies such as delayed payments, and nepotism, can adversely affect the lives of farmers, and discourage private sector participation and innovation.

Duplication of existing structures

The Commodities Exchange is listed as one of the organisations that is going to be a part of the proposed board but they have very similar functions.  Mr Akin Akeredolu-Ale, managing director and chief executive officer of the Lagos Commodities and Futures Exchange said, “Reintroducing Commodity Boards back into the ecosystem will see duplication of functions. The existing structure required by the Commodity boards is already being implemented by the Commodities Exchanges.”

Following the ban by the Federal Government on the direct purchase of farm produce by foreigners from farmers, producers have commodity exchanges to sell their goods at competitive prices. Would it not be better for the government to strengthen the infrastructure, expand market linkages, and improve the services offered by commodity exchanges?

Tade thinks there are a plethora of other means the government can lower the prices of food. “For example, reducing the import duties on produce like wheat can significantly reduce the cost of food items like pasta and bread,” he said. 

Earlier this month, Nigeria’s president, Bola Tinubu, signed the Nigeria Data Protection Bill 2023 into law. The new law, which went into effect immediately, was proposed by the immediate-past government of Muhammadu Buhari, and provides a legal framework for the protection of personal information and the practice of data protection in Nigeria. The law also creates a new national body for the enforcement of the provisions contained in the act. 

The new body—the Nigeria Data Protection Commission (NDPC)—will be headed by Vincent Olatunji. A certified public-private partnership specialist (IP3 Specialist) and a PECB-certified data protection officer, Olatunji joined the National Information Technology Development Agency (NITDA) in 2002, rose to the position of director in 2014, and became acting director-general in 2016. In February 2022, he was appointed the NDPB’s first national commissioner, and he has been tasked with protecting Nigerians and their data.

How the Nigeria Data Protection Commission was created

On a call with TechCabal, Olatunji said that the immediate former minister of the digital economy, Isa Pantami, was responsible for the creation of the Nigeria Data Protection Commission (NDPC). The NDPC was initially a body under the National Information Technology Development Agency (NITDA), but for Nigeria to be in line with the ECOWAS Act on Personal Data Protection [pdf], there needed to be an independent supervisory authority for data protection. 

“We explained to the minister that it would be difficult to get results if we did not have a body specifically in charge of implementing data protection laws. He then sent a memo to the president, which was approved,” Olatunji said. The creation of the law and commission is also in line with the right to privacy enshrined in Section 37 of the Nigerian Constitution. 

According to Olatunji, part of the president’s approval mandates that the NDPC be funded by NITDA and the Nigerian Communications Commission (NCC) for three years. “After that period, the commission should be self-sustaining. We should be able to generate money to fund our activities and even create revenue for the government,” he said. 

The powers of the Nigeria Data Protection Commission

When asked how the commission would be able to enforce fines against international companies, Olatunji referenced Nigeria’s large market. “They know the market is here; they cannot afford not to obey our laws. We have already fined some financial institutions that did not comply with the laws, and they paid. Between the time we started and now, we have generated over ₦200 million for the government. However, we use a balanced approach so businesses can grow in Nigeria.”

In an interview with Arise TV, Olatunji said that the commission has the power to create regulations for emerging technology and impose fines on companies that have committed a breach of data protection. “Going to the legislature to amend our laws before we can regulate emerging technologies would be too cumbersome. That’s why we made our laws flexible. The law empowers the commission to issue regulations, which would be as powerful as the act itself,” he explained to TechCabal. 

Data protection in Nigeria is still in a dire state. In the first quarter of this year, Nigeria was ranked as the 32nd most breached country in the world. This coincided with a 64% increase in breaches from the previous quarter. When asked if the commission will investigate breaches even without a public complaint, Olatunji said, “That is one of the principal functions of the commission. We can independently conduct investigations in any sector that has to do with personal data protection. If there is a data breach anywhere, we have the power to investigate, and whatever decision we make is binding. However, companies have the right to appeal, and the Supreme Court has the final say.”

A corollary effect of the dire state of Nigeria’s data protection has been the unethical use of Nigerians personal data by companies. Last month, TechCabal wrote about the unethical debt collection methods employed by some loan apps. Although several loan apps have denied using customer data unethically, it is something that is on Olatunji’s radar. “From my experience with Soko Loan, I know that a lot of Nigerians have been damaged psychologically by the messages they send out to people. We started investigating them [loan apps] under NITDA, and now that we are independent, it’s one of the things we will focus on.”

Olatunji added that because of the complexity of these loan applications, a multi-pronged approach by different regulators, such as the central bank, the Economic and Financial Crimes Commission (EFCC) and NITDA, would be employed to create regulations that would govern them. 

The commission can license, accredit, and register bodies to provide data protection compliance services. However, according to Olatunji, because the “expertise in data protection services in Nigeria is low”, the commission has had to employ a public-private partnership model. “For instance, we have over 500,000 data controllers and processors, and each of these organisations should have a data protection officer, but there are not up to 10,000 certified data protection officers in the country.”

To address this deficit, the commission started licensing data protection compliance organisations. “They are companies that have expertise in data privacy and protection, who can go to companies, talk to them, create awareness, and assist with data privacy and protection policies. As of last count, these organisations are now offering about 17 different services that we did not even think about when we started this process. One good thing that has come out of this is that over 9,000 jobs were created within three years. We started by experimenting with about 17 [organisations], and now there are 168 [organisations],” he said. Olatunji also added that the commission regularly conducts “quality checks” on the organisations and that 18 of these organisations have since had their licences revoked. 

Although there has been a clamour for data to be hosted locally in Nigerian data centres (Nigeria has only 11), Olatunji believes that a hybrid model would be best suited for Nigeria’s data. “It is not realistic for you to say that all your data must be hosted locally, so what we have done is create standards for cross-border data transfer in the Act [Sections 41, 42, and 43].”

Criticisms of the Data Protection Act

One criticism of the act has been that “legitimate interest” was added as a legal basis for processing personal data, but the act does not clearly define what “legitimate interest” means. Olatunji told TechCabal that “legitimate interest” was added to cater for a scenario where a data processor needs to process data but does not fall under the bases of consent, contractual obligation, legal obligation, vital interest, and public interest. He added that “legitimate interest” would only suffice if it was not in conflict with the other bases. 

Another criticism of the National Data Protection Act is that it does not specify the quantum of data processed by a data controller or data processor to qualify as a data controller or processor of major importance. Olatunji clarified that only the commission can specify this and that the exemption is deliberate because the requirement would constantly change as new developments happened.

What does Olatunji want to achieve in office?

When asked what he would like his legacy to be after his tenure, Olatunji told TechCabal that he wants to change how Nigerians think about data. “I want us to get to a level whereby every Nigerian will know their rights in terms of how their personal data is collected, processed, shared, and stored. I also want to leave a legacy where data processors and controllers know their obligations in the area of accountability. I want a place where personal data protection is a culture.” 

Last week, President Bola Tinubu signed the Nigeria Data Protection Bill 2023 into law. The new law—which repeals the Nigeria Data Protection Regulation (NDPR)—provides a legal framework for protecting and regulating personal data in the country. The Act also establishes the Nigeria Data Protection Commission. While this is good news, lawyers who spoke TechCabal said there are still grey areas in the law that its drafters should reconsider. 

Unclear provisions

But despite being touted as a game-changer, the Act has some unclear provisions. Samuel Ngwu, a lawyer and privacy professional, told TechCabal that the definitions of personal data and data subject—a person whose information is to be collected—can be argued to include company data. This is because the Act didn’t specify whether it refers to both natural and artificial persons.

“However, it may be contended that an artificial person doesn’t enjoy fundamental human rights under Chapter 4 of the Nigerian Constitution and the Act is focused primarily on protecting the fundamental right and freedom of data subjects,” he said. 

Section 32 of the Act provides that the data controller of major importance—defined as one that is domiciled in Nigeria—must have a Data Protection Officer (DPO) who can either be an employee or engaged by a service contract. However, the independence of the DPO is under question as such an individual is expected to report to the data controller in question, despite being a contact point for the Commission.

Oyindolapo Olusesi, a lawyer and Data Protection Officer at Kora, a fintech startup, told TechCabal, “The provisions on DPO could have been better since the DPO is at the helm of ensuring internal compliance within an organisation. Safeguards like approval by the Commission, of the appointment of a DPO; ensuring that a DPO can only be fired with notice to the Commission would better help to ensure that the companies take the role more seriously.”

Is the Commission truly independent?

Another brewing concern with the Act hinges on the independence of the Nigeria Data Protection Commission. First, the appointment of the National Commissioner by the President is upon the recommendation of the Minister of Communications and Digital Economy. The Act also establishes a Governing Council whose Chairman and the non-ex-officio members of the Council will also be appointed by the President on the recommendation of the Minister. 

The underlying question is the extent of the powers of the Minister which include the appointment of council members, remuneration, and removal. This brings to mind the last-minute amendment of the Nigeria Startup Act by the former Minister, Prof. Isa Pantanmi, a move that was met with a torrent of criticism from stakeholders. 

Olumide Babalola, a lawyer and author of “Privacy and data protection law in Nigeria”, said that it is safe to say that the Commission does not have any assurance of independence. “What makes it worse is the provision that empowers the minister to give directive to the Commission on ‘matters of policy’,” he told TechCabal. 

What’s different with the Act?

According to stakeholders, the NDPR was laden with inconsistencies, hence the Act is presumed as a significant improvement from the defunct law. Babalola told TechCabal that the Act settles the legitimacy issue hovering around the establishment of NDPB. 

“With the Act, data protection can now be principally enforced as another cause of action. The Act and the little noise around it will drive awareness and increase regulatory compliance with data processing obligations from a business perspective,” he said. 

For Olusesi, the Act has ensured some harmonisation around the legality of data protection in the country. He said, “The issue of whether “legitimate interest” was a valid lawful basis because it was not in the NDPR but in the Implementation Framework has now been laid to rest. The Act now clearly includes legitimate interest as a lawful basis. And, that clears any previous confusion.”

While the Nigeria Data Protection Act provides a comprehensive framework for data protection in the country, it is however imperative for its drafters to address the aforementioned concerns as they raise serious questions about the genuine intention behind the creation of the Act.

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President Bola Tinubu’s plan to unify the country’s exchange rate—following advice from the World Bank and the International Monetary Fund (IMF)—is now the subject of several conversations. Experts say the current exchange rate regime has made international payments difficult. Yet, moving to a single, market-determined exchange rate will affect virtual card operations in Nigeria.

What will happen to virtual cards?

Uzoma Dozie, CEO/Founder of Sparkle Nigeria, says he doesn’t foresee any significant impact on the virtual card businesses in the country, considering the current operational landscape and existing policies. “However, operational costs for Naira-dominated virtual card businesses with a foreign exchange component may experience increased operating costs, which depend heavily on various local and global economic factors. We also need to consider that virtual cards are already operationally more cost-effective than physical cards because there are no production, transportation, storage, or delivery expenses to worry about. It is too early to start speculating now as we look forward to how this will play out,” he told TechCabal.

For Ibrahim Toyeeb Ibitade, CEO of Leatherback, a cross-border payments platform, until Nigeria fixes its FX shortage, a unified exchange rate will not affect the operations of virtual cards. “The only time we will see any significant impact is when the country has been repositioned and restructured so that we can generate as much FX as needed by different sectors of the economy. But for now, there will still be that scarcity problem because Nigeria isn’t generating enough FX,” he said.

Traditional banks are the potential winners

The $20 monthly limit on foreign transactions for Naira cards opened up the market for virtual cards. Dozie explains that if the Central Bank chooses to expand the FX market by permitting banks unrestricted access to buyers, there is a possibility for an increase in supply. This could lead to banks raising the FX limit on naira cards. “With the potential for a unified exchange rate to further open the market, banks can access FX more efficiently than was previously possible. Hence we can expect banks and other providers to increase card limits, whether physical or virtual and a more competitive operating environment,” he added.

Charles Odogwu, a digital payments expert, shares a similar view. “Banks are going to open their doors and encourage customers to use their naira cards. There is a possibility that banks might not have a limit cap on spending because the FX is available, and there is no disparity in the rates. But on the other side, if the banks put a limit on their cards, virtual dollar cards will still exist and remain go-to alternatives for most people,” he told TechCabal over a call.

A virtual card user who spoke to TechCabal anonymously claims that, from his experience, banks are more efficient in processing payments than fintechs when it comes to card services. “As much as banks have inefficiencies in terms of their infrastructure, I still believe that they have a higher tendency to succeed than fintechs. You’d hardly hear of a traditional bank announcing a downtime in its card services,” he said.

Where does this leave fintechs?

For fintechs that offer virtual card services, an upward review in the limit on naira cards could potentially hurt their business. While more Nigerians have gotten comfortable with virtual cards, the questions of trust and security could convince them to switch back to naira cards.

Odogwu argues that while onboarding is much easier with fintechs, unlike traditional banks, the latter remains ahead in terms of trust. “If you noticed what happened recently with the CBN revoking the licenses of over microfinance banks [some of which are fintechs], the reaction is that people are moving their money from fintechs—even those unaffected,” he said.

But Dozie says only a few startups have built their business models solely on providing virtual cards. Instead, they are often available as part of a financial services offering. “We expect there will always be a niche and demand for virtual cards, and I do not see how the impacts of a unified exchange rate will disrupt or threaten businesses that offer or accept virtual cards,” he told TechCabal.

Damilola Robert, a growth marketing manager at Bitnob, an African fintech that provides virtual dollar card services, notes that the question is really about what extra services fintechs can offer: “So if they [fintechs] are now competing about quality and products, then that means that they need to beef up their customer support system. The ability to leave a positive mark in people’s minds will determine how long they survive in the market because customers now have alternatives.”

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When I got the call to serve my country at the height of the COVID-19 pandemic, I was not only elated, I also felt the weight of a huge sense of responsibility. I have been an entrepreneur in Nigeria for close to two decades and the impact of policymaking has always directly affected my entrepreneurial experience. For me, it was an opportunity to go from talking about how to make Nigeria great to contributing what I could to make it happen. 

Now, as my tenure as Senior Special Assistant on Digital Transformation to the President of the Federal Republic of Nigeria draws to a close, I’m reflecting on how rewarding the journey has been. I am incredibly grateful for the opportunity to have been a part of a team that has brought about significant changes in a short period of time. I would like to express my deepest gratitude to the federal government of Nigeria for entrusting me with the responsibility to participate in the governance of our great country. It has been a privilege to serve alongside so many dedicated and talented individuals who equally share a common goal of driving the growth and development of Nigeria.

As I reflect on my journey, one of the greatest achievements and milestones I cherish the most was the passing of the Nigeria Startup Act (NSA) into law. Yes, I will be adding “policymaker” to my profile, having led the programme, which is landmark legislation that will have far-reaching implications for the digital economy. This act is a significant step towards fostering an enabling environment for innovation and tech entrepreneurship in the country.

The significance of this act lies in the fact that it positions Nigeria as a contender in the global competition for technology as a core industry, and as a driver for the emergence of a better, more inclusive society. The NSA provides a collaborative framework for supporting the growth of tech and tech-enabled startups, which are essential components of any thriving economy in the 21st century. It will also facilitate access to funding, talent development, and other resources, which are crucial for the success of these startups.

Furthermore, the Nigeria Startup Act will enable the government to collaborate and engage more effectively with private-sector stakeholders to promote innovation and build a more robust digital ecosystem. I have no doubt that this act will serve as a catalyst for further growth, innovation, and exploitation of Nigeria’s tech ecosystem; indeed, ample evidence of this is already visible in the ecosystem. But enacting the act is only one piece of the puzzle. There’s more that goes into building a thriving and inclusive digital economy.

Charting a path forward

There is absolutely no doubt that Nigeria has the potential to be a global leader in tech and innovation. Policy development and articulation that support the sector and allow for the government and stakeholders to collaborate better are vital to charting a path forward for a country to realise its potential. 

However, in order for policies or legislations to serve the purpose for which they were created, they must be implemented. The danger of doing otherwise is that the policies sit and gather dust on a shelf. Government must throw its full weight behind the implementation of the NSA in the same way the ‘Big tent approach’ pulled support from all ministries, departments and agencies (MDAs) and the private sector in the development of the then-bill. This will ensure that the interests of Nigerians are protected, which, in this case, is to yield benefits primarily for young people across the country.

The second hurdle in the path ahead is to lay a solid foundation for future growth that is all-inclusive and sustainable. We certainly cannot afford to repeat limited value chain participation in our natural resources. Our valuable resources and opportunities in this case are our young and talented citizens that can be trained to deliver, real hard problems that can be solved through market-creating innovations, and our large domestic market to service en route to global market entry.

We need to ride the momentum of the mobilisation for the NSA to make the right investments now that will help us achieve this goal. We cannot wish it into existence. We cannot leapfrog and avoid critical steps in the technology developmental cycle. 

I believe that the next great idea and startup that impacts the world will start and grow in Africa.  The question is, how do we get there? It is crucial to understand where in the journey we are and only then can we map a development path that is relevant and pragmatic for us as a nation.  

Asides from enacting and implementing policies, another major key to success is ensuring we are executing infrastructure initiatives that support our growth. Here are a few symptomatic questions that can get us started in the right direction:

1. Have we digitised public services to make them accessible on an e-governance platform?
2. What is our pathway to reducing our reliance on paper? Can a paper-driven mindset stimulate productivity that is on par with digital processes and services? 
3. Have we moved digital citizenship from enumeration and control to providing services to our citizens? 
4. Do we have digital access to our vast market population via rural connectivity and broadband medium diversity?
5. How can we increase digital literacy as part of our universal basic education goals?

While new technology like AI and blockchain are great and we should investigate and participate, we must also interrogate what it means in this stage of our development. We are currently infrastructure-deficient, with siloed and uncoordinated digitisation initiatives.  In essence, we cannot afford to leapfrog; we must execute each step in the developmental path.  

Critical to all this is the governance organisational formation that recognises technology as a horizontal activity that cuts across vertical activities in all MDAs and aspects of our nation. Its execution must happen in a more intentional organizational structure that would drive a singular empowered governmental approach to digital technology strategy, policy and execution. 

I want to remind us that the development we seek is a journey, and despite all odds, we cannot stop innovating and building infrastructure. 

Finally, we must expand our investment in digital skills. We must support the numerous initiatives that exist and integrate them. Next, we must ensure that they reach every corner of the country. To realise our digital economy potential, digital skills need to scale. And we need to find a systematic way of ensuring that upon gaining these skills they can be put to immediate use. Implementing and states adopting the NSA to the letter can get us on this path very quickly.

This will require our sustained participation as citizens of Nigeria. The act is for us as it supports our growth and sets an example for other sectors. We must all remain engaged to ensure that the objectives are fully realised.

Once again, I want to express my profound gratitude to my colleagues, the government, and the people of Nigeria for the opportunity to serve. I will always cherish the experience, and as the journey continues towards Nigeria’s aspirations as a global player in a digital-first economy and society, I will be present, active and supportive. Nigeria is moving forward and upward, and we cannot be stopped.

Thank you.

Five days before President Muhammadu Buhari hands over power to a new administration, Nigeria’s minister of communications and digital economy Prof Isa Ali Ibrahim Pantami is trying to institute a new board to drive the Nigerian Startup Act (NSA). TechCabal exclusively learnt that despite questions about its legality, the minister is keen on this move.

In a memo seen by TechCabal, Prof Pantami asked President Buhari to not only absorb the 27-member Nigerian Startup Implementation Committee into the Nigeria Startup Act council meetings but also give these members a four year tenure — something that council members on the NSA council don’t have.

A source close to the matter told TechCabal, “The 27-member Startup Implementation Committee was set up to come up with a framework for implementation of the startup act. Their role is an adhoc committee. They are a think-tank on how the act will be implemented. They are not to be confused with the members of the Nigeria Startup Act council.”

The source explained that the minister also wanted the chairman of the committee to sit in the council, thereby creating a new role that wasn’t in the startup act when it was signed into law.

The long road to Nigeria’s Startup Bill

The Nigeria Startup Bill (NSB), was signed into law by Buhari on October 19, 2022. One of the major objectives of the bill is to bridge the engagement gap between startups and regulators and ensure that impediments to Nigeria’s tech ecosystem are removed. Section 3 of the Act already states that the  National Council for Digital Innovation and Entrepreneurship – interpreted as “the Council” would drive the regulations regarding startups. Section 4 states the membership of the council, conferring the president as the Chairperson while Section 5 explains that other members of the council who are not ex-officio members, will only hold office — a term of two years and may be eligible for re-appointment for another term of two years and no more.

The disconnect

The memo, which was revealed during a council meeting, stated, “Having established some of the challenges that the Secretariat identified in the course of the implementation of the Act, the Secretariat wishes to seek the kind indulgence of this distinguished Council to ratify the following approvals obtained from Mr. President, pursuant to Section 44 of the NSA. 

“Development of the NSA Implementation framework; Constitution and formation of the 27-member Nigeria Startup Act Implementation Committee (NSAIC); Four year tenure for the members of the NSA Implementation Committee; Quarterly evaluation of the NSAIC members by the Chair of the Committee; Attendance of the NSAIC Chair to the National Council for Digital innovation and Entrepreneurship; Development of the Start-up Engagement and Support Portal; Formation of the Consultative Forum.”

However, the source said for the implementation committee to be a part of the already established council by law they need approval from the council and not necessarily the Senate. 

The source also said that allowing the chairman of the implementation committee to attend council meetings is unclear because there is already a chairperson set by law already in section 4 of the NSA act. “In what capacity would the  Chairperson of the implementation committee attend NSA council meetings?,” the source asked. 

The source explained that the Minister wants to tinker with the council by subtly seeking the President’s approval to put the committee inside the council. 

A possible amendment before May 29th?

The source explained that this ratification can only be accepted by the council. He explained that the only way Pantami’s plans can work is if a quorum is formed in the council. 

For a quorum to work, a minimum of eight people must be present alongside the chairman and two members of the private sector. The source said since the members of the council were not all there yesterday, the meeting couldn’t hold. “The meeting should have started by 4:30pm. By 6:30pm when some members left, the meeting hadn’t started but they were still waiting for the minister to come. This means they still wanted to have the meeting,” the source explained.

A startup lawyer, Oyindolapo Olusesi doesn’t believe Pantami would be able to change the already signed law in five days. 

“To ‘change’ a law, which is technically “to amend”, you need the legislative arm to carry out its constitutional duty of law making and revise some of the provisions of the existing law. When the amendments are passed by the law makers, and assented by the President, only then can the amendment become a law. 

“In this instance, it is rather impracticable for there to be any amendments in a few days, even if the process were expedited. I mean, anything can happen in our political clime, but that, itself, would be a stretch,” Olusesi explained.

The source stressed that a council agent should be monitoring and evaluating the implementation of the NSA act.

In a few days, Nigeria’s president-elect, Bola Tinubu, will be sworn in. The president-elect assumes office with promises aplenty and very high expectations from Nigerians. In his 80-page campaign manifesto, amidst economic plans to address fiscal, monetary, and trade reforms, Tinubu promises to “carefully review and better optimise” the naira system.

However, a recent report from Absa Group Ltd., a  Johannesburg-based financial services firm, stated that following Tinubu’s inauguration, the Nigerian currency will be devalued by 15% to alleviate severe trade imbalances and dollar shortages. Investopedia defines devaluation “as the deliberate downward adjustment of the value of a country’s money relative to another currency, group of currencies, or currency standard.”

In 2021, Nigeria embraced a multiple exchange rate regime by keeping a stronger pegged rate for official transactions and weaker rate for unofficial transactions. This method was employed to avoid an outright devaluation of the naira. According to the Central Bank of Nigeria (CBN), it operated a “managed float” policy at the time, which allowed it to intervene in the exchange market when necessary. However, the controlled nature of the exchange regime has now driven demand to the unofficial black market, leading to a wide discrepancy between the official and parallel markets, according to the Absa report. For context, CBN’s official exchange rate is around ₦460 per dollar, while the currency traded at around ₦752 per dollar in the black market in March. 

If the Absa report is to be believed, what then are the implications of a 15% currency devaluation on the ordinary Nigerian? 

More hardship

“For the ordinary Nigerian, a devaluation by at least 15% means more inflation, which means a further increase in the cost of living and a further erosion of their respective purchasing power. Life in Nigeria will get harder. It is unfortunate, but that is the likely reality,” Basil Abia, a research consultant, told TechCabal. 

Inflation erodes purchasing power and plunges more people into poverty. Nigeria’s inflation rate has been hovering around the 20th percentile since the beginning of the year, rising to 22.04% in March—the third consecutive increase in 2023. Global economy and finance expert, Kalu Aja echoes Abia’s concern. “For the average Nigerian that spends the bulk of their income on food, a devaluation will see the cost of food rise simply because the means of production, PMS, and fertilizers are still imported,” he said. 

A double-edged sword

Abia noted that the devaluation will result in increased inflation and an erosion of the Nigerian consumer’s already dwindling purchasing power. This will, in turn, affect the profitability margins of export-based micro, small and medium enterprises (MSMES) due to increased costs of imports, and increase the cost of living in the country. 

However, he adds that there could be some benefits from the devaluation. “If it is perceived to be temporary, it may present attractive opportunities for foreign investors to invest in our domestic financial markets. It is not certain, but it is a possibility that FPI (foreign portfolio investments) inflow to Nigeria may temporarily increase,” Abia said.

Aja shares a similar view: “For citizens that spend Naira, it [devaluation] means imported inflation is more severe and reduces purchasing power. Keep in mind, devaluation is not entirely bad. It can be a strategy to reduce a budget deficit or boost export, but you can devalue your way to wealth.”

For Adedeji Olowe, founder of Lendsqr, a lending SaaS fintech, the impact of the devaluation on the Nigerian economy may be minimal. “The devaluation would be on the official exchange rate which nobody has access to in the first place. Furthermore, it makes the USD that the government earns go a very long way and helps the funds that are stuck to move out [say Emirates Airlines] but with substantial losses,” Olowe said.

The devaluation also indicates that the Tinubu-led administration will likely retain the existing float policy and maintain an artificial exchange rate amid Nigeria’s foreign exchange (FX) shortage. The implication, according to Abia, is that the current economic uncertainties caused by a multiplicity of  FX windows will be further accentuated. “There’s also a chance that the alternative FX window might be the closest accurate valuation of the Naira, forcing an increased transactional demand by investors, importers and individuals to use the FX window for all their FX transactions and needs,” he said. 

Aja adds that the issue with the exchange rate is the wide arbitrage, which the devaluation will address. He told TechCabal, “the devaluation seeks to close that artificial gap and bring more certainty to economic planning. You can’t plan if you have to buy $1 at 740 or 488; devaluation closes the gap a bit, less swings, makes the exchange less volatile, and even encourages remittances.”

The implications of an impending currency devaluation on Nigerians are far-reaching and multifaceted. While it is poised to address imbalances in the foreign exchange market, the darker side is the burden that falls heavily on the most vulnerable segments of society, exacerbating poverty and inequality. As the country faces economic turmoil, it is crucial for the incoming government to implement comprehensive and sustainable measures to stabilize the currency, promote economic diversification, and improve the overall well-being of Nigerians.