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South Africa: Economics above politics



By Dakuku Peterside

South Africans voted in national and local elections on May 29, exactly one year after Nigeria inaugurated its current president. Since 1994, this election has been the most significant post-apartheid election and the most unpredictable in the country’s 30 years of democratic rule. The ruling African National Congress (ANC) lost its parliament majority for the first time, possibly paving the way for the country’s first coalition government.

With voter discontent, leading opposition parties, including the Democratic Alliance (DA), the Economic Freedom Fighters (EFF), and newcomer umKhonto we Sizwe (MK), put pressure on the ANC through uninterrupted mass campaigns and countrywide rallies, promising sweeping reforms in hopes of swaying most registered voters to their side. Unlike in most parts of Nigeria, the elections proceeded smoothly, without violence, ballot snatching, or shootings. South Africans demonstrated discipline and respect for the law. This notwithstanding, the stakes were high, and ANC’s historical advantage was side-stepped. This election significantly shakes the existing political order and deepens democracy in South Africa.

Economic concerns had a massive impact on the election’s result. South Africans shifted their focus from a “freedom-centric politics” to an “economy-centric politics.” Under the ANC administration, South Africa has had to deal with a high unemployment rate, the highest murder rate in 20 years, and pervasive corruption. Their economic concerns include a lower GDP per person than in 2008 and the state is becoming less effective. A case in point, in 1997, South Africa ranked 47th of 123 countries in the Economic Freedom Index, a ranking by the Fraser Institute, a Canadian think-tank, based on the size of the public sector and the extent of regulation, but by 2021 it had slipped to 94th, just ahead of Nicaragua; national debt as a share of GDP has more than tripled, from 24 percent in 2008 to 75 percent; a staggering unemployment rate of 33 percent with above 40 percent employment among youths and black people; massive infrastructural decay and deficiency.  Last year, Eskom, the state-run power company, with a generation capacity of 44,175MW, way above Nigeria’s 4,000MW, had to schedule a record number of blackouts because its generation fell so far short of demand, and customers lost almost 40 percent of piped water  before it reaches customers.  The railway system is dysfunctional. The World Bank reckons that crime costs South Africa at least 10 percent of GDP annually. South Africa was the seventh most crime-saddled country in the world, according to an index compiled by the Global Initiative Against Transnational Organised Crime.

These issues played on the minds of many of the voters, who are predominantly young and black people and are a bit distanced from the Apartheid politics of freedom and liberation that helped ANC dominate the political space in South Africa. Although ANC won most parliamentary seats, it increasingly requires forming a coalition government because it is not getting the dominance of yesteryears in the political space. Their mismanagement of the economy and the high level of crime and corruption in the system have forced some party loyalists to move to other smaller parties, and voters are increasingly demanding a change. Although we may still have the ANC in power, their dominance has eroded, and their power and authority are challenged. The more the generation that saw apartheid and is sentimentally attached to ANC as the freedom party fades away, the more ANC must rely on young voters who will vote based on the vagaries of the economy. Many young people interviewed after the elections pointed to economic reasons as the most crucial consideration in voting for candidates and parties.

This is a new trend across Africa. In most African democracies, especially those with a high young population, the foremost considerations in the voting pattern are shifting from traditional religious, ethnic, or tribal considerations steeped in the country’s history to economic reasons. A cursory look at the core campaign issues and discussions indicates that they centred on the economy, poor governance, crime, and insecurity. This implies that politics in countries facing economic difficulties are increasingly making economic issues the main burner, although other factors may still be entrenched. What can we learn from the seismic shift in the SA political landscape?

The first implication is that Africans, especially young Africans, have started to expect and demand good economic development from their governments. This is a welcome development for the deepening of democracy in Africa. Young Africans are harshly affected by poor economic management by governments, and they have started to mobilise and understand that politics defines the economy because the people who handle the economy are elected to office by them. Although this is at an early stage, we hope it continues and takes root in our politics. The only negative aspect of this is the level of political apathy among the youth.

The second implication is that the more the economy becomes the centre stage of political rhetoric and discussion, the more efficient management of the economy becomes the dominant political agenda. This is good for African politics. African nations need better economic managers now more than at any other time in their history. With the booming young population, substantial natural resources, and an emerging educated and upskilled workforce in science, technology, and the arts, Africans are poised to bring about sustainable economic development across the continent.

The new politics of pro economic growth is the only hope for Africa if it must get it right and leverage its great potential, especially youthful population, to harness the greatness of its strengths. Here lies the paradox. These strengths and potentials are time bombs that, unless adequately managed by democratically elected leaders who are savvy in the economy, the crisis and doom it will turn to will shock Africa. The evidence of this is the level of increase in crime and insecurity in many African countries.

The mix of economics and politics is the new order, and every serious party of any African nation must take note of this and reshape the vision accordingly. It spells doom when party leaders like Mr Ramaphosa repeatedly prioritised the interests of his party over those of the country. ANC has paid a hefty price for this mistake, and we hope they and other big parties across Africa will learn from it. Leave out the economy at your peril. Young people are looking for answers to Africa’s many problems, especially economic problems. They need solutions, not identification of problems. Everywhere in Africa, economics determines politics.

South Africa has gone to the polls, and Nigeria must learn many lessons from them. First, the elections were free, fair, and well-organised, with citizens disciplined. Even when there were minor hitches, it did not undermine the integrity of the electoral process. In contrast, elections in Nigeria are always overly the opposite. The elections are not primarily free and fair because of many irregularities, which are too many to elucidate here. During elections, some Nigerians are lawless, undisciplined, and unpatriotic. In the words of Basil Odilim, “No nation has ever achieved development with citizens who are undisciplined, lawless, and unpatriotic.”

Consequently, Nigeria’s economic journey is on the road to nowhere. We must put our economic journey on the road to somewhere. A patriotic, disciplined, and creative mindset is needed for economic growth. The best way to show patriotism is by participating in the electoral process and electing leaders who will manage our economy well and prioritise productivity over consumption and corruption. The election is the first step to getting good leaders in Africa.

Every South African voter was concerned about a cocktail of widespread corruption, a high unemployment rate, electricity failure, and stifled economic growth. Nigeria’s democracy will focus more on economics and quality of life than on trivial matters as we cross the 25th anniversary of democracy and more young people join the political process. South African voters were concerned about the same issues we are dealing with in Nigeria. This speaks to Chinua Achebe’s “Things

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Lagos must think out of the box — Sanwo-Olu



By Babajide Sanwo-Olu

Quite honestly, I am going to leave my speech and speak to you from the heart.

Having listened to the man from Singapore, Gregory Vijayendren, former President, Law Society of Singapore, I think if there is nothing else and if indeed we are serious and sincere about making change in this country, there is something we need to take away from here.

Singapore, like he said, is a tiny dot on the world map; you hardly know where it is, but like he said it is a city state that has earned its place in the world.

Lagos, by sheer coincidence, also is like a dot in the country; it’s less than 0.4 percent of the size of this country. So, technically, it also can be a dot and of that 0.4 percent, 1/3 (one third) of it is water. But, by sheer coincidence, it is the commercial, economic nerve centre of the country. Singapore holds its place too as a major economic hub worldwide today.

Lagos is home to so many things – our international businesses, a lot of start-ups  businesses that are all the best names we have in Africa today, all the unicorns, the creative industry, the entertainment industry;  they are all sitting here in Lagos and, by some coincidence, we have also acknowledged that Lagos also is taking a lead in the judicial sector reforms and access to justice. But guess what, Singapore that is a tiny little country have also done so, but they have done it more.

So, we have gotten good comments from the Honourable Attorney-General of the Federation. Everybody has spoken well about Lagos, but I am not satisfied yet. Lagos now needs to take this to an international scale.

We cannot sit back and expect that because we are the best in our country that equates us to being one of the best in the world. Singapore is less than five million people, maybe six million today and we are 224 million. They don’t have two heads. They don’t have the kind of the minds and strength we have in this state and this country. The question is, what is wrong with us?

The man said to us that the three big pictures are: the rule of law (there is no nation that wants to earn its beef anywhere and does not have rule of law as one of the beacons for deciding how it engages). They were small and there is a likelihood that they can get extinct. Guess what, Lagos is also small, Lagos indeed is very small and so we need to be able to think out of the box.

They have no resources, we have no resources as well, but we have said we are the commercial, economic nerve centre, but we cannot sit back and hope that is the best we can do. Because in 1965, less than 60 years ago, the per capita of Singapore was about $500; now the man says it is $88,000. Where was Lagos and where are we now? Where is our country? Are we just going to be the giant of Africa for nothing? Do we just want to take that accolade that says we are the largest black nation; in what sphere?

He mentioned to us that Singapore is what it is today because one: ease of doing business. You can register a business in less than 30 minutes. Maybe we have improved a little bit; it used to be like two-three months. Maybe we can do it in three days now in Nigeria. They clear a container in Singapore in seven hours. In Nigeria, it used to be three-four months. Now maybe it has reduced to a month or three weeks now, but we are not near where it should be. They have one seaport, we have two seaports; now we have a deep seaport, but they have several.

And one of the other things they have also done, they ensure that the very best of their citizens work in the public service. All the best that go to Oxford, Harvard in Singapore find themselves in the Public Service. We also have a Public Service that we can be proud of in Lagos, but we need to be able to raise the bar, we need to be able to do a lot more than where we are today. Maybe the only thing that Singapore has over us, which they have the bragging right and we don’t, is that they are a Sovereign State and we are a subnational.

We are constricted and restricted by a bigger name called Nigeria and so maybe we cannot fly as high as we want to; so maybe we cannot walk as fast as we want to, maybe we cannot think as quickly as we want to but that cannot be an excuse for us. And that is why when we come to summits like this we need to ask ourselves, “do we just want to make it a rhetoric or we want to change a life and the opportunity God has given to us for the better?”

Leadership is all about what you put in your heart and the sense of purpose that you bring to it and by sheer coincidence this Government has given the opportunity, in less than five years I have appointed 24 new Justices into Lagos State Judiciary, the highest ever and, later in the week, we are going to add additional 13 to it. From 63, we are going to go to 76. It’s not the clap; it is how you use the opportunity that has been given to us; it is how we bake the cake to be big enough for everyone to share. Of course, there are issues; of course, there are challenges, but guess what, the man that we brought here to be the guest speaker has challenges.

Singapore was just a fishing village. The colony of Lagos had been in existence in the 19th century. There was a tram in Lagos in the 19th century; there was a tram on Lagos Island. So, what is wrong with us? Maybe some people constricted us to reduce our level of growth, but that cannot be an excuse; that cannot be a reason for us not to be able to fly high, think out of the box, and do things quicker, faster and smarter.

The man left us with a few actions; he said to us that Singapore has one of the best judicial systems in the world, a tiny country. They are respected internationally on issues around mediation and dispute resolutions.

Yes, we have them; thankfully, we can clap for ourselves; we have Office of the Public Defender, Citizens Mediation Centre; we have Alternative Resolution. Yes we do; how well can it compete globally? As your governor, it is not just to be a local leader.  They say he is a king in a country, city or community of the blind he who has one eye. But now our eyes are opened, we even have glasses. So, there are four that we have.  We need to be able to think local but act global. The global space is available for us to pick. To my Lord Justices, it’s not about excuses; it’s about what are the core that we need to do here today?

It’s about the bench and the bar. How do we collaborate? How do we ensure that the opportunity that this space has given to us, all of us are using it to the best of our capacity because I am not sure we are driving at that capacity well enough? And he left us with some unique features – there has to be collaboration with the government, which is where I stand; the Bench, the Bar; it’s not by lip service. We need to understand that there is a clear separation of power; we need to respect each other, but everybody has to bring something to the table.

He says to us that we need to think fast; we need to move very quickly; we need to be able to tweak things; meaning we need to think out of the box, challenge the status quo and ask ourselves, “is this the best that we can get?” The best you can get does not necessarily have to be like my brother, the President of the Nigerian Bar Association said in road construction and the rest of it. The best can be in our intellectual property, in our capacity to think and do things right.

And, of course, he also said to us that technology is a strong enabler and yes, we also can pride ourselves that during that very difficult time of COVID, we were able to use Zoom like other people. Our cabinet was able to do a lot of things virtually. Yes, we have a lot of those things, but my take this morning is the fact that we have gone to a territory. We’ve gone to a territory that needs to challenge us. Singapore is a tiny city State and that is why I am comparing it with Lagos, I don’t want to use Nigeria as a big excuse. I do like for like and we need to be able to raise the bar.

And the things that we can do are not so far off. And that is why I am not touching the speech that the Attorney-General has prepared. We all know it, we are this and that; we are doing this, No! Constitutional things. We want State Police; we have been on this conversation for how long? Just as simple as what we all swore to, the protection of life and property. And how do we need to do it? What are the things that must be in place for us to do that? Decentralize these things, let us have State Police. We are still making politics about it; we are making it political; it is right, it is not right. Everybody is just being careful in today’s age, and you can curb all the criminal excesses that we see. It is not rocket science.

And by the way, even when we get the State police, how prepared are we? How many correctional facilities do we have? How well have we also unbundled that to ensure that even the Justices and Milords that are working. I know that it is filled up.  How well have we unbundled to ensure that we can actually build more correctional facilities; rehabilitation centres, because that’s a part of the rule of Law? If there is meant to be a punishment, there is a need for a facility where it will be addressed. I am not learned so I will be very careful, just educated. I know too well that there is a wide difference between access to justice and implementation of it, but I know clearly that when we come to engagements like this, sessions like this, it shouldn’t just be talk shop; it should be an opportunity for us to challenge ourselves to speak truth to power, to push ourselves so we can make the best of it and we can leave here a lot better.

As a government, what are the kind of things that we also are doing to see if we can catch up with the likes of Singapore? For example, we are planning to make Lagos an International Financial Centre, where Lagos can be a destination for investments, a safe haven for investments worldwide, but for us to do that we need a strong judicial system. That will be one of the strongest points that anybody will be looking for; that will be one of the strongest protection that will be required and will be needed.

How well do we ensure that people who do not have access to justice still have a fair hearing and the belief that the Judiciary is the last hope; how well? And how well, even me as a leader, political leader or whatever it is that I am called, do I use my office to the best to ensure that the greatest good is always for the greatest number? This, for me, are the pertinent questions that we need to ask ourselves as a country. And this morning, the conversation is still about you, the Judiciary, like Mr. President said yesterday, “Oba di meji ni ilu kan”. I won’t talk much. Now everybody is waiting for a legal interpretation of who should be the Emir or not. The buck stops right at your desk again. Everybody will be pulling you here and there and that is why fairness, equity must come into play.

And it is very interesting, because even in the news today, the Honourable Attorney- General of the Federation sued all the 36 States because we are not giving autonomy to the third tier of government. Though the only mistake is that some of us are in compliance. So, the Honourable Attorney-General’s Office should have done due diligence to know which States are not in compliance so that you don’t carry all the 36 States, and be able to show example that out of the 36 States, four, three, two are exempted; it’s 31 that I am taking to the Supreme Court, and that is part of the back work that we need to do.

You can see that the conversation is about you today, Judiciary, because those are the two principal conversations that are out in the news today. You are the last hope of the poor man, middleman and rich man. Let’s use this engagement to really be able to reform this sector.

Mr. Sanwo-Olu is the Governor of Lagos State. He spoke extempore at the Justice Reform Summit 2024 with the theme “Enhancing the Administration of Justice for Growth, Investment Protection and Security in Lagos State” on May 27, 2024, at Marriott Hotel, Ikeja.

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The scourge of rising inflation



By Dakuku Peterside

An increasing number of Nigerians are being  driven into poverty, not by choice, but by the current political and economic climate, shaped by stringent macroeconomic policies. These policies, such as subsidy removal, devaluation of Naira, and increase in electricity tariff, have had unintended consequences. For instance, removing subsidies has led to a significant increase in the cost of living, while the devaluation of Naira has made imported goods more expensive. These factors, combined with the high level of insecurity, have affected food security in Nigeria, and created a perfect storm of economic hardship. The signs of this unavoidable reality are readily apparent. The interventions to prevent this descent into poverty are either ineffectual or remedy the condition too slowly.

An unprecedented rise in inflation has destroyed households’ disposable incomes and pushed many families into poverty. Spiralling inflation is having a devastating impact on all, but especially on households in the lower rungs of the working class, who in their millions are joining the already over 133 million multidimensionally poor Nigerians struggling to earn a living because high inflation has eroded the value of their income. As shown by the NBS Consumer Price Index of April 2024, published in May 2024, the headline inflation rate rose to 33.69 percent in April 2024 compared to March. The headline inflation rate was 11.47 percent higher in April 2024 compared to the previous year. During the same period, inflation in urban areas was higher than in rural areas. Even worse, the food inflation rate in April 2024 was 40.53 percent, increasing by 15.92 percent compared to April 2023. What does this mean for the ordinary citizen? More money can purchase fewer goods and services.

We cannot dismiss the direct correlation between rising inflation and rising poverty in Nigeria. A household with a monthly income of N300,000 in April 2023 would have lost 33.69 percent of its real purchasing power if it earned the same amount in April 2024. This means that the same amount of money can now buy significantly fewer goods and services, putting a strain on the household’s budget. Imagine this household struggled in 2023 to make ends meet; how will it cope with less than 33 percent of its value in goods and services this year? It is little wonder many Nigerians are in despair and are calling on the government to tweak its policies and salvage the situation before it is too late. Families in the earning bracket mentioned above are even better than many whose total income is less than N100,000 if both parents in the household earn minimum wages per month.

The government intervention so far, with the best of intentions, has yielded little result as inflation continues unabated. The monetary policies of increasing base interest rates to above 22 percent, improving the cash reserve ratio by banks to above 40 percent, and constantly engaging in the money market to mop up excess liquidity have yielded less than the expected result in curbing inflation. More is needed, and my little knowledge of street economics shows me that the Nigerian economy often defies some fundamental economic concepts that work in developed countries because of our economy’s informal and unregulated nature. The Nigerian government must creatively use other bespoke and practical fiscal and monetary measures to tame our raging inflation.

Paradoxically, there is compelling evidence that inflation continues to rise because of critical government policies. Instead of providing more concerted anti-inflationary measures, the government has added more inflationary steps to the economy. The government cannot confront inflation while imposing limitless taxes, tariffs, and charges on the things that people spend money on daily. The impact of excess tax is on everybody, but the burden is more on people experiencing poverty whose purchasing power has been eroded by inflation. The government cannot tax itself out of our economic predicament. Increasing personal income tax is one way government reduces disposable income to curb demand pull inflation, but the inflation in Nigeria is not because of increase in household income, but caused by cost induced factors. So tax on people whose income has not increased in the past year is a recipe for hardship.

Other factors also imperil government efforts to curb inflation. Imported inflation has been the bane of Nigeria, given the number of raw materials and goods imported into Nigeria from countries with high inflation rates. This is not helped by the new exchange rate regime that has seen the Naira fall to its lowest value in a generation. The government has been trying to control the erosion of the value of Naira to no avail. Increasing cost of energy has pushed  some  businesses to  pack up. These factors have exacerbated the rise of inflation, and unless the government starts tackling them, it cannot effectively win its fight against runaway inflation.

The consequences of inaction are severe and far-reaching. The system requires a set of anti-inflationary measures to relieve the people and companies so that livelihoods can improve, and real incomes recover from shock to encourage people to live and save. Savings and prosperity will fire up investment, production, supply, and consequent demand. If inflation worsens, the economy will, at best, go into stasis, further regression, and possibly a depression. More manufacturers will quit, and unemployment will worsen with even more crime and insecurity. The picture I painted above is not far from us.

Recent statistics about the hunger level in Nigeria occasioned by food inflation are alarming. There is a deteriorating food security and nutrition crisis in Borno, Adamawa and Yobe (BAY) states this lean season between May and September 2024. According to the Government-led Cadre Harmonise analysis released in March this year, in Borno, Adamawa, and Yobe states, some 4.8 million people are estimated to be facing severe food insecurity, the highest levels in seven years. Children, pregnant and lactating women, older persons, and people living with disabilities are among those who are most vulnerable. About 2.8 million of these people need urgent interventions.

The prices of staple foods like beans and maize have increased by 300 to 400 percent over the past year because of a cocktail of reasons. Inflation is outpacing the ability of families to cope, making essential food items unaffordable. Furthermore, the report stated that “malnutrition rates are of great concern. Approximately 700,000 children under five are projected to be acutely malnourished over the next six months, including 230,000 who are expected to be severely acutely malnourished and at risk of death if they do not receive timely treatment and nutrition support.”  The Acting Representative of UNICEF Nigeria argues that “this year alone, we have seen around 120,000 admissions for the treatment of severe acute malnutrition with complications, far exceeding our estimated target of 90,000.”  These statistics are for only 3 states in the Northeast Nigeria. Imagine what it will be for the whole 36 States in Nigeria. There is real fire on the mountain!

This rising hunger is not peculiar to the Northeast. From my knowledge of street economics, hunger and poverty is pervasive across all six geopolitical zones. Increasing poverty is directly linked with more severe economic outcomes. Increasing poverty can result in a more divided society, Issues with housing, homelessness, limited access to healthcare, nutrition poverty and poor living conditions that have a detrimental effect on one’s health. Children living in poverty have less access to education, which will reduce their chances in the future. More families facing poverty will experience conflicts, stress, and domestic violence. Poverty can set off a vicious cycle in which the effects of it act as catalysts for additional episodes of poverty. Increasing inflation and poverty are bad omens that blow us no good. They are bad for our economy. They are bad for our people. The government must pay attention to these factors and be more sensitive in our economic policy choices.

Only some anti-inflationary measures that comprehensively capture the macroeconomic dimensions and provide solutions may work. Poverty alleviation measures are barely temporary and, at best, work in the short run to cushion the effect of heightened inflation and food insecurity. The government should provide solid medium- to long-term solutions to tackle these problems. They should re-evaluate some of their policies to see whether they are inflationary and jettison them to allow good policies to thrive. We can only imagine the unintended consequences of allowing poverty and inflation to fester. The increasing inflation and poverty are creating desperation among a portion of society, which is increasingly becoming despondent and seeing itself at the fringes of society. The implications of this are plausible. Many ordinary citizens are burdened by poverty, hunger, and severe inflation, which have made their lives miserable. The government must take action to alleviate this scourge and help Nigerians lead meaningful lives.

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Bad law, needless levy



By Dakuku Peterside

A few weeks ago, Nigerians were startled by a legislation that had largely escaped public awareness. This legislation, which has since undergone substantial amendment, carries profound implications for the financial health of every Nigerian, sparking widespread controversy.

The law raises several concerns regarding our legislators’ rigour, effort, and dedication to enacting laws. The legislation, which is known as the Cybercrime (Prohibition, Prevention, etc.) (Amendment] 2024 Act. Section 44 (2] (a] of the Act, mandated a levy of 0.5% of all electronic transactions value by businesses specified in the second schedule of the Act, which includes GSM service providers and telecommunication companies, Internet Service Providers, Banks and other financial institutions, Insurance companies and Nigeria Stock Exchange.

To implement this law, the CBN, on the 6th of May 2024, sent a circular to all banks and financial institutions in Nigeria to charge a cybersecurity levy starting from the 20th of May 2024 on electronic transactions by customers, barring a few exemptions. Industry watchers have claimed that the government aimed to earn about N2 trillion per annum, judging by the over N600 trillion value of all such transactions in 2023. This caused an uproar in the country, and most civil society organizations, private sector businesses, labour organizations, and concerned Nigerians used all the media available to them to voice their condemnation of this imprudent law.

The banks and other mandated institutions are to collect the levy and remit it monthly to a designated fund (National Cybersecurity Fund) at the CBN for transmission to the Office of the National Security Adviser (ONSA). The fund’s stated primary purpose is to provide financial resources for fighting cybersecurity crimes in Nigeria.

There are many things wrong with this levy beyond the fact that Nigerians are discontented with government and non-governmental levies and fees plaguing the living light out of them. Some have argued about the interpretation of the law by CBN that the transactions to be charged should be on the businesses mentioned in the Act, not their customers or Nigerians. Others have questioned why this law, created, and signed into law in 2015 by the Jonathan administration, was amended now to include the cybersecurity levy and why the haste to implement it now, especially given the harsh economic conditions occasioned by good-intentioned policies that have had a devastating impact on Nigeria.

The argument on timing is germane given the level of inflation and the devastating degradation of the value of the Naira and, by extension, the purchasing power of Nigerians. Some still argue about the increasing focus of the government to use tax as a significant economic policy for revenue generation, especially in an increasingly volatile economic climate where productivity is low, and businesses are shutting down because of increasing cost of doing business, ranging from the cost of labour, energy, and raw materials. My take on this anchor on the morality behind the levy given Nigeria’s social contract with the state, procedural antecedents in institutional revenue collection for government, the burden on Nigerians on financial transaction-related charges, and the imperfections of our legislative processes.

The pertinent question is why should Nigerians who pay personal and business taxes pay for security in whatever guise or nomenclature? Whether cybersecurity, physical security, or any form of security, it is the Nigerian government’s exclusive and primary responsibility, which is why we pay  tax to the government. Under the social contract between Nigerians and the state, we accept and give out our rights, especially the right to security of our lives, to the state and expect the state to protect us by whatever means necessary. The state provides the security infrastructure, architecture, and personnel to provide security for all. The government singling out an aspect of security and levying citizens to pay for it is tantamount to double taxation when we already pay income tax and allow the government income from our natural resources to provide this service. Unbundling security and taxing some is a prelude to other security tax forms. Should we expect a Banditry levy, terrorist levy, or armed robbery levy soon?

The second question is, when did the office of the National Security Adviser become a revenue-generating and collecting centre? The Nigerian state has explicit provisions for regulatory agencies or public enterprises that provide public goods and services. The office of the NSA is not such and does not have such a mandate. It is an anomaly procedurally to saddle this office with the mundane task of revenue issues, and as a government unit coordinating security, it should receive its funding from the federal government budget. Enacting and implementing laws that go against established procedures affects the structures and systems of the state and sometimes goes against the mandate on which institutions are created.

The third issue is why the national assembly members were screaming at the top of their voices against this law when the same body amended it. Does it mean that they did not understand the law they passed? Or is it that the law was amended and passed without the knowledge of many members passing through the due processes? Is the interpretation of the law by CBN not in tandem with the intentions of the lawmakers? Is there a problem with framing the law caused by language failure? Did the framers mean online or electronic transfer levy? It would be easier for the public to understand the levy if it had come outright as a transaction levy because many people cannot link their electronic transactions and cyber security levy. Where is the ‘cybersecurity’ in transferring legitimate money? The law does not resonate with many Nigerians of average means and education, and they cannot link their everyday transactions to cybersecurity.

Granted, the legislation enacted by the National Assembly is not perfect. It sometimes has some flaws. They are subject to review, revision, or repeal. Because of this, the law is a living thing that changes with the seasons and the passage of time. Remember, errors are not uncommon when enacting laws. Had Magaji Tambuwal, the then-Clerk of the Nigerian Assembly, been successful in getting President Bola Tinubu to sign a version of the “Real Estate Regulatory Council of Nigeria 2023” — which is regarded as phoney — into law, he would have been inducted into the Hall of Fame. This demonstrates that sometimes, legislation approved and accented to by the president may not always accurately reflect the framers’ intentions. Numerous things occur in between.

The fourth issue is the incongruence of the cybersecurity levy while the Taiwo Oyedele committee is working on the harmonisation of multiple taxes, reducing unprogressive taxes and  the multiplicity of legislation that imposes taxes on business. Besides, the cybersecurity levy affects citizens’ living wages. We cannot stagnate household income and continuously increase all cost elements of a living wage (housing, transport, utilities, food) through more charges like cybersecurity levy and not increase poverty in the extreme or diminish consumption income in the main.

The last issue is that the burden of bank-related levies and taxes that individuals pay in Nigeria is too much on them. It will be good for researchers to do a comparative study with other developing countries like Nigeria to determine whether we are in this alone. Bank-related levies include transfer fees, card maintenance fees, card issuance charges, stamp duties, VAT on SMS, and SMS charges for the receiver and sender. This cybersecurity levy will be one too many. Imagine the implication on the cost of doing business, especially post-subsidy removal, post-increase in electricity tariff, the collapse of the Naira, hyperinflation and many charges and levies on businesses.

Existing business levies and taxes include Company Income Tax, Stamp Duties, Petroleum Profit Tax, Capital Gains Tax, Value Added Tax, Personal Income Tax, Withholding Tax, Tertiary Education Tax, one percent of payroll contribution to NSITF, 10 percent of Payroll Contribution to PenCom; one percent of Payroll ITF Levy and National Information Development Levy. Others are Radio and TV Licenses; Police Special Trust Fund Tax levy; Niger Delta Development Commission levy; National Agency for Science and Engineering Infrastructure levy; Land Use Charge; Parking Fee; Consumption Tax; Road Tax; Standard Organization of Nigeria fees; Nigeria Content Development levy; NAFDAC levy; Nigeria Health Insurance Authority contribution; Signage Fees. Touts and street urchins are leveraging the multiplicity of taxes and levies to attack businesses. Businesses are getting it rough and do not need another levy straw that will break their backs.

Cybersecurity levy is peculiar to Nigeria and is not applicable in many developing and developed countries of the world. President Bola Ahmed Tinubu acted well in suspending the cybersecurity levy; many Nigerians are happy about that. There are many reasons to repeal this law or quickly review it with broad-based consultations.

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