NITDA bill and what it means for the Nigerian tech startups

NITDA bill and what it means for the Nigerian tech startups

Following series of talks over the past years at the Nigerian legislative space concerning the revamp of the 2007 National Information Technology Development Agency Act (NITDA) of Nigeria’s information and technology body, reports of an intended amendment of the said bill finally emerged on social media. It finally gained confirmation after a leaked link to the alleged amendment copy of the bill were seen circulated and shared on Nigerian social media space.

Over the years, the Nigerian technology industry has always been at the receiving end of change in Nigerian governmental policies of seemingly, from the CBN cryptocurrencies ban, Okada ban in Lagos and reversal in NIPOST regulations.


New initiatives in the bill

Series of new changes were seen in the leaked bill, prominent of which is the sections and subsections that gives fresh powers given to the agency. The said sections entitled the Agency to the following powers

To “enter premises, inspect, seize, seal, detain and impose administrative sanctions on erring persons and companies who contravene any provision of the Act subject to the order of a court of competent jurisdiction.”

“fix licensing and authorization charges, collect fees and penalties as may be necessary for the exercise of its functions under this Act.”

ln addition to the existing penalties contained in NITDA Act, new licensing strategies and penalties surfaced in the leaked bill, despite the existing license regimes Nigerian technological startups are instructed to subscribe to. Therein, NITDA is to determine the issuance of regulations in respect of licenses and authorizations for actors in the ICT and digital economy space.

Another notable change found in the leaked bill is the penalties provided as a consequence of offences arising from the act. In the current NITDA Act, Imprisonments or a fine of 200,000 Naira was stated to be the punishment of first-time violators of the rules contained in the act. For subsequent violators; imprisonment of two years, a fine of ₦500,000, or both will be administered as punishment.

However, on the contrary, an expansion of these penalties was suggested in the leaked bill, and in event of adoption, NITDA will no longer collaborate with the Standards Organization of Nigeria to enforce its regulations.

What is NITDA?

National Information Technology Development Agency is a Nigerian agency created by the NITDA Act 2007. As an agency tasked with the functions of initiating models for the planning, research, monitoring development, standardization, application, coordination, monitoring, evaluation and regulation of Information Technology practices in Nigeria, it is under the purview of the Ministry of Information and Digital Economy as an ICT policy implementing arm.

Unlike the leaked bill, NITDA Act 2007 failed to cloth the agency itself with powers, and it is possible that the Agency will be more actively engaged if the leaked bill found its way into implementation.

Why  lawmakers are furious?

Mixed feelings have traced the content and changes proposed in the leaked bill, while some stakeholders in the country lauded the changes, some Nigerian senators from the southern region of the country were aggrieved and totally against its approval.

According to them, the content of the bill is too harsh on penalties and consequences that will bounce on individuals or companies who refuse to get the necessary licenses and requirements required by the bill.

Noting that the bill could spell some barriers towards the fruition of Nigerian tech startups, they agitated that it doesn’t provide sufficient information needed for qualification of those startups when obtaining licensing and that the bill is too focused on licenses, paying pre-tax profit levies and sanctions on individuals.

In contrary to the reaction of the lawmakers, the Director-General of the National Information Technology Development Agency, Kashifu Abdullahi, had earlier explained in March 2021 that immediate revision of the current act is a necessity in order to keep in pace with the fast-changing digital world.

According to him, the proposed bill is not only aimed towards the promotion and implementation of policies that support local content, and accessibility to Nigerian digital services, it will also be engineered towards ensuring a sound regulatory framework for the growth of the Nigerian technological sector and digital economy.