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Weighing economic implications of SIM card blockage | Naija.NewsBurrow

Weighing economic implications of SIM card blockage | Naija.NewsBurrow





COVID-19 has additional revealed the importance of the information and interactions innovation (ICT) sector in Nigeria, and across the globe.

As exposed by the National Bureau of Data (NBS), the IT sector in Nigeria flourished enormously, regardless of the challenges seen by other sectors of the economy. It not only contributed substantially to the country’s Gross Domestic Product (GDP), the industry to a large level bridged the space developed by the forced lockdowns caused by the corona virus pandemic.

With the pandemic going into about 15 months now, and without any sign of slowing down; individuals, companies, churches, schools, federal government institutions, to name a few found, embraced, and adapted to the brand-new regular, where it became possible to perform classes, services, conferences, and seal offers online without physical interactions. This has been enabled by the power of Web, and mobile numbers.

Although there are still some 114 gain access to spaces with some 25 million Nigerians yet to be served telephone systems services, it is worthy of note that as at November 2020, the Nigerian Communications Commission (NCC) said Nigeria had about 208 million active customers from 285 million linked lines. There were 154.8 million Internet users by means of the narrowband, while broadband users were 86 million.

However, experts believe strongly that this growth trajectory is seriously under danger should the Federal Government make good its plan to block SIM cards not connected to their NIN by April 6.

According to them, the gains currently experienced in the sector will certainly be eroded. This is simply because lots of Nigerians, who have been jobless and underemployed now depend more on eCommerce, leveraging apps like WhatsApp, Facebook, Instagram, snapchat, to name a few as new business platforms.

Instructively, statistics from the NBS put Nigeria’s joblessness rate at the end of second quarter of 2020 at 27.1 per cent, showing that about 21.7 million Nigerians stay unemployed.

Hinging his choice on rising insecurity in the land with no empirical information to back it, the Minister of Communications and Digital Economy, Dr. Isa Pantami, on December 15, 2020, required the suspension of registration of new SIM cards in the country. He also directed that after December 30, 2020, all SIMs not signed up with valid NINs on telecoms networks would be obstructed.

The instruction was later extended following extensive opposition against the earlier announcement and three weeks’ extension was given for customers without NIN from December 30, 2020, to January 19, 2021.

It also offered six weeks’ extension for subscribers without NIN from December 30, 2020, to February 9, 2021, but many organisations had required additional due date extension or outright suspension of the NIN registration procedure due to the big crowds, of those yet to have their NINs, but gather daily in their hundreds at NIMC workplaces and outlets in the country amidst the 2nd wave of COVID-19

The minister, yesterday, after a meeting with stakeholders on Monday, in Abuja, ordered the extension by 8 weeks. This implies that after April 6, unlinked telephone lines will be blocked.

Although the minister’s intent need to have been to make sure that Nigeria has a reliable central database, an effort that has avoided the country for years, the timing, and process without adequate preparation has left much to be desired.

There are issues that Nigerians in the town, those in medical facilities, the elderly ones, who utilize phones to interact with their loved ones might eventually be cut off from their networks due to the fact that they have no NINs.

Up until now, the operators have gathered about 56.18 million NINs, which have actually been sent out to the NIMC database for verification, exposing over 150 million lines, if the multi-SIM nature of the country must likewise be factored in.

Taking a look at this direct exposure, market watchers are worried that the proposed blockage of SIM cards might be disadvantageous for an economy that is fighting to stay afloat from economic downturn, and may not fix the problem of insecurity in the land.

Depression in growth of telecoms customers

IN 2001, Nigeria only had a meagre 400,000 lines from the defunct Nigeria Telecom Limited (NITEL). However practically 20 years later, the nation can take pride in over 208 million active lines. Evaluating this figure in the context of the years, it showed almost on a yearly basis that about 10.8 million lines were being triggered, while month-to-month, on the average, some 907,896 lines come on board. This growth has revealed the resilience of the telecoms sector in Nigeria.

Usually, these data have actually revealed that considering that the regulation by the Ministry of Communications and Digital Economy stopping telecoms operators from triggering and signing up new lines, some 1.8 million lines have not come on board in the last six weeks, and consequently, there might have been no brand-new business. Within this period also, kidnappings and other vices have actually not eased off.

It must be kept in mind that the 2.5 percent Yearly Operating Level (AOL) paid by the telecoms sector comes from boost in memberships development.

More task losses imminent

BETWEEN 2017 and 2020, the Global System of Mobile Communications Association (GSMA), disclosed that the mobile communication industry created nearly half a million jobs in Nigeria, and contributed $21 billion to the nation’s gross domestic product (GDP), or 5.5 percent of the total GDP. But analysts believe that this growth would be hindered by the prepared regulation.

Already, the Arewa Telecom Operators Agents and SIM card Dealerships Association (ATOASDA) has actually declared that some 2 million Nigerian youths have been rendered jobless by the suspension of sale, registration and activation of SIM cards by the ministry’s directive.

President of ATOASDA, Hassan Yakubu, stated: “As an authorized association under Corporate Affairs Commission of the Federal Republic of Nigeria, we are fully in assistance of the FG measures to secure the life and residential or commercial property of citizenry.”

He, however, observed that the Federal government must tread carefully thinking about that all readily available research deals with the reasons for insecurity across the country have been connected mostly to youth unemployment.

Yakubu stated the earnings of telecoms organization partners, personnel and the representatives, majority of who are within the age bracket 20 to 40 years in the value chain is identified by the number of activations/SIM registration performed within the month.

Drop in telcos’ earnings and cut in tax payments to govt

MARKET watchers are also fretted that the fall in memberships will negatively affect operators’ earnings and consequently affect their tax payments to the Federal Government.

The GSMA report informed that the digital economy contributed $1.8 billion in tax, comparable to 16 per cent of Nigerian federal government’s tax earnings.

In 2020, the Business Income Tax (CIT) report by the NBS exposed that telecoms in Nigeria paid an overall of N148 billion as earnings tax in the very first 3 quarters.

According to the NBS report, the company income tax from telecoms and expert services represented 23.5 percent of the overall CIT paid to government in nine months, which stood at N6286 billion. The quantity, which also included tax paid by professional services, represented the biggest paid by any sector in the duration under review.

A breakdown of the payments for the 3 quarters revealed that N288 billion was paid as CIT by the companies in the telecoms sector in the first quarter of2020 In the second quarter, N638 billion was paid, while payment for the third quarter stood at N555 billion.

Market’s viewpoint

SPEAKING on the problem, Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, stated there is need to deal with the matter with care.

” I feel so because, if the right choice is not made and information is not passed by federal government and federal government is led to take the incorrect choice, it can ruin the good of the market. So, at our level as a stakeholder, we are dealing with government. We are on the Ministerial Committee.

” The advice to federal government is that we need to continue to thread with caution because telecoms today is the motorist of the economy. If you put the subscribers at risk, a significant one for that matter, the danger is on the entire economy,” he stated.

Adebayo thought that such challenge will also send incorrect signals to financiers and those, who may want to do company in Nigeria.

Of course, Adebayo stated Nigeria deserves a trusted and reliable nationwide database, and the market is committed to working with all the stakeholders to get this done.

From his perspective, the Nigeria National Planner, Alliance for Affordable Web (A4AI), Olusola Teniola, said the worst case is a potential loss of 51 per cent of industry profits for all MNOs and company that rely on SIMs to access their services up until a NIN can be connected to the SIM.

According to him, the economic impact will likewise appear considering that a lot of SIMs are pre-paid and amounts might need to be refunded if an operator disconnects/blocks a SIM, including that the financial services and other sectors reliant on the SIM will be affected.

Creator, Jidaw Systems, Jide Wonder, said in the digital age, there is definitely need for digital identities to improve effectiveness and transparency throughout all sectors for citizens and federal governments. And that the NIN-SIM workout is definitely practical for boosting security, he stressed.

However, he said there must be balance in carrying out digital identities for security with the requirement to guarantee development of vital aspects of the digital economy is not stifled.

Wonder described that lots of digital processes– ecommerce, Fintech, digital education, digital health, digital agriculture, to name a few, are dependent on the use of SIM cards.

He said: “Savings account, digital wallets, bank transfers and even new digital procedures can open new value, build intelligence and develop services to resolve our developmental difficulties.

Additionally, existing digital variations are currently a concern exposed during COVID-19 lockdowns. This has actually made digital addition particularly crucial in the new typical, post-COVID age. We need to ensure nobody is left and everybody can participate meaningfully in the age of cyber. The weak level of digital education and inclusion affects the nation’s preparation for the 4th commercial transformation (4IR).

” So while enhancing security through digital identities is vital, we require to effectively think about the economic impact of such security steps and the requirement to accelerate digital inclusion.”

Dealing with insecurity

WONDER kept in mind that numerous options are available however federal government has all the realities and information it utilized for picking the NIN-SIM option.

According to him, no alternative is best however choices are examined in regards to functionality and capability.

He said concerns have actually furthermore risen in view of the nature of processes in addition to the present spread of COVID-19 cases in the nation.

” So it’s a concern of re-examining the processes to make them more efficient and as contactless and compliant with COVID-19 procedures as possible.

Weighing financial implications of SIM card blockage

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Weighing financial ramifications of SIM card obstruction

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Written by Funmi Aiyelomo

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