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Nigeria Achieves 70% Broadband Penetration

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Telecoms sector regulator Nigerian Communications Commission (NCC) has said going by the long and short term targets of the National Broadband Plan (NBP), the country has achieved 70 per cent broadband penetration.

Its Executive Vice Chairman/Chief Executive Officer, Prof Garba Umar Dmanbatta, who spoke in Abuja with IT editors during a media interaction, said though the country has gone beyond the 20 per cent minimum broadband penetration as envisaged by the NBP, it is yet to hit the maximum target of 30 per cent.

He said: “Our performance shows that we as a nation have achieved 70 per cent broadband penetration. To meet the maximum target of 30 per cent broadband penetration, all other agencies that have roles to play, must perform the roles assigned to them by the NBP document.

“The NBP stated that the country must achieve five-fold in broadband penetration, but this of course depends on the minimum and maximum threshold.

“By multiplying four per cent minimum level of broadband by five, which represents the five- year broadband plan, it will give 20 per cent minimum broadband target and by multiplying six per cent maximum broadband penetration as at 2012 by the five years broadband plan, it will give 30 per cent broadband penetration, which is maximum target at the end of 2018.

“Nigeria had in 2017, surpassed the minimum target of 20 per cent, working towards achieving the maximum target of 30 per cent by the end of 2018. This is according to the NBP.

“As of today, Nigeria has achieved 22 per cent broadband penetration, which is close to achieving the 30 per cent.

“The achievement in broadband penetration gave rise to the first phase licensing of Infrastructure Companies (InfraCos) to drive broadband infrastructure deployment that will enable broadband penetration.”

According to CEO, the licence was planned to cover six geopolitical zones of the country, as well as Lagos that was mapped out as a zone for the purpose. MainOne was licensed to cover Lagos Zone, iConnect, a subsidiary of IHS was granted licence to cover Northcentral zone.

“These two zones were licensed before I came on board as NCC’s EVC, and it was during my tenure that we licensed additional five zones. They include Northwest, Northeast, Southwest, and Southeast, Southsouth.

“The beauty of the licence is that it is cheap because the NCC is not keen at making so much money in licences. We are building a system that will make Nigeria Inter and interconnected,” he said.

He recalled that on assumption of office in 2015, the management of the Commission unveiled the Eighth-Point Agenda for the industry, among which is broadband penetration, stressing that Commission, under his leadership, is keen at driving broadband penetration in the country.

“Before we came on board in 2015, there was a Presidential Broadband Committee set up by the Federal Government and the committee was chaired by the former NCC Executive Vice Chairman, Dr. Ernest Ndukwe and Zenith Bank Chairman, Mr. Jim Ovia. The committee did a good job in coming up with a detailed five-year National Broadband Plan (NBP) from 2013-2018 for the country.

“On Page 9 of the NBP, it stated that broadband penetration as at 2012 was between four and six per cent and there were measure through which broadband penetration could be achieved,” Dambatta said, adding, however, that the achievement of broadband penetration is not the responsibility of NCC alone, but a combined responsibility of agencies, such as the National Information Technology Development Agency (NITDA), NigComSat, Galaxy Backbone, and other critical stakeholders, such as telcos. “NCC and other agencies of government were given their roles to play in other to achieve faster broadband penetration,” he insisted.

On the challenges facing the achievement of NBP, he said there are national and regional challenges to broadband penetration. “In these two broad areas of challenges, there are backbone infrastructure challenges as well as challenges of broadband access in underserved and unserved areas of the country.

“In the area of access, we have about 200 access gaps but through the effort of NCC, we have been able to reduce them to about 190. Nigerians living within the 190 access gap areas, are not experiencing telecommunications services and this is a challenge we need to address as a country.

“It addresses the challenges, there is need for capacity building in order to leverage ICT to do greater things and in better ways. So, we need to sensitise the people and empower them with ICT tools that will make them achieve their dreams.

“NCC for instance, is pioneering the Advanced Digital Acquisition Programme for tertiary institutions, where we have the highest concentration of talented youths. “By the time they acquire the skills, they will be able to develop ICT Applications. NITDA is also involved in ICT training and skills acquisition through its sponsored scholarship programme for students studying ICT related courses up to doctorate level.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Telecommunications

Telecom Tax, Other Levies Back on the Table for $750m Loan

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In a bid to secure a $750 million loan from the World Bank, Nigeria is considering the reintroduction of previously suspended telecom taxes and other fiscal measures.

This potential move comes as part of the Stakeholder Engagement Plan for Nigeria – Accelerating Resource Mobilisation Reforms program between the country and the World Bank.

The program, aimed at strengthening the government’s financial position by enhancing its capacity to manage and mobilize domestic resources effectively, outlines plans to improve tax and customs compliance and safeguard oil revenues.

Among the proposed measures are the reintroduction of excises on telecom services and the EMT levy on electronic money transfers through the Nigerian Banking System.

President Bola Tinubu had previously ordered the suspension of the five percent excise duty on telecommunications and the Import Tax Adjustment levy on certain vehicles in July 2023.

However, negotiations between the government and the World Bank suggest that this suspension may be lifted to meet the targets of the new loan program.

The World Bank’s contribution of $750 million constitutes a significant portion of the program’s budget, with the government expected to contribute $1.17 billion through annual budgetary allocations.

The proposed tax reforms under the ARMOR program are expected to have far-reaching implications across various economic sectors.

Stakeholders that would be affected by these measures include telecom and banking service providers, manufacturers of goods such as alcoholic beverages, tobacco products, and sugar-sweetened beverages, as well as the general tax-paying public, importers, and international traders.

Key industry groups, such as the Association of Licensed Telecom Operators of Nigeria, are being engaged regarding the excise duties on telecom services.

The planned reintroduction of these taxes is part of a larger governmental initiative aimed at reforming tax and excise regimes, enhancing the administrative capabilities of tax and customs, and ensuring transparency in oil and gas revenue management from 2024 to 2028.

The program also emphasizes the importance of engaging vulnerable groups to mitigate any disproportionate impact of these changes.

Additionally, the program outlines specific allocations for technical assistance, including investments in better data sharing systems, risk-based audits, compliance processes, and capacity building for institutions such as the Federal Inland Revenue Service and the Nigeria Customs Service.

While the reintroduction of telecom taxes and other levies may face resistance from some stakeholders, the government sees them as essential steps toward achieving its fiscal targets and unlocking much-needed financing for development projects.

As negotiations with the World Bank continue, Nigeria must balance its revenue needs with the potential impact on businesses and consumers.

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Telecommunications

Nigeria’s Mobile Subscriptions Drop by 5.4 Million in Q1 2024, NIN Enforcement Blamed

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Active mobile subscriptions dropped by 5.4 million in the first quarter of 2024, according to data from the Nigerian Communications Commission (NCC).

The total active mobile subscriptions stood at 219 million, a 2.4% decrease from the previous quarter’s 224.4 million.

This decline has been directly attributed to the stringent enforcement of the National Identity Number (NIN)-Subscriber Identity Module (SIM) linkage policy by the NCC.

Since its inception, the policy has aimed to bolster national security measures and enhance accountability within the telecom sector by mandating the linkage of mobile phone numbers to individuals’ unique NINs.

The regulatory directive, which came into effect in December 2023, required telecom operators to deactivate SIMs not linked to their owners’ NINs by February 28, 2024. The process unfolded in three phases with subsequent deadlines set for March 29 and April 15.

However, due to various challenges and requests for extensions, the final phase was postponed to July 31.

During this period, over 40 million lines, encompassing both active and multiple lines registered to a single subscriber, were reportedly barred by telecom operators.

The majority of these lines were found to be inactive, suggesting a considerable impact on non-compliant subscribers.

The National Identity Management Commission (NIMC) disclosed that as of April 2024, a total of 105 million Nigerians had enrolled for the NIN, indicating a widespread response to the government’s initiative to bolster identity verification processes.

In April 2022, the telecom sector experienced a similar wave of disruption as operators commenced the initial phase of enforcing the SIM-NIN rule.

During that period, over 72.77 million active telecom lines were barred, signaling a pivotal moment in regulatory compliance efforts.

MTN Nigeria, the country’s largest telecom operator, revealed in its first-quarter 2024 financial report that it had deactivated 8.6 million lines due to non-compliance with the NIN mandate.

However, the company emphasized its efforts to minimize the net impact of barred subscribers through effective customer management strategies.

Karl Toriola, CEO of MTN Nigeria, underscored the resilience of the company’s customer value initiatives in mitigating subscriber churn and driving gross connections amid regulatory challenges.

Despite the substantial drop in active subscriptions, MTN Nigeria closed the quarter with a total of 77.7 million subscribers, showcasing the effectiveness of its retention strategies.

As Nigeria navigates the evolving telecom landscape amidst regulatory reforms, stakeholders anticipate further measures to enhance compliance and fortify the integrity of the country’s telecommunications ecosystem.

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Fintech

Fintechs Instructed to Report Cryptocurrency Transactions to Authorities in Nigeria

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Fintech companies across the country have been instructed to report all crypto trades to relevant authorities.

This directive comes amidst the recent freezing of 105 accounts across nine fintech firms suspected of various illegal activities, including unauthorized forex dealings, money laundering, and terrorism financing.

The Economic and Financial Crimes Commission (EFCC) obtained an interim court order on April 24, 2024, to freeze these accounts for 90 days as part of ongoing investigations.

Sources close to the matter suggest a connection between these freezes and heightened scrutiny of cryptocurrency transactions.

Following these regulatory actions, several prominent fintech players, including OPay, Moniepoint, PalmPay, and Kuda Bank, have been directed to suspend the opening of new accounts temporarily pending evaluations of their Know Your Customer (KYC) processes by the Central Bank of Nigeria (CBN).

The frozen accounts are part of a broader investigation by the EFCC into 1,146 bank accounts suspected of manipulating the foreign exchange market through cryptocurrency platforms.

The EFCC believes that some account owners exploited cryptocurrency platforms to manipulate the FX market.

In response to these developments, fintech firms have started implementing stringent measures against cryptocurrency transactions.

Moniepoint, for instance, notified its customers that it would close accounts engaged in crypto or virtual asset transactions and share their details with relevant authorities.

Similar warnings were issued by other fintech players like Paga and OPay, emphasizing their stance against crypto-related activities.

During a recent industry event, Tosin Eniolorunda, founder and CEO of Moniepoint, urged participants in crypto Peer-to-Peer (P2P) markets to cease their activities due to regulatory prohibitions.

He highlighted the risks associated with engaging in such activities, citing potential legal repercussions.

Eniolorunda linked the recent regulatory actions to the prevalence of fraud in fintech apps and emphasized the renewed focus on KYC and Anti-Money Laundering (AML) measures.

He alleged that some P2P crypto activities contributed to the manipulation of the Nigerian currency, the naira, prompting regulatory intervention.

This latest directive underscores Nigeria’s broader crackdown on cryptocurrency platforms, particularly Binance, which began earlier in 2024.

The government has expressed concerns about the role of crypto platforms in currency speculation and their impact on the devaluation of the naira.

This regulatory tightening reflects the government’s efforts to maintain financial stability and curb illicit financial activities in the country.

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