BusinessDay
NigeriaDecides2023

How Nigeria’s Twitter ban will stifle digital ecosystem

Toyin Akan, an online sales strategy consultant in an interview with BusinessDay stated that in the year 2020, she received over 500 new small business clients who wanted advice on how to take advantage of platforms like twitter and instagram for their business. “It was more sales marketing than I have ever done before,” she added. Like never before, small and medium sized businesses in Nigeria are rapidly taking advantage of social media and digital platforms to advance their businesses in a world where online interactions have become the new normal.

SMEs make up over 90% of businesses in Nigeria, however the challenges they face are more than the support they receive. From high interest on loans, to bad infrastructure, unfavourable government policies, constantly rising inflation rates and fuel prices, an ever dwindling exchange rate. The SMEs are striving to survive. Then came the year 2020 with the pandemic that took the lives of millions globally. SMEs were forced to consider new ways of doing business, this involved digitizing their businesses on various fronts from their marketing to sales and customer relationships.

Businesses that had never considered online platforms for marketing had to quickly align, adopt, innovate or die. The use of social media platforms skyrocketed and it became obvious that not only was digitalization of SME operations relevant, it was also imperative that the government should support in every possible way the advancement of technology and digitalization for businesses in Nigeria. Unfortunately, the reverse is the case, with the banning of twitter and a continued show by the government of its dislike for any social media platform that promotes freedom of speech.

An interview with some small and medium enterprises in Nigeria showed the transformation of a number of businesses from brick and mortar to digitally savvy businesses. It also showed the emergence of new ventures through digital technologies. One such business was Eduanalyst.NG an educational consultancy that operates online with no physical assets to its name. Our business provides educational consultations for students both home and abroad. Platforms like Twitter have enabled us to attract over 40% of our student clients where we provide them the guidance to succeed in their educational goals. According to its founder, platforms like twitter enabled the access to customers in more ways than it could ever do in physical marketing.

The pandemic has radically transformed how SMEs interact with their customers with a dramatic surge in financial technology platforms, which range from mobile apps to finance apps and social media platforms. Digitalization experienced rapid growth in 2020 due to the global demand for financial technology apps and social media platforms for trade purposes that substituted the need for face to face transactions for small and medium businesses worldwide.

The estimated surge in the last couple of years was a 132% leap in finance apps and social media app downloads just between Q1 2019 and Q1 2021. Finance apps for the purpose of business were downloaded 4.6 billion times in 2020 (+15% YoY), according to AppAnnie. According to datareportal.com, the usage of the internet in Nigeria increased by 2.2 million (+2.6%) from 2019 and 2020. Between April 2019 and January 2020, social media users in Nigeria increased by 3.4 million (+14%). Between January 2019 and January 2020, mobile connections in Nigeria grew by 12 million (+7.7%).

Mobile apps for marketing, financial management and customer interaction played a key role in sustaining businesses both small and large during the period of the pandemic advancing digitization and financial technology across the globe and in Nigeria with a large population of technologically marginalized communities. According to a report by State of Finance App Marketing 2021 a US-based mobile marketing analytics company, finance and social media app installations surged in Sub-Sahara Africa, starting in Q2 2020 with Nigeria having the highest number of app installations for business, marketing, investment and customer relationship management in Africa growing at +160%.

Other countries in Africa also experienced this growth, with Kenya up 100%, and South Africa rising by 52%.

A major factor that gave rise to growth of app installation and use of social media platforms in 2020 during the pandemic was the need for marketing. Since Q2 2020, when the COVID lockdowns began, the number of apps investing in marketing increased in all regions of Nigeria. Market spending in Nigeria rose the highest to 150% since the second quarter of 2020. The country’s cost per install (CPI) was up 70% since Q2 2020, leading to a spike in spending.

Other countries like South Africa also saw a significant increase of about 33% since the first quarter of 2020.

According to the report, the high spending in Sub-Sahara Africa was driven by fierce competition as apps employed aggressive marketing tactics. The inability of businesses to interact in person with their customers made marketing apps and social media platforms paramount to the success of businesses in Nigeria.

Then the Nigerian government banned twitter

On the 4th of June, the Federal Government of Nigeria through the Minister of Information and Culture, Alhaji Lai Mohammed, suspended the use of Twitter in Nigeria indefinitely. The reactions to government’s action have been different shades of grey as several organizations have chosen to “do nothing”, while some media and international bodies continue to lend their voices in support of ordinary citizens calling for the lifting of the suspension on Twitter. While the ban of Twitter continues to gain international attention, the National Broadcasting Commission (NBC) by way of an advertorial in national newspapers directed every online broadcast service provider and social media platforms to obtain service licenses.

Financial institutions have been stumped as they try to understand the digital and social media ban and new rules licensing rules. In the same week of the ban, Nigeria’s economy lost 6 billion Naira in 48hrs of the ban of Twitter. According to the Netblock platform, a single-day total internet outage would cost the country N48.596 billion in economic value while Nigeria will lose N10.885 billion per day if WhatsApp, Facebook, Instagram, YouTube, and Twitter are all shut down.

Mr Adeyemi Special Assistant to the President (Media) in the office of the Minister of Information and Culture, Abuja stated that the “Federal Government has directed the National Broadcasting Commission (NBC) to immediately commence the process of licensing all OTT and social media operations in Nigeria. The Attorney General of the Federation and Minister of Justice, Abubakar Malami, also threatened that Nigerians who defy the Twitter ban will be prosecuted. The ban constitutes an unwarranted attack on the corporate, business and professional interests of organizations, SMEs and individuals legitimately managing their affairs on Twitter, including but not limited to the entrepreneurs, researchers, educational institutions, NGOs and media. As at the third quarter of 2020, Twitter accounted for 61.4 per cent of Internet users in Nigeria, coming after WhatsApp and Facebook messenger, according to Statista.

The National Broadcasting Commission (NBC) to immediately commence the process of licensing all OTT and social media operations in Nigeria, could be an attempt to smuggle in through the backdoor, the Social Media Bill, which Nigerians have roundly rejected. Unsurprisingly, many believe that the present Twitter ban by the government is a poorly concealed dress rehearsal for the full censorship of all OTTs (including YouTube, Facebook, etc.) and social media operations in Nigeria. It is in this context that we draw attention to recent reports that the Federal Government is engaged with the Chinese authorities to build an internet firewall in Nigeria so the government can easily block any organ they want. This decisions will cause a ripple effect on the economy resulting in multiple losses by businesses who rely solely on online platforms for marketing and services.

In an interview with a Nigerian fashion startup, Godsoutline, the founder mentioned how it has accessed over 90% of its customers from its social media handles without ever having to do any physical face to face marketing or widow shop advertisement. “we produce originally made African fabrics, bespoke tailoring fashioned according to the demands of our customers online and we make worldwide deliveries. The ban of twitter has caused us the loss of over 38% of our clients especially from foreign countries”

The growth of entrepreneurship in Nigeria is spurred by digitalization, transforming the way they do business and interact within the Nigerian and global market. Businesses have embraced digitalization to advance, thrive, and positively affect their communities. Digital and technological platforms have increased customer experience and provided significant customer interaction and engagement using through multiple communication channels such as twitter. According to Statista, social media use and penetration in Nigeria between 2017 and 2021, the increased from 18million to 33 million and this figure is expected to grow to 44.63 million users in 2025.

 

Most companies were about 10-15 years behind where they needed to be digitally savvy when the pandemic struck, and they have been able to rapidly close that gap in the year 2020 and 2021. Developing a good social media presence has helped SMEs reach out to customers, attract new markets, connect with old and potential customers, build their brands, and increase company sales. They have also been able to actively connect with clients and build relationships to earn customer’s confidence and build productivity.

Today small, medium, and large firms are developing mobile apps for their businesses enabling significant growth in businesses where customers can gain access to products and services rendered by having enough information that will drive engagement. New businesses are emerging from the pandemic as digitally savvy, more risk-tolerant, more agile, and more experimental than their predecessors.

In an interview with the founder of an insurance company Aetna. The company normally made use of a traditional education reimbursement policy for its staff, but as the pandemic progressed, they scaled up and focused on employee development with a strategic talent plan. “I believe that in the next 10 years we will be able to do three times the normal reimbursement rate for our employees with the use of online educational platforms”. The evidence from various small businesses shows that there is no going back in the advancement of digitalization in the world and acts like banning of twitter and the anti-social media behavior of the Nigerian government will only keep Nigeria in the backburner while the world progresses.

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