The current administration led by President Muhammadu Buhari was six years in office as of May 29 2021. From inception to date, there have been a number of policies implemented by President Buhari which deserve to be appraised from the angle of the cost-benefits analysis. One of these policies is the current administration’s preference for the use of bans as a fiscal tool to curtail the impact of certain economic activities seen not to be beneficial to the nation. The latest of these bans is the suspension of Twitter, a micro-blogging platform for which the Nigerian government has come under serious criticisms across the world.
In what the current administration termed the abuse of the ECOWAS charter, President Buhari’s administration closed the Nigerian borders in August 2019. Down the line, the FG imposed a ban on new SIM card registration; acting to protect government interest, the Central Bank of Nigeria (CBN) banned banks in Nigeria from getting involved in cryptocurrency trading.
The border closure affected trade in the West Africa sub-region, especially perishable agricultural produce which is what most of the countries in the sub-region produce and trade in. Nigeria’s export data with Africa shows N2.33 trillion worth of goods were sold to African trading partners in 2018, out of which N1.04 trillion was exported to ECOWAS while N1.29 trillion sold to other African countries. In 2019 when the ban was imposed towards the end of the third quarter, Nigeria’s total export to Africa was N3.92 trillion, representing 68 percent increase over the previous year.
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Surprisingly, there was an increase of 115 percent in export to ECOWAS countries over the previous year in view of the N2.24 trillion trade recorded, in 2019 as against N1.04 trillion in 2018. Export to other African countries equally surged by 30 percent to N2.24 trillion in 2019 compared to N1.29 trillion in 2018.
The honeymoon stopped there. In 2020 when the border closure was in full force, not only did Nigeria’s export to Africa fell by 39 percent to N2.37 trillion in 2020 compared to the previous year, trade with ECOWAS countries plummeted. From N2.24 trillion export trade in 2019, export to ECOWAS reduced to N620.98 billion in 2020, a sharp decline of 72 percent. And to confirm that the ban was the cause of the decline, export to other African countries rose by 4 percent to N1.75 trillion.
The first quarter 2021 export figures were disappointing in the sense that Nigeria only exported N449.84 billion to the whole of Africa with N282.16 billion going to ECOWAS and N167.67 billion going to the rest of Africa.
Traditionally, 80 percent of imports from Africa come from the rest of Africa with 20 percent coming from ECOWAS. For instance, out of N467.04 billion worth of imports from Africa in 2018, only 16 percent came from ECOWAS. In 2019, it was 20 percent of imports from Africa came from the West African sub-region. The portion of import from Africa that came from ECOWAS has since been declining as it was 14 percent in 2020, and 11 percent in the first quarter of 2021.
The ban was also deployed as a tool in the registration of new Subscriber Identification Module (SIM) card. With rising insecurity and fraudulent practices, the federal government, mandated the telecommunications regulatory body, to get every Nigerian registered. The registration was meant to give every Nigerian the National Identification Number (NIN) and to have the data of all subscribers integrated for proper monitoring.
A ban was placed on registering new SIMs, a decision that did not go down well with the people. Notwithstanding, the impact of the ban on new SIM card has been minimal because the telecommunications sector has maintained steady growth in the last few quarters.
The Telecoms sector grew by 9.71 percent in Q1, 2020; 18.10 in Q1 2020; 17.36 percent in Q3 2020, and 17.64 percent in Q4 2020, and that came to an average growth of 15.90 percent for the entire 2020. In the first quarter of 2021, the telecoms sector grew by 7.69 percent. The total voice and internet subscriptions were 184.69 million and 126.08 million respectively as of the end of 2020.
Cryptocurrency came under the hammer of the Central Bank of Nigeria (CBN) when it issued a directive to banks advising them from allowing their platforms as payment and receiving channels. Before the CBN’s February directive to banks, Nigeria had accounted for about $566 million in crypto transactions. Many Nigerian start-ups embraced bitcoin and cryptocurrency trading as ways to escape poverty and high unemployment rates in the country.
Unemployment has been worsened. In the last unemployment rate released by Nigeria’s data agency, the unemployment rate in Africa’s biggest nation rose to 33.3 percent with 23 million Nigerians out of jobs.
The Twitter ban came as the latest in the series of the imposition of ban in Nigeria. Applying its rule, Twitter deleted President Muhammadu Buhari’s tweet which the body considers as promoting harassment, intimidation and violence. And what supposed to be a personal issue between the president and Twitter was escalated to a national issue, leading to the imposition of a ban on Twitter.
Quite a number of small and medium enterprises in Nigeria connect with their customers on social media platforms to advertise their products and services, through person to person, or business to business. The ban on Twitter will further worsen their fragility. This is so because a successful business deal brokered by SMEs could enhance their survival, which won’t be possible during the period the ban lasts.
The ban is also inimical to how foreign investors see Nigeria’s business environment. In some way, the business environment has been made less safe with the rising insecurity. Foreign investors noticed this, and the actions by Amazon to locate its headquarters in South Africa, and Twitter to site its African headquarters in Ghana should be a warning signal that the business environment is a sine qua non for investment attraction.
What must be done?
Since the border closure to Twitter ban, Nigeria’s socio-economic indicators have not improved in such a way as to conclude government took the right decisions. For instance, the border closure fuelled smuggling. Between October 2019 and February 2021, Nigerian Customs across the land borders seized 159,506 bags of rice from smugglers. In other words, smuggling has not been eradicated.
There is no guaranty that the continuous use of the ban as a tool will in any way help the Nigerian government and its people. Therefore, the government needs to address the root cause of the crisis at hand. Smuggling, which the government wanted to stop, thrives because there is low productivity in the country. Nigerians are very hardworking people. What government needs to focus on is the promotion of the business environment. The rural roads need to be upgraded for farmers to seamlessly transport their produce from the farm gate to the market.
“My brother went into tomato farming. At the end of the day, he lost millions of naira. The loss occurs during the movement of the produce from farm to market. So many tomatoes got spoilt during transportation. If the government can address how to preserve this agric produce, the nation will gain a lot”, a stakeholder in the agric value chain in north-central Nigeria said.
The freedom of information is the right of the people, as, through this, democratic governments are held accountable. It is surprising that a government that rode on social media to gain power should not be the one clamping down on the same platforms now that it is in power.
