Cost jitters as telcos, stakeholders map way for Nigeria’s digital identity transition

The Nigerian government may have kicked off with aplomb plans to transition from national identification cards to electronic identity, but operators in the telecommunication sector are jittery it could mean more humongous capital expenditure coming from their pockets.

In August 2020, Rauf Aregbesola, the Minister of Interior in collaboration with Ali Isa Pantami, the Minister of Communication and Digital Economy, disclosed that Nigeria will be replacing the current plastic national identity card with a digital version.

Further information on the website of the National Identity Management Commission (NIMC) showed that the National Electronic Identity Card (e-ID card) is a chip-based card with multiple functions and it will be given upon successful enrolment or registration into the National Identity System.

“The world has gone digital so that card is no more,” Pantami said during a press conference in Abuja. “Our priority now is digital ID, it will be attached to your database wherever you are.”

Later in the year, NIMC issued a directive backed by the Nigerian Communications Commission (NCC) directing telecommunications operators to set plans for a new SIM card registration in which they are expected to capture the ten fingerprints of all subscribers. Before now, the telcos were mandated by NCC to capture only four fingerprints from subscribers. The new directive from NIMC plans to integrate the data from the telcos into the digital identity management project.

At the National Identification Policy RoundTable organised by BusinessDay Media and sponsored by SeamFIX and VerifyMe, stakeholders including telcos, identity management operators, and a government agency examined Nigeria’s plans to transition from plastic to digital identity. While the consensus was that the project had immense benefits for businesses and individuals, and the government’s private sector-led approach was critical to achieving the project, the cost of achieving the project would need to be addressed to get the buy-in of all stakeholders.

Nigeria’s identity journey

Nigeria’s identity management which was conceptualised by former President Olusegun Obasanjo in 1976 and would only kick-off in 1981 under the civilian elected President Shehu Shagari, has been a long, torturous, and costly journey.

By 2015. the country was estimated to have lost over N121 billion to different national identity card projects.

The current administration said it is committed to seeing the digital project through, so it has uncharacteristically embraced a private-sector led approach. A critical driver of the government’s motivation is coming from the evidence that links economic growth to a proper identity management system.

“Identity is what gives you access to benefits either provided by the state or by private institutions. Your ability to say who you are is what gives you that access to benefits that you can enjoy from the state or as a customer of a private service,” Chibuzor Onwurah, co-founder of SEAMFIX said. SEAMFIX which is working with NIMC on the identity project says its mission is to help organisations improve the way they work by helping them digitise their processes.

What the telcos say

While the telcos agree with the government’s digital ID plans have economic potential, they say there is a need for more engagement to consider the end-to-end of the project.

“This is coming at the time of the COVID-19 pandemic and its economic impact and the downturn of the economy in general. It is a lot of burden on the operators. Already we are saddled with the responsibility of providing security, power, and high cost of operations within this jurisdiction which in other climes is not so. In other climes, you have a robust plug and play scenario,” Shola Adeyemi, director Legal, Regulatory and Company Secretary, Airtel, said.

Gbenga Adebayo, President of Association of Licensed Telecommunication Operators of Nigeria (ALTON) said it will help if the government understands the difference between SIM registration and NIN.

According to him, SIM registration is not meant for the purpose of identity management, instead, it is meant for the reasons of identifying the subscriber on a particular network, the characteristics of the behavior of that subscriber on a particular network

“If you now ask operators to begin to upgrade from the four fingerprint capture to the ten you are asking for a significant hardware change; you are asking for a significant software change and you are asking for the cost of migration,” Adebayo said. “More than that is that it was a burden for subscribers to register. In some places, you want to carry out registration you have to do revalidation of the information provider.”

Can stakeholders find a middle ground?

The engagement with the government is an ongoing process. The National Population Commission (NPC) which is also vitally involved in the process of achieving the transitioning, said there a legal backing to the project.

Obodo Adamu Perpetual, assistant director Vital Registration, National Population Commission (NPC) said it is empowered to register all births, deaths, still-birth by the Compulsory Registration, No 39 of 1979, No 69 of 1992; Caps 67 Law of the Federal Republic of Nigeria and reinforced by Section 24, the Third Schedule of the 1999 Constitution. Essentially, legal national identity is a fundamental human right.

Aguele Esigie, co-founder and CEO of VerifyMe acknowledges that while mistakes have been made in the past that led to money being squandered, there is more on the ground today to believe that the government is genuinely interested in seeing the project through. VerifyMe is one of the companies the government has engaged to ensure a seamless process.

“Part of the problem is the creation of the cost which has been a little bit costly with no private sector partner. The second is distribution. I think there has been a kind of realisation in the government today that we have been registering about 41 to 42 million people in Nigeria and everyone is waiting to use their ID card. But the truth is since they have been registered, they already have digital identities, they are eligible to get and demand services, remote account opening services, social services because they have already been digitsed,” Esigie said.

He also noted that in the future the NIMC would likely come out with a mobile application that will allow every Nigerian who has completed their identity registration to be able to download their digital ID to access services.

But middle-ground for the telcos and the government could lie in technology says Teniola Olusola, President of Association of Telecommunication Companies of Nigeria (ATCON). He noted that NIMC has an API that is supposed to be open for third parties like telecommunication companies.

“It is meant to be an open API and that is one of the reasons the department was placed under the Ministry of Communication and Digital Economy to ensure that access to that API was made available to other third parties. we are deemed as third parties so that we can actually make inquiries into the database and get information or pull data out of our systems into the datasets as required. My arguments will be that when you are dealing with heterogeneous datasets there has to be an overriding masterplan and I thought it should have been in place by now. But if it is not, that is the first start because that is a way forward. And then there will be critical stakeholder engagement as to know how to efficiently access this data and provide any missing data that they require,” Teniola said.

The government plans to keep the registration fee for all Nigerians, at least for the foreseeable future. However, to have a sustainable ecosystem as NIMC is trying to make it, there has to be an exchange of value, says Gbenga Odegbemi, CEO of YourVerify.

“We have seen that government alone cannot finance this. To make sure that there is some form of exchange of value, it has to be a private sector-driven ecosystem. At the core of this is revenue. You must put an ecosystem that allows the private sector to generate a reasonable profit. As you have seen almost every four years we spend between $1 to $2 billion on enrolment as INEC does. We have not been able to fund our national ID project in a sustainable manner for more than 36 years. This is the first time the country is trying to create an ecosystem regardless of who is in government it is kept alive by the private sector. At the forefront of that ecosystem is organisations like VerifyMe, SEAMFIX, and YouVerify,” Odegbemi said.