ALTON has made a submission signed by the Chairman, Engr. Gbenga Adebayo and Executive Secretary, Gbolahan Awonuga to an invitation from the Joint Committee of the Senate and House of Representatives on ICT and Cyber Security for a public hearing on the Bill for an Act to repeal the National Information Technology Development Agency Act, No 28 2007 and enact the National Information Technology Development Agency Act, to provide for the Administration, implementation, regulation of information technology systems and practices as well as digital economy in Nigeria and for related matters, scheduled for 2nd February, 2023.
They stated that have taken a careful read of the Bill and wish to bring the following aspects of the Bill to their attention.
i. Powers of the Agency
By the provisions of Section 6(1) and (12) of the Bill, the Agency is empowered to “implement all government policies on information technology and digital economy,” and “issue and renew licenses and authorizations for the provision of information technology and digital services.” What constitutes information technology and digital economy are defined in Section 33 of the Bill. By the said provision of Section 33, “Digital Economy” is defined to mean “any aspect of the Nigerian Economy that is based or driven by digital technologies,” while “Information Technology” is defined to include “all forms of technology used to create, store, exchange and use information in its various forms (business data, voice, conversation, still images, motion pictures, multimedia presentations and other forms including those not yet conceived).”
Distinguished Members of the Senate Committee ICT and Cyber Security, going by the foregoing, it is apparent that, the Agency is being empowered to regulate activities which are already under the purview of the Nigerian Communications Commission (“NCC”). Presently, the NCC regulates the activities of all telecommunications companies that fall within the purview of digital economy and information technology.
Specifically, the NCC with regards to digital economy is responsible for the monitoring and implementation of the National Broadband Plan (2020 – 2025) and the National Digital Economy Policy and Strategy. 25th January 2023.
Closely related to the above are the provisions of Section 6(2) of the Bill, which empowers the Agency to test and approve the use of information technology infrastructure and services before adoption in Nigeria and Section 20, which clothes the Agency with powers to make regulations and issue licenses and authorization for operators in the information technology and digital economy sector.
This again replicates the power of the NCC, which includes “carrying out type approval tests on communications equipment and issuing certificates on the basis of technical specifications and standards prescribed from time to time by the Commission” as stipulated by the provisions of Section 4(n) of the Nigerian Communications Commission Act (NCA), 2003, and for which the NCC Type Approval Regulations exists.
If the Bill is passed as presently constituted, there is the risk that the Agency, acting properly under the Bill may issue regulations, guidelines and standards with regards to the use of information technology and digital services, which will conflict with the functions of the NCC. It will also result in double and possibly conflicting regulation for telecommunications companies in Nigeria. In the circumstance, we humbly request that since telecommunications are already being regulated by the NCC with regards to information technology and digital services, the Distinguished Members of the Committee have telecommunication companies excluded from group of persons (“Operators”) who will come under the control and regulation of the Agency with regards to information technology and digital services.
ii. Establishment of the National Information Technology Development Fund
The Bill, by Section 13, seeks to establish a Fund, which is to be known as the National Information Technology Development Fund (“the Fund”), which shall be used for the advancement of the country’s digital economy objectives and related purposes. In order to fund the activities of the Fund, the Bill provides that, Companies and Enterprises, including mobile and fixed telecommunications companies with a turnover of N100,000,000 (One Hundred Million Naira), shall pay a levy of one percent of the profit before tax.
While ALTON as an association and our members as individual corporate entities are always observant of their tax obligations and other responsibilities, we submit that the tax sought to be introduced by the Bill, in addition to existing taxes and levies will overburden telecommunication companies.
Presently, the telecommunications companies in Nigeria are overburdened with over 39 different taxes and levies, a bulk of which are multiple or excessive. If this new tax is added to existing taxes, it will effectively increase Nigeria’s corporate income tax rate to about 36% which is one of the highest rates in the world. This will not give a good image about our country and give the impression that our Campaign for ease of doing business in Nigeria is not genuine.
We therefore, humbly pray for telecommunication companies to be exempted from this head of tax.
iii. Power of the Agency to Seal Premises and Impose Administrative Sanctions
By the provisions of Section 6(7), the Agency has the jurisdiction to enter premises, inspect, seize, seal, detain and impose administrative sanctions on erring persons and entities who contravene any provision of the Bill. While our members as law abiding entities are not averse to being regulated, nor do they have the intention to disobey any law, rule or laws of our country, we feel that Section 6(7) is too broad and could give room for abuse of power by the Agency.
Our fears are founded on the fact that, the Bill does not provide for prior warning/notice to be issued to the defaulting person or entity before the Agency exercises the power to enter premises, inspect, seize, seal, detain and impose administrative sanctions on erring persons and entities. Although the Section states that such actions by the Agency are subject to orders of a court of competent jurisdiction, the Bill fails to stipulate whether the Agency is to first seek and obtain orders of court before exercise its powers to sanction defaulting persons or entities or such orders could be obtained after the Agency exercise its powers under the Bill.
Where the order of court is to be first sought and obtained before the Agency undertakes any of the actions mentioned in Section 6(7), the Section is silent as to whether the orders are to be obtained ex-parte or on notice to the person or entity against whom the orders are sought to be obtained.
While the above steps, intended to ameliorate any excesses are proposed, we will prefer the total exclusion of telecom companies from the ambit of the Agency’s operations as there are no provisions for its liaising with the NCC in promulgating any regulations. The fear that its regulations may conflict with existing NCC regulations or duplicate and further complicate them are not unfounded since there is no requirement by the Bill for synchronization between the Agency and NCC.
iv. Classes of Licences and Authorisations
By the provisions of Section 21 of the Bill, the Agency is empowered to classify its licenses and authorizations under any of the following: Product License; Service Provider License; and Platform Provider License.
Besides mentioning the various categories of licenses, the Bill does not define what these classes of licenses mean, neither is the Bill explicit on the types of activities which are covered by each class of license. The danger in the Bill not defining these licenses and category of activities which they cover is that, the Agency may inadvertently appropriate more powers to itself than intended to be delegated to it by the legislature or, the Agency, may by error, seek to regulate activities already under the regulation of other regulatory agencies.
Distinguished Members of the Committee, the ideal circumstances, is for these classes of licenses to be fully defined, while the conditions for the grant of same, may be left for the regulations to be issued by the Agency.
We believe that the role of NITDA as an agency is for the development of the ICT sector and the focus should be of how to empower the agency on this development and not another regulator for the industry thereby causing unnecessary confusion and disestablishing the gains the sector has made so far to the Nigeria economy. Therefore, Distinguished Members of the Committee, we have made our submission as our existence as a going concern will be threatened by effect of the Bill, if passed as presently constituted.
They conclude by saying
“Please be assured that ALTON will always continue to partner with the National Assembly and the Federal Ministry of Communications and Digital Economy in deepening mobile network and broadband penetration in Nigeria and stimulate the growth of the digital economy in Nigeria.”
