The impact of the proposed NITDA Bill 2021 on the ICT industry

The proposed NITDA Bill 2021 is causing a lot of buzz in the business because of its potential for overlapping and overwhelming effects on some functions, which industry analysts fear will cause severe frictions in the sector if not removed or simplified..

Deep-seated concerns about the proposed National Information and Technology Development Agency (NITDA) Bill 2021 are now engulfing Nigeria’s information and communications technology sector.
Stakeholders, operators, and entrepreneurs, among others, have raised concerns about several of the clauses in the proposed bill, which they describe as confusing, overlapping, and oppressive, and which could cause profound frictions within the ICT/telecoms ecosystem, since news of the bill leaked last year. They argued that the bill should be subjected to more scrutiny before becoming law.

According to industry analysts, the NITDA Bill 2021 gives NITDA authority over a number of other regulatory agencies, infringing on the statutory powers of government agencies such as the Nigerian Communications Commission (NCC), Computer Professionals (Registration Council of Nigeria) (CPN), Galaxy backbone, Office of the National Security Adviser (ONSA), and the National Universities Commission (NUC), among others.
NITDA has no powers under the present Act of 2007, which it aims to modify, and its tasks are primarily developmental, although it does have a number of functions, which have been raised from 14 to 24 in the proposed law.

Indeed, in March 2021, NITDA Director-General Inuwa Kashifu-Abdullai presented a proposal to the relevant National Assembly committees for the realignment of the NITDA Act 2007 with the principles of the Nigeria Digital Economy Policy Strategy and Fourth Industrial Revolution (4IR).
Kashifu-Abdullai had told the lawmakers that an urgent revision of the laws was required in order to stay up with the accelerated changes in the global IT-driven ecosystem and correctly position Nigeria as Africa’s leading digital economy and significant actor.

The proposed bill aims to create a regulatory framework for the development of Nigeria’s IT sector and digital economy. It is expected to repeal the NITDA Act 2007.

Early this year, Kashifu-Abdullahi stated that the Act should be realigned with “tenets and principles of the Fourth Industrial Revolution” as well as Nigeria’s Digital Economy Policy in order to keep up with the pace of innovation that has swept the country.

What is NITDA?

The Nigerian Information Technology Development Agency (NITDA) is in charge of developing a framework for the planning, research, development, standardisation, implementation, coordination, monitoring, evaluation, and regulation of information technology activities in the country. NITDA is a development agency, to put it simply.

The Ministry of Information and Digital Economy now oversees the agency. Its mandate includes legislation on data protection, domain name registration, and IT Clearance, among other things.

Controversy areas

If this proposed bill is any indication, NITDA is preparing for a more active, albeit coercive reign, in which it will take the authority and responsibilities of other regulatory agencies around the country.

The most problematic elements in the proposed bill are Sections 6, 13, 20, 21, and 22, which regulate NITDA’s power, classes of licenses and authorisations, as well as offences and fines, among other things.

NITDA would be given new powers under Section 6. A new subsection also gives the agency the authority to “enter premises, inspect, seize, seal, detain, and impose administrative sanctions on erring persons and companies who contravene any provision of the Act subject to the order of a court of competent jurisdiction on erring persons and companies who contravene any provision of the Act.”
“Fix licensing and authorisation charges, collect fees and penalties as may be necessary for the execution of its powers under this Act,” the NITDA will be able to do. This law would also establish a new licensing and penalty system.

Section 20 would provide the National Information Technology and Digital Economy Agency (NITDA) the authority to make regulations governing licenses and authorizations for operators in the information technology and digital economy sector, as determined by the agency.

Conflicts with the NCC’s regulatory authority

Despite the proposed NITDA Bill 2021’s identified arrogation of other agencies’ regulatory powers to itself, one of the primary agencies whose regulatory powers and responsibilities will be skewed by new provisions in the proposed Bill is the NCC. Sections 1, 2, 9, 10, 16, 26, 28, and 33, in particular, contradict with the regulator’s powers.

“The goal of this Act is to create an effective, impartial, and independent regulatory framework for the development of the Nigerian information technology sector and digital economy,” says Section 1 (Objectives of the Bill). This part, it may be surmised, provides the groundwork for NITDA’s transformation from an IT development agency to a regulatory body.
The introduction of the notion of “Digital Economy” as part of its regulatory purview, according to analysis, broadens the NCC’s regulatory horizons to include things that are not covered by the NCC’s only regulatory mandate. This would have an impact on the Commission’s responsibilities under Section 4 of the Nigerian Communications Act 2003, which gives the Commission the authority to regulate communications services that fuel the digital economy.

Section 2 (Bill Application) – This Act governs the provision, implementation, and use of information technology systems, processes, and digital services within Nigeria, as well as aboard a ship or aircraft registered in Nigeria. Such a clause is not included in the NITDA 2007 Act.
This is an effort to duplicate Section 2 of the Nigerian Communications Act 2003, which states: “This Act extends to the provision and use of all communications services and networks, in whole or in part, within Nigeria or on a ship or aircraft registered in Nigeria.”

The Draft Bill envisions communications services as digital services, which is in direct contrast with the intent and terms of the Nigerian Communications Act 2003, which mandates the Commission to regulate and oversee all communications services in Nigeria solely.
The agency’s functions are discussed in Section 9 (d, e, h, I, l, p, s, v, w). NITDA is mandated to: (a) create a framework for regulating the usage, development, standardization, research, and application of information technology, emerging technology, and digital services, activities, and systems in Nigeria. Such clauses are absent from the 2007 Act.
Checks revealed that this is a reflection of Section 4 (1) (h) of the Nigerian Communications Act 2003, which directs the NCC to develop and monitor performance standards and indices relating to the quality of telephone and other communications services and facilities provided to Nigerian consumers based on the best international performance indicators.

As a result, it is possible to conclude that this section will result in regulatory overlap for topics relating to the establishment of standards for communications services in Nigeria.
In accordance with the Agency’s aims and functions, Section 10 (c) stated that the NITDA shall have the authority to adopt regulations, standards, and recommendations governing the use of information technology and digital services in all sectors of the economy. This wasn’t part of the original agreement.

Analytically, this draft provision will enable the Nigerian Information Technology Development Agency (NITDA) to become a regulatory agency with enforcement authority over all aspects of the Nigerian economy relating to “digital services.” This would result in regulatory uncertainty and unnecessarily acrimonious confrontations across several industries, thereby jeopardizing market viability and investment.

From the perspective of legal experts

Nigerian legal experts have also pointed out flaws in the proposed NITDA (Repeal and Re-Enactment) Bill 2021, describing it as invading or attempting to duplicate regulatory functions held by several current government entities in the country.

During a webinar on ‘Stakeholders’ Engagement for Legal Practitioners in Nigeria on the National Information Technology Development Agency Bill,’ the legal experts voiced their opinions.
The Information and Communication Technology (ICT) Committee of the Nigerian Bar Association Section on Business Law (NBA-SBL), in collaboration with the NITDA and Farisad Investment Limited (FIL), hosted a webinar in which stakeholders from the legal ecosystem critically dissected the proposed bill’s new provisions.

The NBA President, Olumide Apata, fired the first salvo during the webinar, which was moderated by FIL Chief Executive Officer Sanusi Musa. Following his brief remark, Apata raised three fundamental concerns about the proposed Bill, which he said should be investigated by stakeholders at the webinar. Rotimi Ogunyemi of the NBA-ICT SBL’s Committee represented Apata.
Apata’s three concerns were: how the Bill will align with the Startup Bill currently before the National Assembly; how the NITDA Bill intends to navigate its way within the broadband context of other regulatory functions of other regulate agencies to avoid overlapping functions; and what the implications of the harsh penalties for violations of certain sections of the Bill will be on the ICT business environment.

NITDA is seeking for opportunities to collaborate

Kashifu-Abdullahi justified the Bill by stating that the scope of ICT has increased over time due to a lot of convergence and expansion in technology platforms used by businesses and governments for providing services. “Given that the NITDA Act is nearly 16 years old, we believe it is vital to keep the Act current with the present realities in the Nigerian digital economy,” he stated.

Director, Legal Service Department at NITDA, Emmanuel Edet, stated explicitly in his earlier statements providing information on the new provisions in the proposed NITDA Act 2021, “we know that some of the sectors we would like to be regulating come into the existing regulatory activities of some agencies.” According to him, this explains why NITDA places such a high priority on education.
In response to a query about over-regulating the ICT ecosystem, Edet stated, “It is better to over-regulate than to under-regulate,” adding that the NITDA’s mission is to become a “development/ regulatory agency.”

While the biggest obstacle raised by stakeholders thus far has been regulatory overlap, he said NITDA would look into it and take all of the stakeholders’ views, opinions, and suggestions into account as they work on the draft Bill further.

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