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How FG, States & Local Councils Turn Telcos to ‘Cash Cows’

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Declining income from the Federation Account due to the fall in oil prices; federal structure and the Constitution authorisation of certain items to be legislated across the three tiers of government, are among the causative factors why the telecoms in the country is over-regulated and multi-taxed.
 
This formed part of key message by Airtel Nigeria at the recent third quarterly seminar organised by IT reporters in Lagos, Shola Adeyemi, director, Legal & Regulatory Affairs/ Company Secretary, of the Company, noted that “drive to increase internally generated revenue particularly at the State and Local Government levels; and the notion that telecoms is a “cash cow” and should be the main target in raising revenue for state”, should be discouraged.
 
Adeyemi identified that mis-appreciation of the role of infrastructure in overall socio-economic development by taxation of infrastructure will constrain infrastructure deployment, whereas subsidizing deployment of same will facilitate broader tax revenues from the ensuing value chain of economic activity.
 
Although, the industry accounted for N640bn in license and spectrum fees & N220bn annually in taxes and regulatory fees; attracted significant Foreign Direct Investment; created over 3m jobs and contributed about N1.58trillion, accounting for 9.8% in GDP growth in second quarter 2016, based on National Bureau of Statistics report, the telecoms sector is heavily taxed.
 
How States Usurp Telcos On Right of Way
In the presentation, Airtel decried how Kogi, Kano, Delta, Rivers Abia, Oyo, amongst others charged huge fees on right of way, especially on Federal roads that pass through their States.
 
Although he didn’t state the year or period the fees were charged, but Adeyemi cited examples: “Kogi State Board of Internal Revenue demanded the total sum of N2, 295, 000, 000 as ground rent fees for fibre optic cables laid on Federal roads inspite of the fact that Airtel obtained Right of Way permit from the Federal Ministry of Works; Kano State Urban Planning & Development Authority (KNUPDA) demanded the sum of N196,250,000 as Right of Way fees for fibre optic cables laid along federal Highway. KNUPDA also demanded for the sum of N324, 250,000 as annual planning permit renewal fees inspite of the fact that planning permit is a one-off fee”.
 
“Delta State Ministry of Environment demanded for the sum of N733,000,000 as Ecology fees for the period 2007 -2015; Rivers State Internal Revenue Services demanded for  the sum of N1,600,000 as Premises fitness fees;
 
“Abia State Ministry of Industry, Science & Technology demanded for the sum of N96,000, 000 as Business Premises permit. Base Stations are classified as Business Premises;
 
“(Oyo) State Board of Internal Revenue demanded for the sum of N3,000,000 as Business Premises fees.
 
“National Inland Waterways Authority (NIWA) demanded for a total sum of N1,056,435,750.00 as right of way fees for fibre optic cables laid within the Federal Government’s Right of Way in Northern States inspite of the fact that similar fees had already been paid to Federal Ministry of Works.
 
Meanwhile, in May 2015, the office of Dr. (Mrs) Ngozi Okonjo-Iwuala, the erstwhile minister of Finance amended the Taxes and Levies (approved list for collection) Act Cap.T2, Laws of the Federation of Nigeria, 2004 (the Act).
 
By the foregoing, taxes for the Federal, State and Local Governments increased from 8 to 9, 11 to 25 and 20 to 21 items respectively; leading to new taxes such as Land use charge, Entertainment Tax, Environment (Ecology) fee, Infrastructure Maintenance Charge, Fire Service Charge, Property tax, Economic Development levy, Social Service Control levy. Caps placed on taxes such as business premises permit (N10,000) removed.
 
“The Amendment Order 2015,”Adeyemi said in his presentation, “legitimized multiple taxes & levies bedeviling telecoms industry and gave States unfettered powers to charge arbitrary fees”.
 
He also lamented that multiple taxation adversely impacts network costs, investment planning and business plan credibility; “Increased OPEX and lost revenue costs around N9bn each year depending on location and length of the shutdown. Adversely impacts other critical sectors (such as health, security, banking services, etc.) with attendant inevitable effect on the economy and affects emergency response and other related services which rely on communications services”.
 
Effects of Multiple Taxation
“Possible diversion of Foreign Direct Investments to other jurisdictions considered more investor-friendly; industry may not be able to adequately support Law Enforcement Agencies to investigate crimes at affected locations; probable barrier to broadband roll out with attendant adverse impact on internet penetration and services; unconventional tactics employed by the MDAs for the collection of the levies result in damage and injury to operators’ staff and property; and affects accurate business planning and forecasting which is critical for corporate growth”.
 
Adeyemi further called for political will, persuasive campaigns, cross‐sector and cross‐ministry coordination and executive power to implement and enforce the end of the multiple taxation regime.
 
“Airtel also aligns with industry stakeholders in canvassing for an implementation of a national strategy that will increase awareness of these issues and educate all about the impact of such acts, including the legal consequences; undertake critical review of current Taxes and Levies (Approved List for Collection); and expedited development and approval of a legal instrument to accord telecommunications networks the status and legal protection of Critical National Infrastructure”.
 
He said, “At 150m subscriber threshold and 107% penetration (June 16), telecoms plays a key role as an economic enabler and social overhead capital (SOC) with a 7% contribution to GDP.
 
“Stronger collaboration of relevant stakeholders required to address incidence of multiple taxation in order to ensure that the Quality of Service is improved upon for the ultimate benefit of the country”.
 
 
 


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NCC Calls on Judiciary to Champion Nigeria’s Digital Transformation

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Nigerian Communications Commission (NCC) has emphasized the judiciary’s crucial role in Nigeria’s digital transformation. During the Annual Workshop for Judges on Legal Issues in Telecommunications, Executive Vice Chairman Aminu Maida highlighted the judiciary’s reliance on digital tools to enhance justice delivery.

He stressed the need for special protections for telecommunication infrastructure, which faces disruptions from vandalism, theft, and restricted access.

Maida called for judicial support to implement the Presidential Order designating telecommunications infrastructure as Critical National Information Infrastructure.

This order prohibits unauthorized actions against such infrastructure without a lawful court order.

The judiciary’s role in protecting fundamental rights, enforcing digital contracts, and developing digital jurisprudence is vital for Nigeria’s digital transformation.

Chief Justice of Nigeria, Justice Kudirat Kekere-Ekun, commended the NCC’s efforts to protect consumers from unfair practices and emphasized the judiciary’s commitment to the telecommunications sector.

She highlighted concerns such as cybersecurity risks, consumer data protection, and the need for improved dispute resolution frameworks within the digital economy.

The workshop aims to equip judicial officers with the technical expertise required to address emerging legal challenges in telecommunications.

Nigeria’s digital economy has significant growth potential, with projected revenues of $18.30 billion by 2026, expected to create employment opportunities, reduce poverty, and promote innovation.

The NCC is working with key stakeholders to ensure the seamless implementation of the Presidential Order and to keep Nigeria competitive in the global digital economy.


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Empowering Nigerian Entrepreneurs: 15Wins Ventures Unveils Z-Habitat Hub

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15Wins Ventures, a Dutch-based venture builder, officially launched Z-Habitat Hub in Lagos on Thursday, October 24, 2024, marking a new chapter in the company’s efforts to support innovation and entrepreneurship in Nigeria.

L-R : Nelson Tosin Ajulo, Chief Executive Officer, 15Wins Ventures; Michel Deelen, The Netherlands Consul General in Lagos; Valkamiya Ahmadu, Senior Policy Advisor on Economic & Political Affairs Netherlands Embassy, Abuja; Sonia Onovughakpo Fajusigbe, Policy Advisor on Entrepreneurship, Youth Employment & Health Care, Consulate General of the Netherlands in Lagos; Bengt van Loosdrecht, Ambassador of Netherlands to Nigeria, during the grand unveiling of the Z-Habitat Hub, Nigeria’s most advanced incubation hub at Ago Palace, Lagos on October 24, 2024.

The launch was attended by key dignitaries, including The Netherlands Ambassador to Nigeria, His Excellency Bengt van Loosdrecht; The Netherlands Consul General in Lagos, His Excellency Michel Deelen; Sonia Onovughakpo Fajusigbe, Policy Advisor on Entrepreneurship, Youth Employment & Health Care, Consulate General of the Netherlands in Lagos; Valkamiya Ahmadu, Senior Policy Advisor on Economic & Political Affairs (Abuja); and Adebola Adebowale, Chief Program Analyst for Lagos State.

Commenting on the significance of Z-Habitat in driving innovation and creating equitable opportunities for underserved communities, His Excellency Bengt van Loosdrecht said, “We see Z-Habitat Hub as a powerful connection point – a place where ideas can take root and thrive through collaboration.

“Many people in the west do not realize that Nigeria is a country on the brink of transformation.

“The domestic private sector, driven by young, well-educated individuals, is flourishing. This is a dynamic I have seen in other rapidly developing regions, and I believe Nigeria’s youth are on the cusp of an exciting future.’’

His remarks preceded the ribbon-cutting ceremony, which officially opened the hub’s doors to the Nigerian innovation ecosystem.

The Z-Habitat Hub will host various programs, including workshops, mentorship sessions, and networking events, all aimed at empowering Lagos’s startup ecosystem.

The hub’s mission aligns with 15Wins Ventures’ goal to build a sustainable foundation for African tech development, bridging resources from its base in the Netherlands to local talent in West Africa.

Reflecting on the vision behind Z-Habitat, Nelson T. Ajulo, Chief Executive Officer of 15Wins Ventures, highlighted the hub’s role as a transformative force within Lagos startup ecosystem.

“Z-Habitat is a place where technology, creativity, and entrepreneurial spirit come together.

“Our mission is to provide local entrepreneurs and creatives with the resources, mentorship, and networks they need to turn their ideas into impactful solutions,” he said.

“Through Zarttalent, we have trained nearly 500 students and provided scholarships to underserved women. Now, with Z-Habitat, we are expanding our commitment to empowering Nigeria’s youth and broader community.’’

Guests were welcomed with a guided tour of the facility, led by Nelson, offering a firsthand look at the state-of-the-art workspaces.

The event also featured an energetic performance by local drummers and a showcase of creative expressions by local artists.

The launch of Z-Habitat underscores 15Wins Ventures’ commitment to fostering homegrown innovation and providing a structured, supportive environment for Nigerian entrepreneurs.

As Lagos startup landscape continues to thrive, Z-Habitat is poised to play a critical role in helping entrepreneurs turn their ideas into impactful solutions that drive long-term growth.


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Treepz Drives Innovation, Wins Top Honors at African Union Event

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Treepz, Africa’s leading corporate mobility startup, has been awarded the Best Startup Pitch in Africa at the 15th Annual African Union Private Sector High-Level Conference, held in Lusaka, Zambia on October 31st – November 2nd, 2024.

Amidst the line-up of startups that pitched at the conference, this award, organized by the Global Innovative Initiative Group (GIIG), was presented to Treepz in recognition of its innovative contributions and significant impact on transforming the mobility landscape across Nigeria, Ghana, Uganda, and Kenya.

In addition to winning the Best Startup Pitch in Africa award, Treepz was recognized across the continent and was awarded $5000 and $3,500 from the African Export-Import Bank (Afreximbank) and Google, respectively.

Commenting on the award, Onyeka Akumah, Founder and CEO of Treepz, stated, “We are honoured to have received several recognitions on the continent, including the Best Startup Pitch in Africa, for our work in the mobility sector across four countries”.

“We are also grateful to Jo Griffiths, Founder of GIIG for the extended invitation to pitch at the prestigious African Union private sector conference.

“The invitation speaks to our footprints in Africa and how we have consistently delivered exceptional mobility services to our customers, both home and beyond”, Onyeka added.

Global Innovation Initiative Group (GIIGvelopment and People at Treepz delivered the pitch and received the award on behalf of the startup.

She expressed her excitement, noting that Treepz is well-positioned to significantly empower millions of daily commuters through the advancement of shared mobility across Afric) is a venture capital investment firm committed to enabling African tech entrepreneurs to thrive in businesses that pioneer innovative global solutions that meet the most pressing challenges of the time.


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