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Nigeria gets smarter as states sign up to reduce cost of running telecoms services

As 2014 winds down, the Nigerian government has revealed that five of the country’s states are working to reduce taxes on, and eliminate multiple taxation of, Information and Communications Technology (ICT).


Earlier this week, the Nigerian Federal Minister of Communications Technology, Honorable Dr. Omobola Johnson, declared five Nigerian states — Abuja, Bayelsa, Cross River, Lagos and Ondo — to be “Smart States”. These Smart States have formally signed a memorandum of understanding with Minister Johnson to join the country’s Smart State Initiative, which aims to promote the growth and faster deployment of ICT infrastructure across Nigeria. To become a Smart State requires significant reduction of Right of Way (RoW) fees; a standardisation of state levies and taxes on ICT infrastructure; and a consolidation of licensing through the “Dig Once/Pay Once” philosophy.


To date, Minister Johnson revealed, Lagos has reduced its RoW fees by 85%, and Bayelsa state has slashed its rate to 50%. Each of the five states have reduced levies and taxes on ICT infrastructure by as much as 50%, and the Smart States will create a single agency to collect fees on behalf of their governments. This reduction in taxes and fees will help lower costs of infrastructure setup for connectivity companies, driving down the cost of accessing the Internet and enabling more Nigerians to come online. Four more states — Anambra, Gombe, Osun and Delta — have also agreed to join the initiative and to become Smart States.


Reacting to this positive development, Sonia Jorge, Executive Director of A4AI expressed her joy and congratulated the Smart States. On behalf of her global team and the Nigerian A4AI Coalition, Sonia said:


A4AI is pleased with these developments and supports this decision towards reducing the negative impact of multi-taxation in the sector, which was identified by the A4AI-Nigeria Coalition as critical to the sector’s development. We applaud the Minister’s leadership on this issue and are happy to be working with the Hon. Minister Johnson to further affordable access focused policies in Nigeria.”


Nnenna Nwakanma, the Web World Wide Web Foundation’s Africa Regional Coordinator has also extended hearty congratulations to the people and the governments of the Smart States, and at the same time, has extended a call to other states to join the initiative:


“The leadership of Nigerian states in extending affordable Internet access to the population is not just critical for Nigerians, but also serves as a needed example of good practice in ICT policy for the continent. Nigeria holds a very important position in the digital journey of the African continent and each policy step forward paves the way for other countries to advance in the same direction.”


In Nigeria, A4AI has been working with key stakeholders to tackle three major issues that have been identified as priorities for affordable access in the country: (1) consumer awareness and pricing transparency; (2) an open access framework and infrastructure sharing; and (3) a forward looking spectrum policy. The Alliance is also supporting the country in its work to increase data gathering, contributing its expertise in data collection and the definition of indicators to monitor progress. High levels of multi-taxation in Nigeria have been a concern for all stakeholders, and the recent developments are an important step towards a more simple and predictable tax policy across states and the federal system.


The A4AI-Nigeria Coalition has enjoyed rapid growth and will continue its engagement towards more affordable Internet access in the country. The next A4AI-Nigeria Coalition meeting is scheduled for February 24-25, 2015. Visit the Nigerian Coalition page on the A4AI site to learn more about this upcoming meeting, our ongoing work in Nigeria, and how you can join us in our work to make broadband access more affordable in Nigeria and in our other member countries.