Data from the World Poverty Clock shows that the number of people living in extreme poverty in Nigeria as of October 11, 2019 is about 94.5 million. As scary as the number is, more worrisome is the fact that the report also puts the current escape rate at -4.4 people per minute. This means on average, about four Nigerians become poor every minute!

Though poverty can be self-inflicted by one’s actions or inactions, a large chunk of it is milled out of bad government policies. In essence, government policies and programmes, especially as they affect access to quality education, healthcare services, availability of critical infrastructures, among others are the major determinants of the number of people that would slide in and out of poverty at any point in time. Successive governments in Nigeria have rolled out programmes after programmes with promises of changing the economic fortune of the country while lifting millions of citizens out of poverty. 

As it has always turned out, the country and her citizens are often worse off at the end of the day. Most of the programmes are often borne out of what is in it for the powers that be at the time of their initiation. Hence, they are not institutionalized, usually wrapped in corruption, and therefore lack continuity after plunging billions of naira into them.

Well, the crux of this piece is to examine the impact of the recent introduction and enforcement of fifty naira stamp duty for Point Of Sales (POS) transactions on the already impoverished masses and Micro, Small and Medium Enterprises (MSMEs). How would this affect both the cashless policy and financial inclusion drive?

I recall clearly that one of the cardinal objectives of the financial inclusion strategy, which is aimed at bringing as many people into the financial system as a way of taking them out of poverty, is to make financial services accessible to the excluded populace at a minimal cost. From my interactions with some merchants, as expected, they are looking for ways to pass the cost to their customers without having to lose market share. What did I hear you say?

Let’s have a look at what would play out between retail merchants, small scale (financial) service providers and their customers. For instance, a retail trader who bought an article for N900 and decides to sell at N1,000 and also wants to be compliant with cashless policy would have to contend with: merchant service charge (0.5% of the transaction amount, N5 in this case), N50 stamp duty, taxes from local government, shop rent, transportation cost and electricity bill. 

All these are supposed to come from the gross profit of N100 per article! Mind you, we are talking about a retail trader in a rural environment. Meanwhile, the trader has option of dealing in cash and ‘saving’ the N55 charge associated with the attempt to go cashless. Should the trader toe the path of cash based transactions to avoid stamp duty payment, it would be an obvious blow to the cashless drive. What if the merchant wants to pass the POS associated cost to the consumer? Assuming the buyer has no option, his purchasing power would be affected and consequently his living standard. But if the buyer has cash purchase alternative, he will certainly choose that. Still a knock to the cashless society pursuit. A friend said he would slow down on POS usage as much as the stamp duty charge persists.

In my opinion, this recently introduced N50 stamp duty charge for every POS transaction value for N1,000 and above, is at variance with both the cashless society and financial inclusion drive. To achieve the cashless society or financial inclusion objectives, the use of POS and other electronic means for financial transactions are supposed to be incentivized instead of being ‘punished’. If the N50 stamp duty as a means of revenue generation must be implemented on POS and other electronic transactions, the applicable threshold should be reviewed upward, say N10,000 and above.

Also, while it is important that government expands its revenue net, it is even more crucial that leakages in the existing revenue collection structures and in the application of the revenues generated are sufficiently plugged. If corruption right from revenue collections to civil service payroll fraud and inflated contracts are not tackled, no amount of tax increment would be enough to settle Nigeria’s debt obligations let alone build the much needed infrastructure. 

Thankfully, as one of my bosses, Chima Azubuike (a passionate man about data and technology driven governance) would say, “Internet of Things (IoT), Big Data Analytics, Machine Learning, Cloud Computing, Artificial Intelligence (AI), Blockchain Technology and Robotics are near convergence. This will deliver superior services to global population and streamline processes… Get ready!” and “What’s your experience with doing business with entities with zero integrity? 

Yes, I mean trustless people and companies? The wheel of the law is so slow and most times frosted in aberrations beyond sensibilities. Not to worry, we are approaching the dawn of SMART CONTRACTS. Self-executing agreements leveraging Blockchain Technology, where information and data decentralization will unmask dangerous patterns and profiles, so as to nip criminality in the bud”. However, my question is, will the current crops of politicians ever think of deploying such technology in governance?

Recently, I had the privilege to join other industry experts invited by the Standard Organization of Nigeria to develop the draft policy for the use of recycled plastic PET Bottles for food contact application in Nigeria. The standard when signed into law will tackle plastic pollution in Nigeria arising majorly from the effect of single use plastic bottles. This is a laudable initiative and a drive towards a sustainable environment. Sustainability focuses on meeting the needs of the present without compromising the ability of future generations to meet their needs.

In the last decade, production and demand for the use of plastic packaging has been on the increase due to benefits of affordability and ease of use it offered compared to other forms of packaging. However, the increase has also led to continuous degradation and pollution of the environment which if not controlled will greatly affect everyone. Around the world and in some certain Africa countries like Rwanda and Tanzania, there are ongoing initiatives and reforms to combat the effect of plastics on the environment and its associated health risks. It is good to see that Nigeria has joined the global communities in addressing the plastic crisis.

Each year, at least 8 million tonnes of plastics leak into the ocean which is equivalent to dumping the contents of one garbage truck into the ocean every minute. The best research currently available estimates that there are over 150 million tonnes of plastics in the ocean today. In a business-as-usual scenario, the ocean is expected to contain 1 tonne of plastic for every 3 tonnes of fish by 2025, and by 2050, there will be more plastics than fish (by weight).

Nigeria being one of the biggest countries in West Africa generates an average of 32 million tons of solid waste annually and plastic packaging contributes about 2.5 million tons. This is a challenge especially in the urban settlement where the plastics are ends up in drainages and gutters thereby causing serious environment concerns. With the new standard, It means that the plastic bottles currently littered in the environment can be picked, cleaned, recycled and re-introduce into the production process for other application as already been practiced in developed countries.

This will lead to job opportunities which can be harnessed to reduce unemployment and poverty in the country. There are already existing recycling companies in Nigeria but they are not enough to tackle the environmental concerns arising from plastic pollution. More so, there will still be need for more middle men, collection hubs, and storage facilities along the supply chain to ensure that the plastic bottles get to the recycled plants at the right quality. The draft policy is the first step in achieving the ultimate goal and drive towards a circular economy and tackling environmental concerns from plastic wastes. It is important for everyone to start seeing this plastic bottles as a source of revenue and a means of turning waste to wealth. There are presently some neighborhoods where people are more conscious of the value of the plastic bottles.

For Instance, in Lagos, there is an initiative called the Recycle Pay Project where parents who are unable to afford school fees for their children can pay using collected plastic bottles in Ajegunle. The implementation of the standard will require support from all major stakeholders as collective efforts will be required to derive the gains from the policy. Proper and adequate collection sites have to setup to enable consumers drop off their plastic waste without any hindrance. Sensitization of the public will also be needed to ensure that everyone is aware of what needs to be done because we all get affected either directly or indirectly by the effect of plastic waste. The opportunities are huge and is still a relatively blue ocean. It is only the first that tap into the opportunities that will benefit fully before new entrants and competition begins to control the market dynamics.

Since 2011 when the Central Bank of Nigeria (CBN) introduced cashless policy, aimed at reducing the cash-based culture that Nigeria has been functioning on, there has been one development or the other contradicting it.

The most recent has been the introduction of charges on Unstructured Supplementary Service Data (USSD) transactions. Some Telecommunication companies on Saturday 19th of September sent messages to their subscribers as notice of charges on USSD.

“Yhello, please note that from Oct 21, we will charge N4 per 20 seconds for USSD access to banking services. Thank you.” The message from MTN reads.

This means if you spend 5 minutes checking your account balance, you will be charged N60. It was a rule approved by the Nigerian Communication Commission (NCC), without prior notice, and it is one among many.

Although the Ministry of Communication reacted quickly, a statement signed by Mrs. Uwa Suleiman, the spokesperson to the Honorable Minister of Communication, directed the NCC to discontinue the plan with immediate effect. It reads:

“The attention of the Federal Ministry of Communications has been drawn to the viral text message allegedly sent by the Mobile Network Operator MTN Nigeria and other Mobile Operators notifying subscribers of a four naira (N4:00) charge per 20 seconds on USSD access to banking services from the 21st of October 2019.

“The office of the Honorable Minister of Communication Dr. Isa Ali Ibrahim Pantami FNCS, FBCS, FIIM is unaware of this development and has hereby directed the sector regulator, the Nigerian Communication Commission (NCC) ensures the operator suspends such plans until the Honorable Minister is fully and properly briefed.”

It is becoming a norm. The viral outrage that instigated the intervention of the Communication Ministry has been that these agencies in collaboration with corporations, in the exercise of their independence are obnoxiously imposing one extortive rule or the other.

And in the case of Telcos, it is happening when subscribers are facing a lot of hiccups in voice and data networks. A UK based price comparison network, cable, counted Nigeria, out of top 10 African countries. with data price concern. A situation the Minister of Communication found worrisome.

What is more is that over 174 million subscribers who are paying the high price are not getting the service they deserve. There are complaints of illegal deduction of data amidst the high cost.

It is against these backdrops that the NCC approved charges on USSD that was designed to encourage cashless policy and ease banking services. Although Hon. Pantimi, has ordered downward review of data prices, and improved quality of service, there is little hope it is going to solve the problem.

The bone of contention has been who is going to pay for the USSD services. The agreement that birthed the service seems not to favor telecom operators anymore, so they want to make subscribers the scapegoats with the support of NCC. That means as usual, the banks will have nothing to lose.

So the despair emanates from the perception that the supposed umpire (NCC), is part and parcel of every undoing of the telcos. And it wouldn’t take long before another exploitative rule is introduced. Many believed that the solution lies with the regulator, not service providers who only need to obey the right rules if they are made.

So to solve the problems of the telecommunication industry in Nigeria, the Nigerian Communication Commission needs to do better.