Femi is one of the many entrepreneurs that was affected by the order from the Nigerian Communications Commission issued in December 2020.
The order asked telecoms operators in the country to stop selling or registering SIM cards. This was after an initial directive to the operators to suspend the mobile numbers of Nigerians who had not registered for the National Identification Number (NIN).
The ban was supposed to last until the registration deadline which was initially set to 30th December 2020, 2 weeks from the announcement.
However, it was extended at least three times before the government finally lifted the ban. The first extension was by three weeks to 19th January 2021, then by eight weeks to April 6th, 2021 and recently by four weeks to May 6th, 2021. These extensions resulted in huge losses for telcos and young entrepreneurs.
Telcos suffered the highest losses. They lost 11.8 million subscribers between November 2020 and February 2021. This brought the total number of mobile subscribers in Nigeria to 195.7 million, dropping below 200 million for the first time since it reached this number in August 2020.
By multiplying this number with the average revenue per user (ARPU) for the telecoms industry in 2020 (₦1,420/$3.66), this means that operators lost ₦16.8bn ($41m) in revenue. As the telecoms industry contributed an average of 10.3% per quarter to Nigeria’s GDP in 2019 (totalling $46bn), operators have lost 0.09% of this.
Consumers and young entrepreneurs have also borne the brunt of the ban. Over seven million Nigerians who make a living as SIM registration agents were out of work while the ban lasted. Business owners like Femi have also been unable to buy SIM cards for their operations making communication, an important pillar of running a business, difficult.
Although the government’s reasons for the ban were clear, it was difficult to justify them given the economic costs.
The telco industry is one of the major drivers of the Nigerian economy. It contributed 12.45% to the economy in the fourth quarter of 2020, lifting it out of recession. So the ban did not make sense especially in the light of Nigeria’s rising unemployment numbers.
While the government scores points for re-tracing its steps, the hope is that policymakers have taken the lessons from the consequences of the ban. Policy cannot exist in isolation, without assessing the potential consequences.
Get TechCabal reports
and send us your custom research requests