Twitter is offline to Nigerian residents following an order by the Minister of Communication, Lai Muhammed, and a follow-up legal notice by the Attorney General and Minister of Justice, Abubakar Malami, to the effect that sending Tweets in Nigeria is now a criminal offence.
Let us talk about the economics of it all. Will a ban on Twitter and other social media applications have an economic effect on Nigeria? Will it affect commerce? How?
READ: Twitter is not the only platform the FG plans to regulate
First, the numbers.
Social Media and the Internet in Africa
How big is the Social media space in Africa?
According to the e-Conomy Africa 2020 report prepared by the IFC (the Finance arm of the World Bank) and Google, the Africa internet economy has the potential to reach $180 billion by 2025, accounting for 5.2% of the GDP of Africa in just 4 years. A key data point in the report states that a “10% increase in digital connectivity leads to 2.5% increase in GDP per capita.”
The report says this growth will be driven by faster and better internet connectivity, a rapidly expanding urban population, a growing talent pool, a vibrant startup ecosystem, and the African Free Trade agreement which creates “regional harmonization.” In summary, a growing urban population, harnessing better internet to trade across borders will utilize the internet and grow GDP.
READ: Twitter Ban: Report says Nigeria and China working on internet firewall
According to StatCounter ranking of social media apps in Africa, there are big three apps on the continent based on market share as of May 2021- Facebook with 58%, YouTube with 24%, and Twitter with 11%.
Social Media and the Internet in Nigeria
I have called Nigeria an internet giant because as of 2019, there were 125 million internet users in Nigeria and this translates to a 60% penetration rate when compared to the African continent which is at 36% internet penetration.
When looking at Statcounter ranking data for Nigeria, the most popular apps used are Facebook at 56% and Twitter at 25% of the market share. Also, Nigeria, according to the Economist Intelligence Unit report (“the Inclusive Internet index”), scores highest in “affordability.”
READ: The risks associated with using VPN
Again, we see Nigeria locking in the key growth enablers (namely population, cheap internet, and growing talent) to build the largest internet economy in Africa. Nigeria with its Yaba “silicon valley” cluster has created an ecosystem of internet-facing services in FINTECH, healthcare, entertainment, etc. Just think of Flutterwave, Iroko TV, Interswitch, and Jobberman, all Nigerian, all locally made, all world-class. The successful local firms have been able to leverage IT and Social media to solve local problems in Nigeria, e.g. high advertising costs.
In September 2020, Accenture, the consulting firm, published a report titled, African iGDP Forecast which defines “iGDP” as the internet’s contribution to the GDP. The report also published a table of current and projected iGDP across major African economies, Nigeria is projected as Africa’s largest internet-based economy come 2025, just 4 years away, see table 1.
READ: How to stop apps on your phone from spying on you
Table 1: iGDP Potential
Source: Accenture: Africa’s iGDP Forecast
Nigeria is powering this growth by a seemingly endless supply of manpower. The IFC/Google report also says there is a historical peak of 690,000 professional developers across Africa in Egypt, Kenya, Morroco, Nigeria, and South Africa. Of this number, 12% or 85,000 developers are in Nigeria second only to South Africa with 17% of the population.
The internet and social media have revolutionalized business in Nigeria. I am old enough to recall driving to the airport in person or to a “travel agency” to buy a ticket to fly on a plane. Today I go online, buy a ticket, select a seat, book a hotel and hire a car while in bed via apps on my phone. If I don’t like the service I can go online to Facebook and Twitter and complain. Almost every organization has a social media team and social media spending is not a traditional media channel used by companies and politicians. Can you imagine the covid response, the dissemination of information without Social media? Without Twitter?
The Twitter Ban
This brings me to the ban on Twitter in Nigeria. Again this looks to me like killing an elephant with regulation. Let us go back to the MTN saga. MTN committed an offence, was the Nigerian regulatory response appropriate to the offense? Even if Nigeria was on the right side of the law, could Nigeria have given more pause to the messaging?
On my Twitter handle, I have read numerous tweets from individuals with side gigs in design and other IT tech skills complain about how the ban has dropped the volume of business they do. Similarly, for large corporates like banks, this Twitter ban will affect their ability to serve their clients who have adopted Direct Messaging. Kuda Bank, the 100% online bank, for instance, posted a message that “Twitter Support is paused until temporary ban on Twitter in Nigeria is lifted.”
However, what is also clear is that Nigerians seem to have found ingenious ways to bypass the Twitter block and still go online. What this will mean is that advertisers who want to reach Nigerians online can easily search Twitter location for Nigerian trending topics and target that cluster. In essence, Nigerians are still on Twitter, but Nigeria will lose that ad revenue.
Like I have stated with the CBN “ban” on Cryptocurrencies, Gokada, and ORide issues, Nigeria is communicating a narrative that business practice is “fluid.” This is dangerous for FDI flow to Nigeria. Twitter is 25% of Nigeria’s social media space, and it was switched off in 24 hours. This narrative will simply benefit Kenya and South Africa as they will attract more International Venture Capital as long as the ban is up, lets not even talk about how this plays on the international debt market. Senegal just raised $946 million via the Eurobonds market at 5.375%. What yield will Nigeria pay?
Look at it this way, if Shell has made a rude remark about the president of Nigeria, would Nigeria have asked Shell to leave Nigeria?
The Federal Government of Nigeria has stressed the need to diversify, it has also sought a way to reduce youth unemployment, the IT sector has provided jobs, should that consideration not be balanced with the blanket ban? Nigeria’s youth once again find themselves as the proverbial grass in a fight amongst elephants. The Nigerian youth have self-taught themselves Java, PHP, and Javascript, etc. Data from Google/IMF shows 32% of Nigerian IT professionals are self-taught, higher than university education (23%) and on the job (19%). Those self-taught youth also use Twitter, that’s how they have stayed employed in a nation with no jobs.
Has Nigeria killed their hopes? Again?
Twitter Ban is just one of the numerous ways Govt has been using to destroy businesses in the Country.We cry that there are no Jobs but we do the very thing that kill jobs.Where is Michelin tires, Dunlop,saferty Glass and others?What effort has been made to rid our federal roads of touts that been harassing haulage trucks conveying products within the country.I We do have a lot of issues to solve.We have to wake up as a country.