Huge uncertainty trails Federal Government’s target of a five-fold increase in broadband penetration by 2018, in consonance with the National Broadband Plan (NBP), due to growing complexity in obtaining state governments’ buy-in in the implementation of the policy, industry insiders have said.
Nigeria, Africa’s largest economy by GDP, has a broadband penetration of 6.8 percent. Fifteen months after the approval of the national broadband policy by President Goodluck Jonathan, only six states out of the 36 states of the federation have agreed to work with the Ministry of Communications Technology to create the much needed enabling environment for speedy deployment of broadband infrastructure.
“The large size of the country and getting state governments from different parapolitical parties to implement the national policy on broadband are some of the challenges facing the implementing stakeholders as far as the NBP is concerned”, Femi Abikoye, ICT policy officer for Paradigm Initiative Nigeria (PIN), a social enterprise that connects underserved youth with Information Communications Technology (ICT) opportunities in order to improve their livelihoods.
Industry insiders are, however, of the view that the Broadband Council is faced with a daunting task of convincing many state governments in the country to come on board the implementation process as a result of political affiliations and party sentiments.
“Multiple taxes levied on operators by state governments represent another huge challenge facing the telecommunications industry”, said Segun Ogunsanya, chief executive officer, Airtel Nigeria. These taxes, fees and charges are those payable to the MDAs (ministries, department and agencies) of the federal, states and local government agencies. There are also myriad charges imposed by non-governmental bodies such as community development areas, resident associations and ‘area boys’.
All of these taxes and charges are often generally aggressively pursued, and according to an industry watcher, through the illegitimate use of law enforcement agencies, shutting down and occasionally vandalising sensitive telecommunications equipment.
Investigations by BusinessDay show a raft of multiple taxes being imposed on the operators by the federal, various state governments and their agencies across the federation.
Operators are often times forced to pay such taxes as permitting tax, annual renewal taxes, miscellaneous fees, development levies, tenement rates and even sanitation fees, in one base station, sometimes running well above N200 million, depending on the state. Few months ago, the Osun State government vowed to confiscate the base stations of South Africa’s MTN over its failure to pay the Right of Way (RoW) permit fees due to the state to the tune of N399.4 million.
On April 7, the base stations had been seized by the officials of the state Internal Revenue Service (IRS), but were later released two days after following the intervention of a senior executive of the telecoms company.
Market observers, however, told BusinessDay that overlapping and often conflicting jurisdictions between the different agencies of government often lead to these multiple layers of taxes, charges and fees.
“Telecoms subscribers will continue to experience poor quality of service because many of the networks cannot complete network expansion initiatives due to the issue of multiple taxes. Telecoms operators spend significant amount of resources meeting the financial obligations of these states.”
