Twitterban: Job Losses Loom, Economic Woes Worsen – Experts Warn
With present economic woes, we shouldn’t add to our people’s problems – NESG
The Nigerian Economic Summit Group and economic experts on Sunday described the Federal Government’s ban on a social media network, Twitter, as ill-advised.
The NESG, in an interview with The PUNCH, said people, particularly the small and medium entrepreneurs, would suffer, adding the ban would compound Nigerians’ economic woes.
Others who spoke to The PUNCH included a former President of the Association of National Accountants of Nigeria, Dr Sam Nzekwe; a Professor of Economics and Public Policy, Prof Akpan Ekpo; the Association of Small Business Owners of Nigeria and the Lead Director, the Centre for Social Justice, Eze Onyekpere.
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They lamented the impact of the suspension of Twitter operations in Nigeria on businesses, warning that the development was capable of triggering more job losses in the country
Recall that the relationship between the Federal Government and Twitter went sour on Wednesday when the network deleted a post on the Nigerian Civil War by the President, Major General Muhammadu Buhari (retd.).
The President, had on Tuesday in the post hinted that he would treat IPOB and other secessionist groups, “in the language they understand,” a tweet, which was deleted by Twitter on the grounds that it violated its rules.
On Wednesday, the Federal Government reacted angrily, saying Twitter’s mission in Nigeria was suspicious.
On Friday, the Federal Government suspended, indefinitely, the operations of Twitter in Nigeria. It said Twitter’s operations violated Nigeria’s cooperate existence.
The Minister of Information and Culture, Lai Mohammed, who on Friday announced the suspension, cited what he described as “the persistent use of the platform for activities that are capable of undermining Nigeria’s corporate existence.”
The ban, which sparked public outrage, has been condemned by the United States, the United Kingdom, and the European Union, among others.
“The government’s recent #Twitterban undermines Nigerians’ ability to exercise to exercise this fundamental freedom and sends a poor message to its citizens, investors and businesses,” the US Mission in Nigeria said in a statement on Saturday.
The NESG, a private sector-led think-tank, and economic experts, who spoke to our correspondents in separate interviews, said the ban on Twitter would dampen foreign investors’ appetite to invest in the country and take a toll on the government’s digital economy drive.
The President, Association of Small Business Owners of Nigeria, Mr Femi Egbesola, lamented the adverse effect the ban would have on small and medium-scale enterprises.
According to him, the social media, of which Twitter is a leading platform, provides a cheaper option of advertising.
Egbesola said, “SMEs would no longer be able to advertise their products and services on Twitter. This ban would disrupt the tens of thousands of small businesses that create more than 70 per cent of the nation’s employment.
“Twitter might have been at fault for censoring the President’s tweet, but the government should consider the positive side. The ban would affect employers and may lead to the loss of jobs which would worsen the unemployment woes of the country. We appeal to the government to reconsider the ban.”
The Chief Executive Officer, NESG, Mr. ‘Laoye Jaiyeola, said, said the ban would have a significant impact on the economy.
He said, “The impact of Twitter ban on Nigerian economy is not good. Generally, some of us will want to believe that the President must have been ill-advised on the ban. The digital space is one area that we have every potential to grow as a national, given the fact that a number of our people that do not have work at least are able to carry out some legitimate work on the social media.
“It is important that in time like this, we are careful how we add to people’s problems. In a way, it will discourage those who are supposed to come and invest in Nigeria. The small and medium enterprises suffer, and the people suffer.”
Jaiyeola said although the NESG had not done any research on how much the country would lose, it had done a study on the impacts of the digital economy on the country.
He said, “It (digital economy) is not just an enabler to the economy but a sector that we must mine to grow. If well harnessed, it could take people out of poverty and create more jobs.
“Let us not mess up an area where we do not even have control. This is an area where we want people to come and develop. This action is not in the interest of Nigerians.”
A professor of Economics and Public Policy at the University of Uyo, Akwa Ibom State, Akpan Ekpo, described the Twitter ban as a wrong signal to investors.
He said, “It will scare potential investors from coming to Nigeria because it is global practice to allow Twitter to operate.
“Although the government says this is temporary, it is still not a good omen for investors, especially foreign investors and portfolio investors (hot money), they would be scared since they do not know what would happen to other platforms so they might take out their money.”
According to Ekpo, there is a need to think through decisions before taking them.
He said, “The tech space would suffer; they would not raise the amount they raised last year, which was a good year. Tech investment will reduce, although this is an opportunity for innovation also.
“FDI inflow will be greatly reduced. The government should have thought about the business aspect. A lot of young people get employment on this platform and now it is affected, with a high unemployment rate they should have been careful before taking this decision.”
According to Ekpo, investment is a part of GDP, and once investment declines, employment will too.
“Investment generates employment. The Nigerian economy is in a state of stagflation; we have rising inflation and unemployment. So, there is a need for thorough thinking before making economic decisions, so we don’t worsen our situation. I am hoping that very soon they will reverse the suspension in the interest of the economy,” he said.
A former President of the Association of National Accountants of Nigeria, Dr Sam Nzekwe, said the suspension would negatively affect the Federal Government’s plan for a digital economy and portray the government in a bad light internationally.
He said, “It is going to affect online businesses badly because they have to start looking for an alternative for advertising their goods and services, and those alternatives may be expensive.
“In a way, it is going to affect the digital economy. Our economy is still a small one; we need to deploy all facets of digital tools, and I hope that this issue gets resolved.”
Paradigm Initiative, a digital advocacy organisation, put the cost of suspending Twitter operations in Nigeria at $250,600 per hour.
“Exactly 24 hours ago, the government of Nigeria announced the suspension of Twitter operations in Nigeria. Since then, the country has lost N2,177,089,051 ($6,014,390) based on the cost of Shutdown Tool. The loss continues at a rate of N90,712,044 ($250,600) every hour,” it said on Saturday.
The company used the NetBlocks Cost of Shutdown Tool to arrive at the estimate. The tool estimates the economic impact of internet disruptions, mobile data blackouts or app restriction using indicators from the World Bank, International Telecommunication Union, Eurostat, and US Census.
A finance officer at Greenville LNG, Ogidiaka Ovie, said, “Government policies, over time, have discouraged investors. Many multinationals will continue to withdraw from Nigeria like Shoprite. The business environment is harsh in Nigeria.
“The ban on Twitter will surely affect the economy as many businesses now thrive on the Internet. Nigeria may risk denial of loans from multilateral creditors as the majority of these institutions are controlled by the United States, and they have a way of protecting their businesses.”
A finance officer at Vedic Lifecare Nigeria Limited, Okorie Iheanacho, said, “A lot of business transactions are being carried out on Twitter. As a result of the ban, there may be a temporary loss of activities there. Unemployment may occur if it lingers for long as companies would reduce their admin expenses.
“The ban sends a negative signal to both prospective and existing investors on the economy as they would not like to have a physical presence in Nigeria. This will lead to reduction in income flow to the economy in the form of tax.”
The Peoples Democratic Party caucus in the House of Representatives asked the Federal Government to lift the ban or it would take legal action against it.
Leader of the PDP caucus, Kingsley Chinda, made this known in a statement on Sunday and titled ‘Press Release on Suspension of Twitter in Nigeria.’
On his part, the Benue State Governor, Samuel Ortom, said that the ban had no solution to any of the myriad of problems confronting the nation.
Ortom described the ban as an ill-advised diversion from the core issues of insecurity and injustice plaguing the nation.
According to the statement by his Chief Press Secretary, Terver Akase, Ortom said, “The Twitter ban offers no solution to any of the myriad of problems facing the country.
He stressed that the move was only capable of heightening tensions and fuelling suspicions among Nigerians.
A lawyer, Dr Kayode Ajulo, said the order of the Attorney General of the Federation and Minister of Justice, Abubakar Malami, for the prosecution of violators of the Twitter ban was contrary to provisions of the nation’s constitution.
Ajulo made his position known in a statement titled, ‘Legality or otherwise of the directive to prosecute violators of Twitter ban in Nigeria – Ajulo.’
He was responding to Malami’s directive to the Director of Public Prosecution of the Federation to prosecute all those found to be violating the Twitter ban.
A civil rights movement under the aegis of Yiaga Africa also condemned the indefinite suspension of Twitter services.
The organisation said the directive that all Over-The-Top services must be licensed by the National Broadcasting Commission before they could operate within Nigeria had sent “a dangerous signal to the world that Nigeria is not open for investments, particularly in the technology and entertainment sector.”
“To this end, we call on the Federal Government to reverse this decision immediately, and to refrain from further assault on press freedom, freedom of expression and free speech”, YA said in a statement by its Director of Programmes, Cynthia Mbamalu.
The Centre for Social Justice in its reaction stressing that various sub-sectors in the information and communication would suffer economically.
Lead Director, CSJ, Eze Onyekpere, said the ban was a gross violation of Nigerians’ human rights and economic obligations to respect already accrued economic and social rights.
He urged the government to refrain from taking steps that would prevent Nigerians from accessing services provided by third parties which did not violate laws enacted by the respective legislatures.
He said, “The contribution to aggregate real Gross Domestic Product as at Quarter 1 of 2021 by the information and communications sector where Twitter and other social media platforms belong is valued at 14.91 per cent, being one of the largest contributors to the total output of the country.
“The information and communication sector is composed of the four activities of telecommunications and information services; publishing; motion picture, sound recording and music production; and broadcasting./
“Recall that the Nigerian economy grew by less than one per cent specifically by 0.51 per cent in Quarter 1 of 2021.”
Onyekpere noted that the contributions of the major sectors to aggregate real GDP showed that the oil sector accounted for 9.25 per cent; agriculture, 22.35 per cent; manufacturing, 9.93 per cent; trade, 15.61 per cent; construction, 4.12 per cent; etc.
He said, “The overall growth pattern of the economy in the first quarter of 2021 was tepid and did not match population growth.
“It failed to respond to stagflation – high unemployment, slow growth, inflation, and other macroeconomic challenges facing the nation. That Nigeria is just struggling to exit recession even compounds the scenario.”
Onyekpere added, “Twitter as part of social media platforms is a veritable medium for the outreach of enterprises in the ICT and other sectors.
“Banning Twitter will slowpoke investments, productivity, employment generation and the overall output and outcome of the economy.”