Funmilayo Odude, Legal Practitioner, Damod Law Practice

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No democratic freedom no FDI for Nigeria 10 May 2021

Last month, the international tech giant, Twitter, announced that it would be opening its Africa regional office in Ghana. It was not a decision the social media company would have taken by simply overlooking Nigeria. According to Statista, the number of Nigerians on social media reached 28 million in 2020, and 61.4 per cent of them were on Twitter. Compared with Ghana with only 15 per cent of Nigeria’s population size, only 8 million Ghanaians were on social media. Twitter was far less popular among Ghanaians using social media, with only 21.7 per cent of them on Twitter.   

Twitter’s Product Leader, Kayvon Beykpour, and its Director for Product Management and Global Markets, Uche Adegbite, explained the reason Ghana was the preference of the company in siting its Africa Regional Office. “As a champion for democracy, Ghana is a supporter of free speech, online freedom, and the Open Internet, of which Twitter is also an advocate,” the duo wrote in a blog post on April 21.

The officials of the social media company also said that the recent decision by the African Union (AU) to locate the secretariat of the African Continental Free Trade Area (AfCFTA) in Ghana aligned with the overarching goal of Twitter to establish a presence in the region that will support its efforts to improve and tailor its service across Africa. The AU itself might have decided to establish AfCFTA’s secretariat in Ghana for the first reason Twitter gave for its own decision, and in spite of Nigeria being the largest market in Africa.

But the Nigerian officialdom nevertheless felt entitled and had to come up with an excuse for being snubbed by Twitter. The country’s Minister of Information and Culture, Lai Mohammed, blamed the negative media coverage the country got last year during the #EndSARS protests. However, the peaceful protest against police brutality, which gained international sympathy on Twitter, was brutally quelled by the state security operatives.

Nigeria has been struggling with its current nominal democracy of 22 years, which is the longest stretch of civilian administration in the country since independence in 1960. In a current saga that denies the people democratic accountability of public officials, the Minister of Communications and Digital Economy, Isa Pantami, has not resigned or been sacked after his extremist views expressed up to 2010 recently came to light and aroused public indignation. Instead, the government absolved him of accountability by asserting that Pantami expressed his views supporting terror and terrorists many years before he was appointed minister.

As of the time of writing this article, the Nigerian courts are again on lockdown by the Judiciary Staff Union of Nigeria (JUSUN). The labour union is protesting the refusal of the state governors to give effect to the constitutional provisions guaranteeing financial autonomy for the Judiciary.

Democracy and its tenets of free speech and independent judiciary are not part of the metrics used in the global indexes on the ease of doing business. World Bank’s Ease of Doing Business measures such factors as Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Protecting Minority Investors, Paying Taxes, etc. Nigeria invested in policies, under the Presidential Enabling Business Environment Council (PEBEC) established in 2016, to improve the country’s ranking on the main index the indicators.

Perhaps these indicators are more relevant to retaining and deepening investments in a jurisdiction than in attracting new foreign investment. Nigeria’s significant leap on the World Bank Ease of Doing Business in 2019 has not corelated to higher inward Foreign Direct Investment (FDI). In avoiding measuring political factors such as freedom of speech and constitutionalism, which indicate a more predictable environment for investors, the Nigerian government, like many others, were railroaded into chasing the less weighty factors.

For local investors, but more so for foreign ones, a strong and vibrant democracy is the overarchingly enabling environment for business. It creates the needed assurance of safety of private sector investments that may actually facilitate the indicators measured by the World Bank. Democratic freedom is the more important for a business platform that thrives on people connecting to discuss anything and everything within a loosely formulated and equally loosely enforced communication gatekeeping. Ghana’s more developed democratic culture has now drawn strong correction to attraction of FDI and should be instructive for the Nigerian authorities.

It is important to identify some of the recent actions of the Nigerian government that are undermining the country’s constitutional democracy and the potential to leverage it for FDI. As already mentioned, the peaceful #EndSARS protest of last October was crushed by the security forces. Thereafter, the Nigerian Broadcasting Commission (NBC) sanctioned three television stations over their coverage of the protest. The country’s monetary authority, the Central Bank of Nigeria (CBN), joined in the retributive actions of the state by blocking the bank accounts of the leaders of the protest movement.

Before and in the aftermath of the #EndSARS protest, many citizens were arrested by security operatives and detained for long periods of time. One of such was citizen Eromosele Adene, popularly referred to as Eromz. The founder of Naija Live TV, Saint Mieripamo Onitsha, was arrested on the 9th of May 2020, in his home in Yenagoa, Bayelsa State by agents of the Department of State Services (DSS). His offense was that he dared to report the news.

Another publisher, Agba Jalingo, was arrested for publishing articles that were not flattering of governor of his home state of Cross River. He has now been charged to court, not only under the Cybercrimes Act, but also under the Terrorism Act. The charges are punishable by life imprisonment or death penalty on conviction. The list of victims of repression of journalists and media organisations include Abiri Jones, the editor and publisher of The Weekly Source in Yenagoa, Bayelsa State. He was kept in detention for over two years and later charged with terrorism and cybercrimes.

Most foreign investors from the powerful Western countries would hardly exercise self-assured hubris in believing that they would be treated much better than the Nigerian government treats the citizens. For sure, Nigeria has been trying to nurture its nascent democratic culture. It has also avoided the expropriation of foreign-owned assets in the country. But it would be understandable if, for example, Twitter’s CEO, Jack Dorsey, expressed fear that his company would have been sealed up during the #EndSARS protest, even if temporarily, were he to have an office here. He could also imagine that the CBN, which has undone its image of investor-friendliness over the decades by its recent capital controls, may also freeze Twitter’s Nigeria account, if it was existent. The lack of an independent judiciary fuels such serious fears foreign investors have for frontier markets.

Nigeria’s struggle with democratic governance is inadvertently putting it at odds with two of the powerful industries of the 21st century: social media and cryptocurrency. First in 2015, and four years later, the National Assembly tried to introduce laws to regulate social media in the country. Similarly, the CBN has twice issued directives banning the banks from facilitating trading in cryptocurrency in Nigeria. Borrowing from the government’s parlance, these efforts were direct attacks against the interest of the citizens. More Nigerians are signing up to social media platforms even as the government is planning to restrict the use of the platforms through draconian legislations. And since the CBN banned trading in cryptocurrency, the usage of Bitcoin’s peer-to-peer trading platforms by Nigerians have surged by at least 27 per cent. Nigeria remains the second-largest Bitcoin market in the world, after the United States.

The government needs to resolve its differences with the people in the context of the country’s democracy in order that foreign investments would regain lost momentum in Nigeria. Before the decisions of the AU and Twitter to locate AfCFTA’s secretariat and the regional office of Twitter, respectively, in Ghana, Amazon had announced last year that it was setting up its regional office for Africa in South Africa. This suggests Nigeria is no longer competitive either against its main rival – South Africa, Africa’s second-largest economy after Nigeria – or its tiny neighbour – Ghana.

To reverse this trend, the issue of insecurity in Nigeria has to be squarely addressed while deliberately strengthening the country’s democracy. Government’s sympathy for its cabinet member that is known to support terrorists is not helpful. That Pantami is overseeing a ministry that is very sensitive to the international policy and investment communities only makes matters worse. Moreover, in a “government of the people by the people and for the people,” Pantami should resign or be sacked given the concern of citizens about his continued stay in office.

Funmilayo Odude, a Financial Nigeria columnist, is a Lagos-based legal practitioner, and a public affairs analyst.