UNDERSTANDING THE DIGITAL IDENTITY ECOSYSTEM POLICY

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BACKGROUND

In April 2017, the Federal Government of Nigeria (FGN) launched The Economic Recovery and Growth Plan (ERGP). The ERGP highlights the complex development challenges Nigeria grapples with. With a population size of 185.9 million people, Nigeria grapples with poverty, inequality, youth unemployment, and an undiversified economy. Currently, 61% of people live below the poverty line. 22% of the labor force involves unemployed youths. 95% of exports are from the oil sector, with manufacturing accounting for less than 1% of the country’s exports. The economic downturn is further precipitated by weak infrastructure, challenges in fiscal management, and lack of transparency and accountability. For the FGN to realize the ERGP and deliver key services to people, it needs to know who the people are. Identification, therefore, becomes a necessity for the country’s economic, social and political progress.

Problem Statement

Despite the urgent need, identification remains underdeveloped in Nigeria. Currently, about 38% of people in Nigeria do not have any form of ID. About 13 or more Federal agencies, and another 3 or more State agencies, offer ID services in Nigeria. Each government agency collects the same biometric information of people, overlapping efforts within government, at a high cost. In December 2016, a high-level multi-stakeholder policy roundtable meeting was held at Abuja. The information harvested from the meeting, alongside the ERGP and other previous studies on identification in Nigeria, led to the development of a Strategic Roadmap for Developing Digital Identification in Nigeria. The roadmap offers a credible pathway for the FGN to develop identification, at a low cost and fast pace over the next 3-5 years. It also provides policy, institutional, and operational choices for the Federal Government. The roadmap proposes a modified approach to developing identification, leveraging the FGN’s existing institutions, capacities, and systems.

 

The Policy Solution – Ecosystem Approach

To achieve a rapid scale-up of nationwide enrollment, the National Identity Management Commission (NIMC) has opted for an ecosystem approach. This means leveraging the capacities of existing government agencies and partners. Precisely, NIMC will be partnering with other public and private sector service providers including federal, state, and local Ministries, Departments and Agencies (MDAs), Civil Society Organizations, and others, as well as qualified private vendors for the provision of data collection services and issuance of National Identification Number (NIN). Enrolment of individuals remains free. However, licensed private vendors using their own resources to carry out enrolment and NIN issuance services would be remunerated on a pay-per-play basis. That is, they get paid US$1.00 (NGN450.00) for each successful enrolment of a person, complete with the issuance of a valid unique National Identification Number (NIN).

Funding the Ecosystem

The Ecosystem would be financed through an International Development Association (IDA) credit of US$115 million with co-financing of US$100 million from the French Agency for Development and US$215 million from the European Investment Bank, bringing the total amount to $433 million. On February 18, 2020, the World Bank at its meeting in Washington DC, USA, approved US$430 million to fund the Ecosystem project. According to the World Bank Statement: “This will enable people in Nigeria, especially marginalized groups, to access welfare-enhancing services. The project will also enhance the ID system’s legal and technical safeguards to protect personal data and privacy. It is pertinent to understand that only $197 million of the total $433 million will be utilized as remuneration to the licensed vendors.

NIGAC Constructive Position/Take

While the ecosystem approach of bringing in private sector vendors is a brilliant idea, the fact that the approach is anchored on funding from international donor organizations is problematic. Problematic in the sense that, the $433 million which is about NGN194,850,000,000 billion was approved by the World Bank as a loan, not grant or support. If NIMC, on behalf of the Nigerian Government eventually accesses these funds, it would add to our already skyrocketed external loan burden which stands at NN32.51tn as of December 31, 2020, and projected to rise to N38.68tn by December 31, 2021, according to the Debt Management Office (DMO).

The cost of servicing debt in Nigeria has adverse effects on both economic and human development. For instance, Nigeria plans to spend at least 24% of its 2021 N13.5trn ($35.7bn) budget on debt servicing. The continuous increase in national debt servicing, no doubt crowds out expenditure on critical infrastructures and human development activities. Even when there is a shortfall in revenue, debts will still need to be serviced and paid back at the expense of capital projects that could address social development. This could worsen the already deplorable state of unemployment, inequality, health and poverty in the country.

Alternative Financing for the Ecosystem ID Project

It is the strong take of NIGAC that the Federal Government should jettison its plans to obtain $433 million from the World Bank as a loan to fund the Digital Identity Ecosystem. Going through the history of government borrowing in Nigeria, evidence shows that there has been little or no regard for fiscal discipline. Given the current condition of the Nigerian economy, debt crisis/overhang could worsen the poverty and inequalities existing in the country that is already in a deplorable state. This is a call for caution and a more workable strategy that is not hinged on external loans.

As an alternative, the existing infrastructure of Telcos operating in Nigeria should be leveraged to accelerate NIN enrolment. The ongoing NIN-SIM integration exercise has already shown that this is possible. The four Mobile Network giants in Nigeria – MTN, Airtel, Globacom, and 9mobile – have agreed to activate their outlets across the federation as NIN enrolment centers. The enrollment license issued to the network operators by NIMC also empowers them to rollout enrolment centers across streets, rural communities, and towns in the country without the pay-per-play funding arrangement by the World Bank. In fact, the four major network operators have committed to enrolling 100 million Nigerians within one year without recourse to World Bank funding. When these projected figures are considered and complemented by the existing NIMC enrolment systems and infrastructure, it, therefore, makes for a strong case that the World Bank arrangement should be ditched and Nigerians spared another humongous debt burden.

 

Elvis Ogah

Non-Resident Policy Fellow

 

 

 

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