INTRODUCTION
The proposed amendment bill to the Nigerian Data Protection Act, 2023 which has scaled second reading on the 18th of March, 2025, aims to regulate social media platforms, enforce tax compliance, and establish legal accountability for digital businesses. The bill, titled “A Bill for an Act to Amend the Nigeria Data Protection Act, 2023, to Mandate the Establishment of Physical Offices within the Territorial Boundaries of the Federal Republic of Nigeria by Social Media Platforms, and for Related Matters, 2025 (SB. 650),” was sponsored by Senator Ned Munir Nwoko (APC, Delta North).
While the objectives of generating revenue, creating jobs, and improving digital governance are laudable, the bill raises significant concerns, particularly regarding its potential impact on Nigerian youths who rely heavily on social media content creation for income.
KEY CONCERNS AND POTENTIAL NEGATIVE IMPACTS:
Stifling Youth Entrepreneurship and Restricting Online Freedom:
Section 5(p) of the bill, which mandates social media platforms, data controllers, and data processors to establish and maintain physical offices within Nigeria, creates significant barriers to entry for young content creators.
Many youths operate independently or in small teams, lacking the resources to comply with these demands. This provision may stifle online expression and creativity, potentially harming Nigeria’s burgeoning digital economy.
This could effectively shut down a vital source of income for a demographic already facing high unemployment.
Regulatory Overreach:
The bill’s requirement for bloggers and online content creators to register with the Corporate Affairs Commission (CAC) and maintain a verifiable office address (Section 65) may be overly burdensome. This could lead to unintended consequences, such as driving small-scale content creators out of business.
The requirement for physical offices for social media platforms is excessive. Social media platforms are fundamentally online based businesses, and physical offices does not directly translate to better regulation or compliance.
Taxation Burden:
While taxation is essential, the bill’s approach might be overly aggressive, especially for those just starting.
Imposing tax burdens on bloggers and content creators, especially those with fluctuating or low incomes, could discourage innovation and entrepreneurship.
The threshold for taxation is not defined in the provided document, thus leaving room for abuse.
Lack of Nuance and Economic Impact:
The bill appears to treat all social media content creators as a homogenous group, failing to recognize the diverse nature of the industry. It doesn’t differentiate between large-scale influencers and small-time creators, applying the same regulations to both.
The bill’s focus on taxation and job creation may overlook the potential negative economic impacts of increased regulation on Nigeria’s digital sector.
The bill also does not adequately address the already existing high costs of browsing data, and poor internet infrastructure, which already limits the earning potential of youths. For instance, the requirement for social media platforms to employ at least 200,000 Nigerian youths (as stated by Senator Ned Nwoko in an interview) may lead to increased operational costs, potentially deterring foreign investment.
Potential for Abuse:
The broad language of the bill could be used to suppress dissent or target specific individuals or groups. The lack of clear guidelines and oversight mechanisms could lead to arbitrary enforcement.
Job Creation Claims:
While the bill proponent, Senator Ned Nwoko in an interview granted claims the bill when passed would create 200,000 jobs, it’s unclear how these jobs will be distributed and whether they will genuinely benefit Nigerian youths.
The type of jobs proposed, such as customer service and content moderation, may not align with the skills and aspirations of many young content creators.
Potential Benefits:
i. Increased Revenue: The bill aims to generate revenue by requiring social media platforms to pay taxes and establish physical offices in Nigeria. As Senator Nwoko noted, Nigeria loses at least $10 billion annually due to tax evasion by major digital platforms.
ii. Job Creation: The proposed legislation seeks to create job opportunities for Nigerian youths in roles such as customer service, content moderation, and technology.
iii. Improved Accountability: The bill aims to establish legal accountability for digital businesses operating in Nigeria, enhancing the country’s digital governance.
Recommendations:
1. Tailored Regulations: Develop regulations that are proportionate to the size and scale of online businesses.
2. Tax Incentives: Consider tax incentives for young content creators to encourage growth and innovation.
3. Support and Training: Provide training and resources to help young people develop their digital skills and build sustainable online businesses.
4. Stakeholder Engagement: Conduct thorough consultations with content creators, industry experts, digital rights advocates, and youth representatives to ensure that the bill balances regulation with the needs of Nigeria’s digital economy.
5. Flexible Regulations: The government should consider implementing flexible regulations that accommodate the diverse needs of Nigeria’s digital sector, rather than imposing overly restrictive requirements.
6. Digital Literacy: The government should invest in digital literacy programs to equip Nigerian youths with the skills needed to thrive in the digital economy, rather than relying solely on regulation.
7. Focus on Infrastructure: Prioritize investments in internet infrastructure and affordable data to support the growth of the digital economy.
8. Clear and Precise Language: Ensure that the bill’s language is clear, specific, and avoids ambiguity.
9. Gradual Implementation: Implement regulations gradually to allow young content creators to adapt.
Conclusion:
While regulating the digital space is necessary, this proposed bill appears to be overly restrictive and could have unintended consequences for Nigerian youths. A more nuanced and balanced approach is needed to foster a thriving digital economy while protecting the interests of all stakeholders. The Nigerian government must engage with stakeholders to create a more balanced and effective regulatory framework that supports the growth of the digital economy while protecting the interests of Nigerian youths.
The Bill is replicated verbatim below for ease of reference
A BILL FOR AN ACT TO ALTER THE NIGERIA DATA PROTECTION ACT, 2023, LFN, TO MANDATE THE ESTABLISHMENT OF PHYSICAL OFFICES WITHIN THE TERRITORIAL BOUNDARIES OF THE FEDERAL REPUBLIC OF NIGERIA BY SOCIAL MEDIA PLATFORMS, AND FOR RELATED MATTERS. BE IT ENACTED – by the National Assembly of the Federal Republic of Nigeria as follows:
The Nigeria Data Protection Act, LFN, 2023 (in this Bill referred to as “the Principal Act”) is altered as set out hereunder:
Section 5 of the Principal Act is altered by the addition of a new article P, which shall read:
“S, 5(p)The Commission shall mandate all data controllers, data processors, or operators of social media platforms to establish and maintain a physical office situated within the territorial boundaries of the Federal Republic of Nigeria. Failure to comply with this requirement for a continuous period of 30 days shall render the entity liable to a prohibition from conducting operations within the jurisdiction of Nigeria.”
Section 65 of the Principal Act is altered by the addition of new terms and their interpretations, which shall read:
““Data Controllers” means entities that determine the purposes and means of processing personal data and bear legal responsibility for compliance with data protection laws.
“Data Processors” means entities that process personal data on behalf of a data controller based on specific instructions and without autonomy over the purposes or means of processing.
“Operators of Social Media Platforms” means legal persons or entities responsible for owning, managing, or controlling digital platforms that facilitate user interaction, content sharing, or communication.
“Physical Office” means a fixed and operational business location within the Federal Republic of Nigeria, staffed and authorized to engage with regulators, stakeholders, and the public for the purpose of fulfilling legal and operational obligations.
“Social Media Platforms” means digital or online networks operated by legal entities that enable users to create, share, and interact with content, including text, images, videos, and other forms of communication, and facilitate public or private social interaction.”
EXPLANATORY MEMORANDUM
This Bill seeks to amend the Nigeria Data Protection Act, 2023, to mandate social media platforms, data controllers, and data processors operating within Nigeria to establish and maintain physical offices within the country’s territorial boundaries. The amendment aims to enhance the swift resolution of complaints, foster stakeholder confidence, ensure compliance with global best practices, and provide economic and security benefits to the nation.