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  Nigerian businesses have had it tough for decades. Braving away the storm in the middle of over-regulation policies has been the norm for businesses that must survive against all odds.
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Wherever infrastructure such as good access roads, stable power supply, etc are inadequate, businesses and enterprises are known to resolve into self-help. This is why many businesses have settled for providing their own infrastructure. This is also partly the reason why private businesses such as Dangote Group have resolved into rebuilding specific Federal Government roads across the country in order to aid the free movement of their merchandise to the end-user. Meanwhile, while behemoths such as Dangote Group have it fair, upcoming and fledgling businesses are being persecuted for no clear-cut reason. Just last week, the Central Bank of Nigeria (CBN) secured an egregious ex-parte order to freeze the bank accounts of four Fintech companies for 180 days. The online wealth management platforms – Risevest, Chaka, Trove & Bamboo were accused of round-tripping by illegally obtaining FOREX and their bank accounts were summarily frozen. The companies were not even given the opportunity to defend the allegations before the sitting Federal High Court granted the prayers of the CBN. It is worthy to note that the Securities and Exchange Commission (SEC), a regulatory body in Nigeria, had already granted operating licenses to the four companies under the asset management categories for stock trading. And everyone familiar with the operations of these tech-driven wealth management companies knows that the allegations are not true. Some have also alleged that because these allegations are spurious, it is one that will dampen the confidence of investors willing to invest their monies in Nigeria.
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If the government is promising to boost the attractiveness of Nigeria to do business with the outside world, why should it come back to destroy that prospect with unfounded claims? If the Nigerian government are all about making things up to pass arbitrary laws, it is safe to say that the people too will adjust as has been the culture for decades where citizens resort to self-help. Already, the four companies have announced that their customers need not fret – disclosing that the frozen bank accounts affected were not their main operational accounts. It was in the middle of this that word also got out that a bill proposed by another government parastatal, the Nigerian Information & Technology Development Agency (NITDA) is also seeking to compel licensing fees equal to 1% profit share pre-EBITDA for companies with over ₦100 million in revenue in Nigeria. Clearly, this amounts to over-taxation. Another implication of this whole scenario is that innovative companies may now begin to take flight by moving their operational headquarters abroad to more business-friendly environments where businesses will be safer and more profitable. Perhaps, contrary to good advice, the CBN is of the belief that these Fintech companies are contributing to why the Naira is weak; while ignoring its numerous non-practical monetary and the Federal Government’s fiscal policies. Bottom line is, if the government cannot improve the fortunes of the emerging digital economy, it is better to let go of over-regulation so as not to stifle such emerging sectors that are providing thousands of jobs and creating wealth for a lot of younger Nigerians. Featured Image Source: The Source:
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This article was first published on 27th August 2021


Macaddy is mostly a farmer in the day who also dabbles into technology at night, in search of other cutting edge intersections. He's on Twitter @i_fix_you

Comments (1)

One thought on “A Look At Government Clamp-Down On FinTech Companies”

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