Recent regulatory changes in Nigeria have drawn attention from the U.S. House of Representatives Foreign Affairs Committee due to concerns over their potential effects on American investments. Chairman Brian Mast (R-Florida) brought this up in a letter to the Nigerian ambassador in the U.S.
The airtime and data lending sector in Nigeria is largely controlled by Nairtime Nigeria Limited (NNL), which enables users to borrow airtime or data and settle the payment after recharging. However, new guidelines from the government, known as the Digital, Electronic, Online and Non-Traditional Consumer Lending Regulations (DEON Regulations), enforced by the Federal Competition and Consumer Protection Commission (FCCPC), are changing the landscape.
According to the DEON regulations, advances for airtime and data are now classified as consumer credit rather than simple telecommunications services. Consequently, some carriers have halted or limited airtime lending operations as they navigate these compliance requirements.
The May report indicated that “Nigeria’s airtime and data credit market is experiencing substantial regulatory changes.” What used to be seen mainly as a telecommunications service is now included in a wider digital consumer finance framework.
NNL operates as a subsidiary of Optasia, a financial technology firm based in South Africa, which has attracted investments from major U.S. firms like BlackRock and State Street.
President Bola Ahmed Tinubu instructed the FCCPC to “dismantle” NNL’s two-decade monopoly, arguing that this aligns with the administration’s Nigeria First economic agenda, as reported by the Abuja commission.
The FCCPC subsequently provided a list of approved airtime and data lenders, with NNL excluded.
This shift has reportedly impacted millions of Nigerian consumers due to the suspension of loan offerings.
The Wireless Application Service Providers Association of Nigeria (WASPAN) has contested elements of the new regulation in court, claiming that such telecommunications services should primarily be regulated by the Nigerian Communications Commission, not the FCCPC.
On April 15, a Federal High Court in Nigeria reportedly issued a temporary injunction preventing the FCCPC from further enforcement actions related to this issue until a future court resolution.
Despite the court ruling, services seem to have been delayed, according to a report from Business Day Nigeria.
The FCCPC has “denied any involvement in media reports indicating presidential support.” Some reports characterize the situation as an opposition against a foreign monopoly.
In his capacity as Chairman of the House Foreign Affairs Committee, Congressman Mast reached out to Ambassador Lateef Kayode Kolawole, expressing concern that “Large U.S.-linked asset managers and pension-related investment vehicles could face financial harm from this sudden and legally uncertain regulatory intervention,” based on exclusive information.
Mast emphasized the potential disregard for judicial rulings by Nigerian regulators and how that might significantly affect U.S. investor capital, particularly for retirement plans and pensions tied to U.S. financial institutions.
After reviewing the situation, Mast sought clarification on whether recent actions have harmed U.S. shareholder value and if Nigeria is fully complying with judicial orders.
“Nigeria is a vital commercial and strategic partner for the United States,” Mast stated in the letter. He stressed the need for an environment that maintains trust among investors, underscoring the importance of a legal framework that upholds commercial fairness.
Mast concluded his letter with requests for:
- Clarifications on the entity responsible for safeguarding foreign investor rights affected by regulatory disputes.
- An ongoing commitment from the Nigerian government to transparent governance rules for all market players.
- A written response within 30 days addressing these concerns.
Mast expressed appreciation for prompt responses and a desire for continued cooperation based on economic trust and legal transparency.
David Hundane, a Nigerian investigative journalist, suspects that President Tinubu’s associates are manipulating these regulations to dominate the airtime financing market.
On June 2, Mr. Fundein accused Mr. Tinubu’s adviser on technology, his brother Idris Albanki Saliu, of establishing “one of the largest and most powerful state corruption enterprises in Nigeria’s history.” Hundane remarked, “They are trying to control the critical infrastructure of Nigeria’s entire economy.”
Albanki Saliu has not responded to requests for comment.
