SBM Intel – The economics of police brutality in Nigeria
During the COVID-19-induced-interstate travel ban, a Premium Times reporter counted about 58 checkpoints from the Sagamu bypass to the Delta State end of the Niger Bridge. Despite the proliferation of checkpoints on the road, all the drivers of minivans that were travelling and other commercial vehicles needed to pass through were to pay a bribe of at least ₦500 ($1.11) at each checkpoint.
That means a single bus would have had to pay a minimum of ₦29,000 ($66) to go from Jibowu, a major bus terminal in Lagos, to Upper Iweka, a major terminating point in Onitsha, a 460km journey.
The price differentials would, of course, be passed on to the travellers. The investigation also showed that though many of the checkpoints were just a few metres apart, the heaviest clusters of checkpoints on the route were at state boundaries.
This year alone, between January and October 2020 the number of force brutality incidents, and these include the Nigerian Armed Forces, the Nigeria Police Force, the Nigeria Security and Civil Defence Corps, and the Nigeria Customer Service, stands at 88. About 116 people have been killed in these 88 incidents. Of the 88 incidents, at least 51% of cases (46) were attributed to police brutality.
Many Nigerians have taken up building a significant online presence to attract advertisers. Nigeria, like other emerging markets, has continued to see an increase in the amount of time spent on social media networks. This has been credited to its young population, the major driver of the segment.
With a solid online presence, anyone can offer their platform to advertisers and make significant earnings by not leaving their home. According to Dotts Media, international brand influencers get paid as much as $50,000 and some Nigerian influencers make as much as ₦1 million for a single promoted post.
The export of services is a major contributor to the GDP of some of the world’s biggest economies. Nigeria currently has a negative trade imbalance and should encourage every opportunity to correct that especially through the export of services.
To understand the impact of dollar income in Nigeria, it is important to consider the country’s economic structure and international characteristics. For foreign exchange, Nigeria is reliant, almost entirely, on oil earnings. Our local manufacturing and services are almost non-existent. The country increasingly relies on the importation of goods and many services. This means that Nigeria relies on dollar earnings to do the above and reliance increases more than can be managed.
As a result, any hit to the inflow of dollars could cause an FX trade war — and the naira always loses. A weaker naira means a weaker economy and debt servicing becomes a bigger burden than it should be and subsidy cost increases. Thus, every remote worker earning USD is one pillar that keeps the economy going.
With the obvious potential for the growth of technology companies in the country and Nigeria fast becoming a prime spot for technology startups and investment, the continuous harassment of young professionals leveraging on technology to earn a living, either as content creators, podcasters, software developers, online marketers, or other roles, could mean that the country stands to lose millions of dollars in foreign exchange (FX), foreign direct investment (FDI) and gross domestic product (GDP).
In addition, the continuous extortion of persons in the internet and technology services industry makes the ease of doing business much more difficult, thereby frustrating the government’s effort to make business processes easy enough to attract investors.
To contextualise how big the technology services industry is in Nigeria, two Nigerian fintech companies – OPay and PalmPay – raised a cumulative $210 million in funding rounds, primarily from Chinese investors.
Available data shows that about 99% of investment raised by Nigerian startups were from external sources (non-Nigerian sources). By the end of the first quarter of 2020, startups in Africa’s largest economy had raised a cumulative sum of USD55.3 million. Without the requisite reforms to the police, the ease of doing business in Nigeria for these companies is likely to get worse and more of these types of investment will decline.