It’s needless to point out that Nigerians do not get any benefits from being citizens of the Nigerian state, especially, post-fuel subsidy. I once had a hearty reflection on how citizens of other nations benefit from their governments, either through Universal Basic Income (UBI) or Universal Basic Services (UBS).
In UBI, citizens receive a token amount from the government monthly, which can be used for anything. In UBS, the government subsidizes certain services, such as housing, roads, water, electricity, and more. However, in Nigeria, unless your family is affiliated with politicians or the government, there’s hardly anything to benefit.
There is a quandary around what should constitute UBI or UBS. That is, how do we conclude what amount is good enough for UBI or which services are best to be included under UBS? In Nigeria of today, I must admit that many youths would choose data as their UBS or the equivalent amount for their monthly subscription as UBI.
Some people may disagree with this postulation, but considering that the monthly data cost of ₦10,000 (N120,000 annually) is higher than the annual house rent of 40% of Nigerians, is a valid point. Many Nigerians spend more than ₦10,000 on data monthly, but ₦10,000 is the baseline.
Let’s do the math. The Nigerian government’s top-taxed sector among others, is telecommunication services. Telecommunication companies in Nigeria are subject to various taxes, including Companies Income Tax (CIT), Value Added Tax (VAT) at 12.5%, and an excise duty rate of 5%. The CIT rate for telecommunication companies is 30% of their taxable profits. In 2024, the estimated telecommunication tax was around ₦565 billion. Nigeria’s internet penetration rate is approximately 80%.
However, the population of adults in Nigeria, aged 18 and above, is around 41.7% of the total population of over 220 million, which means there are approximately 93 million adults in Nigeria. If the government were to pay each citizen a UBI of ₦10,000, it would cost around ₦930 billion, almost twice the revenue generated from telecommunication services. This is too heavy a burden for a poor country. A more feasible option would be a UBI of ₦5,000, which would cost around ₦465 billion, eroding a significant portion of the telecommunication tax revenue.
However, through internet services, Nigerians can earn taxable income if they engage in productive online activities. But there is another issue related to if the government is to provide internet data, many Nigerians would likely use it for non-productive activities.
But then, one great lesson from economics is that you can’t control behaviour, but you can take away the benefits of that behaviour. By removing the incentives, the behaviour will die naturally.
Unfortunately, the Nigerian government seems less interested in creating a productive citizens, and little thought is given to policies that affect the most vulnerable populations. Despite earning millions from Facebook and Netflix in VAT and CIT since 2024, the government’s priorities remain unclear as it relates to creating a productive online space for Nigerians.
So, will you accept Data as UBS or UBI?