As President Bola Ahmed Tinubu’s administration crosses the midterm milestone, analysts have rated the government’s performance in the digital economy and technology development space as average, citing declining internet adoption, regulatory overreach, and insufficient support for tech startups as key impediments.

Internet User Base Shrinks Amid Economic Pressures

Data affordability remains a critical concern. According to Mr. Gbenga Sesan, Executive Director at Paradigm Initiative (PIN), Nigeria’s internet penetration, which had shown steady growth following earlier setbacks linked to NIN-SIM linkage challenges, has recently experienced a significant reversal. Over one million users reportedly dropped off the internet in the past year, largely due to a 50% increase in data tariffs by telecom operators and broader macroeconomic hardship.

“The decline in active users is deeply tied to affordability. While internet access had recovered post-NIN/SIM linkage missteps under the previous administration, current economic pressures—particularly inflation and tariff hikes—are reversing those gains,” Sesan said.

Security Concerns Persist Despite SIM-NIN Integration

Despite the national mandate linking SIM cards to citizens’ National Identification Numbers (NIN), kidnapping and violent crimes remain unabated, casting doubt on the utility of the policy under the current administration. Between January and May 2025, over 150 individuals were abducted across various states and the Federal Capital Territory, with thousands of related fatalities recorded since 2023.

With more than 155 million active SIMs in Nigeria now linked to individual identities, observers are questioning why criminal elements continue to operate with apparent impunity. Telecom operators have pointed fingers at security agencies, insisting that law enforcement is not fully utilizing the data and geolocation tools provided to them.

“The telecoms sector provides all requested information, including real-time location data, to security agencies. The question should be: how are those agencies using that intelligence?” said Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON).

This sentiment echoes earlier remarks by former Minister of Communications and Digital Economy, Isa Pantami, who stressed that the SIM-NIN policy is functional but underutilized by security operatives.

Limited Support for Startups, Regulatory Tensions Persist

While the 2022 Nigeria Startup Act was envisioned as a transformative tool for innovation, many industry insiders argue that its implementation has stalled. According to tech entrepreneur and AI researcher Engr. AbdulMuiz Oyewole, the startup ecosystem continues to face challenges ranging from underfunding to regulatory unpredictability.

Oyewole noted that while the rollout of 5G technology offers long-term promise, affordability is declining. With the devaluation of the naira and a reported 65% increase in the cost of 1GB of data, access to reliable internet is becoming stratified, further marginalizing small businesses and low-income users.

“Broadband penetration, currently hovering around 45% in early 2025, is not on track to meet the targets of the National Broadband Plan,” Oyewole warned. He urged the administration to incentivize infrastructure investment through stable policies and fiscal support.

Regulatory Framework: Balancing Innovation and Oversight

Stakeholders have identified a dual reality in the regulatory environment. While policies such as the Nigeria Data Protection Act and the Central Bank of Nigeria’s digital payment initiatives are seen as enabling frameworks, other developments raise red flags.

The expanded authority granted to the Advertising Regulatory Council of Nigeria (ARCON) in early 2025 exemplifies this tension. Although ARCON’s goal of ethical advertising is commendable, analysts warn that its implementation must avoid stifling digital innovation.

“Regulation should be inclusive, evidence-based, and adaptive,” Oyewole emphasized. “Without this balance, we risk discouraging investment in a fast-evolving digital landscape.”

Proposed Telecom Tax Reignites Industry Concerns

A major point of contention in 2025 is the reintroduction of a 5% excise duty on telecom services as contained in the Nigeria Tax Bill passed by the Senate in May. Though the levy was suspended by President Tinubu in July 2023 to prevent inflationary pressure, the new bill revives it—drawing industry-wide resistance.

Operators warn that the excise tax will raise the cost of voice and data services for subscribers, threaten digital inclusion goals, and further erode sectoral profits. ALTON revealed that telecom firms currently contend with 54 different taxes, a burden compounded by currency devaluation and rising operational costs.

“This industry cannot absorb additional taxes without consequences,” Adebayo said. “If the bill is enacted, telecom consumers will pay more, and network expansion and quality will suffer.”

Conclusion: A Digital Agenda at Crossroads

Despite early optimism, Tinubu’s tech and digital economy blueprint faces considerable hurdles. Analysts say strategic recalibration is required—particularly in affordability, regulatory alignment, and public-private collaboration—to deliver on Nigeria’s digital transformation promises.