Benin has joined a growing list of African states imposing levies for using the internet.
The government passed a decree in late August taxing its citizens for accessing the internet and social-media apps. The directive, first proposed in July, institutes a fee (link in French) of 5 CFA francs ($0.008) per megabyte consumed through services like Facebook, WhatsApp, and Twitter. It also introduces a 5% fee, on top of taxes, on texting and calls, according to advocacy group Internet Sans Frontières (ISF).
The new law has been denounced, with citizens and advocates using the hashtag #Taxepamesmo (“Don’t tax my megabytes”) to call on officials to cancel the levy. The increased fees will not only burden the poorest consumers and widen the digital divide, but they will also be “disastrous” for the nation’s nascent digital economy, says ISF’s executive director Julie Owono. A petition against the levy on Change.org has garnered nearly 7,000 signatures since it was created five days ago.
The West African nation joins an increasing number of African countries that have introduced new fees for accessing digital spaces. Last month, Zambia approved a tax on internet calls in order to protect large telcos at the expense of already squeezed citizens. In July, Uganda also introduced a tax for accessing 60 websites and social-media apps, including WhatsApp and Twitter, from mobile phones. Officials in Kampala also increased excise duty fees on mobile-money transactions from 10% to 15%, in a bid to reduce capital flight and improve the country’s tax-to-GDP ratio.
Digital-rights advocates say these measures are part of wider moves to silence critics and the vibrant socio-political, cultural, and economic conversations taking place online. The adoptions of these taxes, they say, could have a costly impact not just on democracy and social cohesion, but on economic growth, innovation, and net neutrality. Paradigm Initiative, a Nigerian company that works to advance digital rights, has said it was worried Nigeria would follow Uganda’s and Zambia’s footsteps and start levying over-the-top media services like Facebook and Telegram that deliver content on the internet.
But taxing the digital sector might have a negative impact in the long run. Research has already shown that Uganda’s ad hoc fees could cost its economy $750 million in revenue this year alone. “These governments are killing the goose that lays the golden egg,” Owono said.
Alibaba founder Jack Ma has established a new contest that will see African entrepreneurs compete for $10 million in funding, with the aim of supporting businesses that are growing the continent’s nascent digital economy.
Called the Jack Ma Foundation Netpreneur Prize, small businesses in Africa will vie for $1 million in prize money every year for the next decade, starting in 2019, a statement said. The Jack Ma Foundation will host an annual pitch competition, with all 10 finalists receiving grant funding and access to the Netpreneur community of African business leaders for mentorship and other resources.
“As a fellow entrepreneur, I understand the importance of getting support during the early days,” the Alibaba executive chairman said. “This prize demonstrates our support of a next generation of young entrepreneurs across Africa that is paving the way for a better future and impart positive change in their communities.”
While the competition will be open to entrepreneurs in all industries, the prize will focus on internet-led businesses that help advance technology and innovation in Africa. Applicants must be African nationals leading mission-driven organizations, and the 10 finalists will be selected by a team of judges from five regions representing the entire continent. Applications for the first year open in January, with the finalist pitch competition broadcast on television and online in the second half of 2019.
The prize was announced at the “Netpreneurs: The Rise of Africa’s Digital Lions” conference in Johannesburg on Wednesday, which drew 800 entrepreneurs, venture capitalists, researchers and policymakers. In addition to Ma, United Nations Conference on Trade and Development Secretary-General Mukhisa Kituyi and South African Minister of Science and Technology Mmamoloko Kubayi-Ngubane, UN Women Executive Director Phumzile Mlambo-Ngcuka and Lin Songtian, China’s ambassador to South Africa, were in attendance.
“The rise of the digital economy provides growth and opportunity to the developing world, but it is up to us to make sure no one is left behind. The work that Jack Ma and UNCTAD are doing together will help empower the emerging generation of young African business leaders to participate in and lead that growth,” Kituyi said.
Jack Ma, the Alibaba Group founder and UN Conference on Trade and Development (Unctad) special advisor, is set to speak at an event on the digital economy Wednesday (8 August) in Johannesburg.
The event — titled Netrepreneurs: The Rise of Africa’s Digital Lions — is jointly organised by Alibaba Business School, Unctad and the Jack Ma Foundation. It will be held at the Linder Auditorium. Those looking to attend the event can register here.
At the even Ma, who advises Unctad on youth entrepreneurship and small businesses, is expected to announce the launch of the Jack Ma Africa Netrepreneur Prize which aims to support exemplary young internet leaders.
Topics to be covered at the event include: challenges young entrepreneurs are facing developing new businesses, the role of the public sector in providing a conducive environment for innovation, access to capital and how the youth can be enabled to power the new economy.