In a recent development, the House of Representatives in Nigeria has adopted a motion urging the Central Bank of Nigeria (CBN) to suspend the implementation of the social media Know-Your-Customer (KYC) requirement. The motion came as a response to concerns raised by lawmakers regarding the potential impact of this directive on Nigerian citizens. This article delves into the details of the motion and the arguments put forth by the legislators.
The Need for Suspension
The lawmakers have expressed their belief that the social media KYC requirement places undue burden on the Nigerian populace, especially during a challenging period. Kelechi Nwogu, a representative from Rivers state, emphasized that the directive is unnecessary and may infringe upon the privacy rights guaranteed by section 37 of the Nigerian constitution. Nwogu argues that since financial institutions already have access to various personal information, such as names, telephone numbers, passport photographs, emails, national identification numbers, and biometric verification numbers, the collection of social media handles is redundant.
Purpose of the Social Media KYC Requirement
The CBN introduced the Customers Due Diligence Regulations in June, which included the social media KYC requirement. The objective behind this directive, as stated by the CBN, is to enhance the Nigerian financial sector's ability to combat money laundering, terrorism financing, and proliferation financing. By collecting and verifying customers' social media handles, the CBN aims to strengthen its surveillance and monitoring capabilities.
Alternative Means of Monitoring
Contrary to the CBN's position, lawmakers argue that the Nigeria Police Force, Nigeria Financial Intelligence Unit, the Economic and Financial Crimes Commission, and other intelligence and crime tracking agencies are better equipped to monitor money laundering and terrorism financing activities. They believe that the additional collection of social media handles is unnecessary and may have unintended negative consequences.
Impact on Unbanked Nigerians
Concerns have been raised about the potential exclusion of a significant number of Nigerians, particularly those residing in rural areas with limited access to the internet. As of January 2023, only 14% of the Nigerian population actively used social media platforms. Lawmaker Kelechi Nwogu highlights the possible repercussions of the directive, stating that individuals who do not have a presence on social media but engage in substantial business and trade activities may be forced to join social media platforms or risk being excluded from the formal banking system.
Opposition and Civil Society Voices
The directive has also faced opposition from civil society organizations. SERAP (Social Economic Rights and Accountability Project) raised concerns about the infringement on freedom of expression and privacy rights. Kolawole Oluwadare, the deputy director of SERAP, argues that there are already existing means of identification that banks and financial institutions require from customers, rendering the social media KYC requirement redundant.
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