Several Nigerian banks reported strong profit growth in 2024, which is significantly benefiting the country’s technology ecosystem as their contributions to the Nigeria Information Technology Development Fund rose by 57% year-on-year, reaching N34.3 billion.
The contributions from Zenith Bank Plc, Guaranty Trust Holding Company Plc, United Bank for Africa Plc, Fidelity Bank Plc, Stanbic IBTC Holdings Plc, and Wema Bank Plc showed a notable increase compared to the N21.8 billion contributed by these six banks in 2023.
Despite the government’s ongoing concerns about companies not adhering to the mandatory 1% profit contribution for developing the Nigerian tech ecosystem, the six banks’ remittance for 2024 marks the highest contribution to the Fund to date.
Data from the banks’ 2023 results revealed that all banks in Nigeria contributed N33.7 billion to the Fund. For 2024, the N34.3 billion contributed so far only includes banks that have released their results, excluding major players like FBN Holdings and Access Holdings, which were among the top contributors in 2023.
In 2022, the Federal Inland Revenue Service, responsible for collecting the tax on behalf of the National Information Technology Development Agency, reported a total of N22.5 billion collected as the NITDEF levy, marking the highest annual collection at that time.
The banks’ payments reflect their profits for the year, with the banks reporting the highest profits making the largest contributions. Zenith Bank, which posted a profit before tax of N1.3 trillion for 2024, contributed N11.4 billion to the tech fund, marking a 70% increase compared to its N6.7 billion contribution in 2023.
Similarly, GTCO, with a profit before tax of N1.26 trillion, paid N10 billion in IT levy, up from N4.7 billion in the previous year.
United Bank for Africa, with a profit before tax of N803.7 billion, contributed N4.67 billion to the information technology levy in 2024, which is lower than the N6.7 billion it contributed to the Fund in 2023.
Similarly, Stanbic IBTC paid N3.2 billion into the tech fund from its pre-tax profit of N303.7 billion, compared to the N1.8 billion it contributed in 2023.
Fidelity Bank, which reported a profit before tax of N385.2 billion for 2024, contributed N3.9 billion to the tech fund.
Wema Bank, with a pre-tax profit of N102.51 billion in 2024, paid N1 billion into the tech development fund.
NITDA Act of 2007, which established the NITDEF, mandates companies operating in Nigeria with an annual turnover of N100 million or more to pay 1% of their annual profit before tax to the fund.
According to the third schedule of the Act, companies required to pay the levy include GSM service providers, telecommunications companies, cyber companies, and internet service providers.
It also includes non-IT companies such as pension managers and pension-related companies; Banks and other Financial Institutions; and Insurance Companies.
The Act also stipulates punishment in the case of default, stating “Any company, agency or organisation that fails within two months after a demand note, to pay the levy or the import duty imposed under section 11 of this Act commits an offence and is liable on conviction to a fine of not less than N 1,000,000.00 and the Chief Executive Officer of the company, Agency or Organisation shall be liable to be prosecuted and punished for the offence in like manner as if he had himself committed the offence, unless he proves that the act or omission constituting the offence took place without his knowledge, consent or connivance”.
According to the Director-General of NITDA, Kashifu Inuwa, NITDEF is essential to the Agency’s success in fulfilling its mandate to drive technology development across Nigeria.
He stated that the fund is crucial to the ongoing implementation of the National Digital Skills Strategy, which aims to ensure that 95% of Nigerians become digitally literate by 2030.
