Source: World Bank
Nigeria has long known the importance of identification, though it has wrestled with developing a robust identity program. In 1978, the Department of National Civil Registration (DNCR) was set up within the Federal Ministry of Interior (FMI). DNCR was tasked with issuing national identity cards. The program lasted 18 months. In 2001, DNCR contracted a private partner to enrol people, and issue national identity cards, at a fiscal cost of US$236.8 million. The program ran for five years, issued national identity cards to 37.3 million people, and was shelved. The system developed was not re-used. In 2007, the government passed a law, the National Identity Management Commission (NIMC) Act, and set up NIMC as the government agency responsible for identification in Nigeria. NIMC continues to operate today.
Identity is a public good, and is necessary for modern development. In order for a government or a firm to offer services to people, it needs to know who is who. Without a reliable way of proving one’s identity, exercising basic rights, claiming entitlements, accessing a range of government services, and conducting many daily activities can be hampered. The advent of new technologies, including mobile phone, internet, social media, and digital applications, requires an electronic or digital form of identity. Digital identity serves as a “cross sector platform,” offering a unique identity for use across sectors.
Identity comes in two varieties: foundational, or a national identity; and functional, or a use-specific identity. A foundational identity explains “who you are,” and a functional identity explains “whether you are eligible for a specific service.”
Digital identity can be instrumental in hastening the pace of progress in Nigeria. The program can help improve delivery of safety net services to the poor, advance financial inclusion, support agriculture development, and strengthen electoral voting. In India, for example, the use of digital identity, as part of the country’s Aadhaar program, supported financial inclusion by helping 125 million people complete know-your-customer processes and open bank accounts in a short time span of 12 months. The program also helped improve social service delivery, by initiating direct benefits transfers for social sector schemes to Aadhaar-linked bank accounts of beneficiaries.
These applications showcase the transformative potential of identity in improving the efficiency and effectiveness of service delivery, strengthening governance, and supporting private sector development.
A Fragmented Identity Landscape
Nigeria operates a fragmented identity landscape. About 13 or more identity programs are run by different government agencies. Most identity systems are not interlinked. Most identity programs are geared towards issuing an identity card. Citizens thus have to carry multiple identity cards, for different uses. No single identity registry has reached full scale.
As the lead government agency, NIMC offers a foundation identity. Since being established in 2007, NIMC issued the first unique national identification number (NIN) in February 2012. It offered the first national electronic identity card in August 2014. To date, NIMC has registered 6.1 million people, out of 173.6 million population, or 3.5% of the population. NIMC has issued 418,000 national identity cards. Thus punctuated by a time lag, NIMC has faced early hurdles. It took over operations from the previous DNCR, downsized organization, upgraded technology systems, and tried and stopped partnerships with two private firms.
Functional identities in Nigeria have grown since before 2007. A voter registry, operated by the Independent National Election Commission (INEC), is the largest functional registry, with 69 million entries. A banker registry, partly operated by the Central Bank of Nigeria (CBN), is a newer one, and has 6.75 million entries. New registries, covering health insurance beneficiaries, and the poor and vulnerable, are expected to be developed.
Civil registry is being automated. Currently, 38–42% of births are registered in Nigeria. The government has worked to link civil registration with the national identity registry, in order to improve the integrity of information in both systems, though further work is required.
A Supportive Enabling Environment
The policy and legal environment for identification is positive. The NIMC Act was passed in 2007 for the setup of NIMC as the lead government agency. Several additional Acts support the development of civil registry and voter registry, amongst others.
With the growth of digital applications and electronic data, legal safeguards are necessary for privacy and security of information. Draft bills are being reviewed by the country’s Parliament. The reliability and availability of electric power and high-speed internet are two additional challenges for digital identity in Nigeria, and cause high annual operating costs.
The duplication of work due to parallel identity registries in Nigeria creates significant inefficiencies. First, government agencies duplicate biometric enrolment, to uniquely identify each individual. Second, government agencies duplicate fiscal spending. Third, without a modern, integrated identity ecosystem, delivery and management of services, both public and private, are affected. Finally, citizens and residents are inconvenienced to face multiple biometric enrolments, and carry multiple identity cards.
An illustrative fiscal analysis can show the enormity of fiscal impact due to the inefficiency in the identity ecosystem of Nigeria. The analysis uses a given methodology and assumptions, including a projected unit cost of US$5.0 per person for identity lifecycle, since actual financial data on identity systems in Nigeria is not readily available. Based on the analysis, the total fiscal impact of identity programs in Nigeria is US$4.3 billion, of which US$1.2 billion are spent, and another US$3.1 billion will need to be spent, following current trajectory.
International experience puts a lower threshold on the unit cost of identity per person. The unit cost is an important measure to benchmark the efficiency of an identity program, whether foundational or functional. In India, the government has spent US$2.0 per person for a lifetime of national identity. At this rate, the government is spending US$2.5 billion to set up a national identity system to serve 1.25 billion people. The program is already showing results. Launched 4.5 years ago, India’s program has completed 840 million enrolments, or roughly 67% of the population.
Scale up, Integration, and Low Costs
A rapid scale-up of national identity, integration of parallel identity systems, and low cost of identity programs are key challenges for the identity ecosystem of Nigeria.
To obtain full benefits from digital identity, the federal government needs to rapidly scale up its national identity program. The objective should be to have an electronic registry with 173.6 million people, covering the total population, on a fast timetable. NIMC will need to scale up enrolments at a rapid pace in order to realize this objective.
Integration of identity systems is necessary. Though a Harmonization Committee was conceived in 2006 and had spearheaded the NIMC Act in 2007, harmonization remains unrealized. In fact, the number of parallel identity systems has grown. A prerequisite for integration is a critical volume of entries in the national identity registry, and an online identity verification facility. Both of these are works in progress. The government may consider a simplified approach to integration, improving speed of execution, and allowing government agencies to serve their beneficiary populations with a unique ID.
Lowering the cost of each identity program, both foundational and functional, will help make digital identity a reality in Nigeria.
The government has attempted forging partnerships for its national identity program, but has faced challenges. Given the magnitude of task of developing digital identity in Nigeria, partnerships may be necessary for rapid scale-up, integration, and low cost, and may benefit from past experiences.
The government may consider further sharpening its vision for identification in Nigeria, keeping in view objectives of rapid scale up, integration, and low cost of development. The vision would prompt strengthening the enabling environment, with conducive policy and laws, including for information security and privacy, and with an upgrade of technology and systems to scale up digital identity. Capacity building of key institutions, including NIMC, with an updated business model, public-private partnerships, and expedited enrolments would be important. A tactical look at harmonization, with a view on linking key user agencies, and with civil registration, would help foster a holistic ecosystem.
Based on a refined vision, an updated policy and legal environment, and an optimized business model of identification, the government should prioritize mobilizing sufficient resources to fund identification in Nigeria. Funding may be sourced from fiscal budget, donors, or private sector partnerships.
Digital identity can be a game-changer for Nigeria’s economic, social, and political development, and in helping deliver social benefits to the poor. A focused approach to driving the identity agenda of Nigeria will help trigger enormous benefits, and help improve management and delivery of services.
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