A Thousand Words Cannot Carry A Single Basket Of Yams- African Proverb
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By Folarinwa Aluko
Government is judged by its actions, not its declarations. A government cannot claim to promote innovation merely by publishing a policy that promises to do so. The test is whether the Policy understands the conditions that drive innovation, identifies the obstacles that prevent it, and takes decisions that remove those obstacles.
A bank does not lend because a policy says an asset has value. An investor does not commit capital because a committee has been inaugurated. A creator does not earn more because a strategy promises commercialization. Nigeria’s National Intellectual Property Policy and Strategy (NIPPS) misreads why banks lend, mistakes frameworks for engines of commerce, ignores what government’s own conduct does to the value of ideas, and promises action its implementers cannot take.
Intellectual property is not an industry in the way manufacturing, mining or agriculture are industries. It cuts across industries and enables businesses to create, protect and exploit value. IP rights are legal tools that acquire value only through the commerce around them.
A trademark for a business nobody patronizes is worth little; a patent covering an invention that cannot generate commercial returns will be worth little. NIPPS starts at the wrong end, with the registries, agencies and committees that administer rights rather than the markets that give rights value.
Nowhere is this clearer than in finance. The Policy proposes to encourage financial institutions to recognize intellectual property as a valuable asset and accept it as collateral. This assumes that banks’ failure to recognize IP is a significant constraint on IP-backed lending.
Yet banks already understand intangible assets. They routinely accept shares as security, because shares carry value. If Coca-Cola sought financing secured by its trademark, no Nigerian bank would need a government policy to explain that trademarks can have value. The question would be whether the company’s cash flows, the enforceability of its rights and the prospects of recovery on default justified the loan.
If Davido, Wizkid or 2Baba offered their music catalogue as security, the relevant question would be whether the income, ownership and enforceability of the rights justified the transaction, not whether a policy had instructed banks to recognize IP.
Even real estate faces the same test. A bank may refuse to lend against real estate because its valuation is uncertain, the resale market is thin or enforcement is expensive. The same considerations apply to intellectual property. These are not reasons to treat IP as a special category of collateral requiring a policy declaration. They are ordinary commercial considerations that determine whether an asset provides adequate security for a loan. Value drives recognition, not the other way round.
Nor does the law stand in the way. Security is a matter of contract. No law stops a bank from taking IP as security, and the law already makes it easier. The Secured Transactions in Movable Assets Act 2017 (STMA) was passed to widen access to credit for small businesses by making it simpler and safer to take security over movable assets, through clear rules on creation, perfection, priority and enforcement and a public collateral registry. Section 63 of the STMA defines a movable asset as tangible and intangible property other than real property.
Yet the Policy treats IP as a category of collateral waiting to be discovered by financial institutions, rather than asking what makes particular rights valuable, bankable and capable of being realized on default. Banks do not need a policy to permit a transaction that the law already allows.
The same error drives the commercialization agenda. NIPPS proposes national commercialization frameworks and guidelines, as though the missing ingredient were an organizing structure. Inventions stay on the shelf because nobody wants them, because they cost too much to make, because ownership is disputed or because the inventor lacks capital. Building Technology Transfer Offices across Nigeria will not create a buyer, lower a production cost, settle a dispute or supply capital. Nor will it reach most of Nigeria’s innovators, who never pass through a university.
Commercialization is not confined to transferring publicly funded research into the market. Much innovation happens in ordinary businesses that adapt products, write software, build brands, improve processes and accumulate know-how, often without registering any IP right. Paystack, Flutterwave and Moniepoint did not wait for a national framework. They built services around customer needs, raised capital and moved faster than regulation. So do the software firms, fashion labels, film studios and workshops that never file a patent. Their problems are finance, contracts and market access.
Worse, government often stands between these businesses and their markets. Creators depend on digital platforms for audiences, distribution and advertising income. The shocking $220 million fine the Federal Competition and Consumer Protection Commission imposed on Meta and WhatsApp is a case in point.
Costs imposed on platforms may be passed on to users, businesses and creators, or otherwise restrict the opportunities available to them. A government serious about creative commerce would count what such action costs the creators who rely on those platforms. Government cannot repair with one hand what it damages with the other.
This is not isolated. The Federal Government’s common response to new media and new technology has too often been to control, restrict and extract revenue. From crypto to social media, its actions frequently contradict its rhetoric.
Across sectors, Nigerian businesses face fines, levies and taxes that serve the treasury more than the market, alongside barriers to entry high enough to keep newcomers out. The same question hangs over every one of them: does it protect the public, or merely raise the price of entering a market, testing an idea or reaching a customer?
The surest path to innovation is for government to take its boot off the necks of entrepreneurs. That means regulating for quality, not for revenue. Reducing unnecessary regulation and taxation can do more for innovation than announcing another committee or framework.
The recent reduction in automobile import duties shows how changing a government-imposed cost can move market prices and commercial activity. Where government removes obstacles to entry, investment and exchange, businesses have greater room to experiment, compete and respond to demand.
A policy that promises to promote the commercial exploitation of intellectual property cannot be credible while other government decisions make it harder to create, distribute and earn from it. Publishing a promise to support creators cannot resolve that contradiction. The Policy should be judged against actual government decisions, their effects on businesses and creators, and their consistency with its stated commitments.
Even where the Policy is right, it adds little. Many of its recommendations restate familiar administrative obligations: modernize registries, enforce rights more effectively, examine patents properly, coordinate better and raise awareness. Existing laws and sound administrative practice already require much of this. If institutions fail to discharge their existing duties, another policy document will not make them do so.
And where the Policy would matter, it has no power. The flaw is constitutional. A policy binds neither the legislature nor the states. Only the National Assembly can amend the Patents and Designs Act and the Trade Marks Act, and only it can fund the agencies. The Policy can only suggest that “engaging the appropriate committee of the National Assembly… should be explored.” That is not a strategy.
The states are equally beyond its reach. The Policy admits the “up-to-bottom approach” has failed, then asks Federal Agencies to plan “the role of sub-nationals.” States are not federal departments, and much of the regulation creators face come from them. The Policy diagnoses top-down failure and prescribes more of it.
A credible IP policy should address demonstrable constraints, distinguish problems requiring government intervention from those best addressed by the market, and focus public action on the conditions that enable businesses and creators to create and exploit value. Its success should be measured by changes in those conditions and in commercial outcomes, not by the number of committees inaugurated, frameworks published or activities completed.
Nobody can legislate prosperity or declare commercialization into existence. No intellectual property policy, however ambitious, can substitute for the laws, decisions, incentives and commercial conditions that enable people to create value.
Folarinwa Aluko is an IP Lawyer and Partner in the Firm of Trumann Rockwood Solicitors.
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