Nigeria is Africa’s largest economy, and home to over 200 million people, boasting one of Africa’s greatest number of young and tech-savvy people. It is, therefore, unsurprising to see an entrepreneurial country as Nigeria recording the largest Bitcoin trading volume; according to data collated from UsefulTulips.org, which gathers trading volume from the world’s leading Bitcoin peer-to-peer crypto exchanges (Paxful and LocalBitcoins).
That ascent to the pioneer crypto prominence is rooted in a sharp fall in remittances during the worst viral onslaught recorded in humanity, as Nigeria’s currency, the naira got exposed to weakened demand for its major exporting produce coupled with growing unrest among a significant number of Nigerian youths, with no jobs and little earning capacity.
In an exclusive interview, Himanshu Kumar, a top crypto expert spoke on the endless opportunities Bitcoin can offer Nigerians as regards remittances, taking a cue from the small Central American country that recently adopted the pioneer Crypto asset as a legal means for payment.
“After El Salvador adopted Bitcoin as a legal tender, now many small and developing countries are going to legalize or at least bring rules around Crypto. Using Bitcoin as a legal form of payment will empower the Nigerian people and will help them in getting money from all around the world without paying a big chunk of money to the bank. Using Bitcoin, give power back to the people, especially for a country like Nigeria, it’s highly important,” Himanshu noted.
Data retrieved from Enhancing Financial Innovation & Access, a non-profit organization funded by the UK Government’s Department for International Development (DFID) and the Bill & Melinda Gates Foundation, revealed 86 million Nigerian adults’ (80%) livelihoods were negatively affected by the pandemic in the year 2020.
Nigeria’s helmsman, President Buhari, faces an uphill task in reducing Africa’s most populated country’s alarming unemployment rate hovering at 33% as of Q4 2020; taking into account that more than 60% of Nigeria’s working-age population is younger than 34, coupled with growing insecurity partly caused by fewer available jobs and very low purchasing power among many Nigerians.
President Buhari not too long ago said, “I think we have a problem with unemployment. We have a problem of a lot of youths looking for what to eat, much less accommodation or clothes. The level of poverty is almost unimaginable.”
Nigeria’s President in a recent interview also acknowledged the Boko Haram insurgency in Northern Nigeria was largely fueled by youth unemployment and poverty.
The growing unrest in some of Nigeria’s geopolitical regions is partly due to high youth unemployment. With millions of hungry and disgruntled Nigerians increasingly becoming aggressive, it becomes imperative for President Buhari to support this disruptive technology as the modern world is driven by economic means of survival.
Despite the Central Bank’s ban on Nigeria’s financial brands from dealing with Crypto (in the face of reports that only 1.1% of the total $1 trillion global crypto transactions in 2019 were illicit), Africa’s largest oil producer reportedly has the world’s third-largest bitcoin holdings as a percentage of gross domestic product.
The Nigerian legislative chambers launched an investigation into the viability of Bitcoin but nothing positive emerged from that effort. Still, Nigerians are increasingly buying the pioneer crypto at a premium.
Data obtained from Google disclosed the $514 billion economy is the only country with a perfect score in regards to the interest of Bitcoin, further helping areas with a significant number of unbanked people.
Using local geographical metrics, Nigerian states with much lesser exposure to banking facilities when compared to Lagos, Nigeria’s major economic hub, had the highest level of interest in the flagship crypto on a state level, with Delta leading the list, followed by Anambra, Bayelsa, Ekiti, and Edo. This points to Bitcoin’s stronghold in many Nigerian states.
Juwon Adebayo, Head of Business Development FTX African Markets, highlighted some advantages the Crypto economy brings to Africa’s economic giant especially in the area of boosting employment and foreign exchange earnings, as a growing number of Nigerians work remotely for leading Crypto brands.
“The crypto industry is booming globally with a lot of millennials actively involved. Nigeria, despite not being supportive about Crypto assets, has surprisingly been at the top of the employment chart.
Following the covid19 pandemic, remote jobs have become rampant in the Nigerian workforce while the youth are at the forefront of these opportunities. This makes them earn mostly in foreign currency whilst hedging against the volatile local market,” Juwon Adebayo noted.
Nigeria stands to gain immensely from Blockchain technology with PricewaterhouseCoopers reporting the global economy stands to gain about $1.7 trillion in the next decade via the use of Blockchain technology thus creating numerous job openings.
Interestingly, news coming from Paxful, a fast-growing peer to peer Bitcoin trading platform indicates that Africa’s biggest economy is their biggest market with an impressive volume which currently stands at over $1.5 billion, and 1.5 million Nigerians using the platform. This data further buttresses Nigeria’s grip on the Crypto economy globally.
Chinedu Obidiegwu, Business Development Lead at Luno Nigeria also spoke on the socio-economic gains the crypto market brings to Africa’s most populous country.
“With record-high unemployment numbers, the emergence of the Crypto market has seen sizable Fintech and Media platforms, and more, set up shop in Nigeria, which has created jobs either locally or remotely for many Nigerians. In reality, this vast job opportunity pales in comparison to the socio-economic benefit young and old Nigerians have experienced with the ability to be part of a truly global financial system at the click of a button and earn an honest living.”
Crypto pundits further debate that Nigeria’s financial regulatory restriction on Crypto-assets by Nigeria’s Apex bank further complicates transactional and innovative processes in Africa’s largest economy because the flagship crypto still depends heavily on fiat currencies despite being virtual, from pricing its value to how its ownership is ascertained.
Bottom line
Market commentators reiterate that investments and a highly supportive policy environment in Crypto and blockchain technology would boost Nigeria’s productivity, taking to account that information and Communication Technology is one of the fastest-growing sectors of the economy. It is only too obvious that Nigeria’s digital sector remains crucial in accelerating the nation’s economic recovery from the devastating impacts of COVID19.
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Great analogy, Olu.