Nigeria projects to use blockchain technology to generate up to $10 billion in revenue by 2030. This was disclosed in a statement by Mr Kashifu Inuwa, Director General of the National Information Technology Development Agency (NITDA).
Inuwa, at a meeting of stakeholders in Abuja to review the National Blockchain Adoption Strategy Framework, identified blockchain technology as a major contributor to the developing economies world wide. He pointed that Nigeria had to exploit the technology to boost the economy of the country.
The NITDA Director General said that With Nigeria's youthful population which mainly is digitally inclined, and with the country's population in Africa, the country looks to get at least around 6 to 10 billion dollars by the year 2030.
He cited a recent PwC report which projected that over the next decade, blockchain would contribute $1.76 trillion to the global Gross Domestic Product (GDP).
In line with the report, he mentioned that Nigeria should copy the adoption of blockchain by China which could see the world’s largest economy generate almost half a trillion dollars ($460 billion) in revenue by 2030.
“We want Nigeria to be strategically placed to capture value from this economic potential of blockchain,” he said.
Presently, there is no regulation or legal framework guiding the adoption of blockchain technology in Nigeria. Blockchain-based starting ups, in the absence of government regularization, thus continues to increase in the country, particularly in the fintech sector.
Blockchain Companies are Thriving.
In Africa’s, Nigeria is the largest payments and blockchain-based financial services provider, with over 200 fintech’s, which is about 50% of over 400 active fintech companies across Africa.
Between 2014 and 2019, Nigerian fintech, according to McKinsey, raised over half a billion dollars ($600 million) in funding. In just 2019, Nigerian fintechs secured up to $122 million – 25% of the $491.6 million raised by African tech startups. Only Kenya attracted more funding, raising $149 million.
Nigeria currently leads Africa in the volume of peer to peer bitcoin transactions and cryptocurrency has been the major line of blockchain application in the country. Following Nigeria in this lead are South Africa, Kenya and Ghana.
Nigeria traded P2P volumes worth about $32.3million in October. More than 240% higher than South Africa’s $9.3 million. Over 34 cryptocurrency startups operate in Nigeria’s tech capital, Lagos. Nigeria was ranked by Chainalysis’ 2020 Global Crypto Adoption report as the 8th country with the highest adoption of cryptocurrency in the world.
Blockchain companies in Nigeria are progressing to a large extent without regulation of their affairs by any centralized authority, but this atmosphere might be about to change.
Nigeria Planning to Regulate Blockchain Platforms
The move by NITDA to push for adopting blockchain in a large scale in Nigeria implies that the technology will therefore be subject to regulatory guidelines to oversee its development and application.
A National Blockchain Adoption Strategy Framework was drafted in October by NITDA, the Federal Ministry of Communications and Digital Economy and the Federal Government.
A regulatory/legal framework issued by the government has become an important factor to guide and determine the successful adoption of blockchain technology in both the public and private sector.
National Blockchain Adoption Strategy (Proposed draft)
A regulatory scheme was called for by NITDA to govern and regulate the adoption of blockchain across all sectors of the country's economy. With the implementation of this scheme, all companies providing services that are blockchain related would cease to operate independently.
This simply means that taxes will be imposed on companies using the technology by the government regulator, and their activities would also be kept in close check.
Recall that the Securities and Exchange Commission (SEC) in September, proposed guidelines for regulating crypto and blockchain-based digital assets offerings in the country.
As part of the guidelines, all crypto assets and tokens classified as commodities and securities would be subject to regulations from SEC.
An initial assessment is required to be filed for by all issuers or operators of these assets. Filing fee is N10,000 and a percentage registration fee would be charged by the commission depending on the company’s classification.
It's obviously no coincidence that both the SEC and NITDA are focused on blockchain services and it appears to be a part of the government’s plan to obtain value from blockchain.