FEC approves use of blockchain in Nigeria
Nigeria's federal executive council has approved the national policy on blockchain. Through the policy, the country will develop regulatory framework to govern the adoption of the technology.
The Nigerian government has approved the National Policy on Blockchain, according to Tolu Ogunlesi, a media aide to the country's president.
In 2020, the National Information Technology Development Agency (NITDA) stated that through its National Blockchain Adoption, Nigeria plans to capture a market share of about $10 billion by 2025.
A draft of the strategy which was released in October 2020 stated that blockchain and decentralized ledger technology (DLT) would "facilitate the development of the Nigerian digital economy".
Citing a study by PricewaterhouseCoopers (PwC), which predicted that blockchain technology — through its wide range of use cases — would potentially add $1.76 trillion to the global gross domestic product in the next 7 years, making it 1.4% of the global GDP in 2030. NITDA's Director-General, Kashifu Inuwa stated that Nigeria could incorporate the technology through its provincial services, payment services, digital identity, customer engagement, and contract and dispute resolution applications.
NITDA's blockchain adoption strategy is built on six initiatives:
- Establishment of Nigeria Blockchain Consortium.
- Strengthening of the Regulatory and legal framework.
- Focus on the provision of National Digital Identity.
- Promotion of Blockchain digital literacy and awareness.
- Creation of Blockchain business incentive programmes.
- Establishment of a national blockchain sandbox for proof of concepts and pilot implementation
“Through the approval of the National Blockchain Adoption policy, Nigeria is positioning itself as a nation significantly ahead of the curve - supporting further blockchain innovation, user protection, security and economic competitiveness in the long term. While still in the early stages, we are pleased to see this development as it will aid clarity, trust and confidence in the ecosystem.
We believe that growth in blockchain technology is set to become a key differentiator for economies and a key measure of international competitiveness in the next decade for attracting foreign direct investment, cultivating innovation and creating jobs. As such, this is a welcome development and a significant milestone for the blockchain industry in Nigeria.
We commend the all-encompassing approach laid out in the reviewed policy document based on the six key initiatives,” says Binance West & East Africa Director Nadeem Anjarwalla.
Last year, NITDA in collaboration with Domineum Blockchain Solutions launched a Blockchain Scholarship, 2022 Scheme, aimed at training 30,000 Nigerians on blockchain technology to develop career skillsets in emerging technologies.
Nigeria Export Processing Zones Authority (NEPZA) disclosed that it is in talks with Binance aimed at establishing a digital economic zone that will help entrepreneurs fast-track blockchain technology in the West African nation.
The partnership aims to build a digital hub that is similar to the Dubai virtual free, the report disclosed. Free trade zones attract zero per cent tax rates, preferential customs duty rates and 100% import and export tax exemption that helps improve international businesses.
"Our goal is to engender a flourishing virtual free zone to take advantage of a near trillion dollar virtual economy in blockchains and digital economy," Adesoji Adesugba, NEPZA's managing director said. ex-Flutterwave and Andela CEO, Iyin Aboyeji's latest initiative, Talent City is also involved in the partnership.
Blockchain is not a new technology to the Nigerian government. For instance, the Central Bank of Nigeria (CBN) used a Hyperledger Fabric Blockchain to power the nation's digital currency—eNaira.
Despite this new policy, transactions using cryptocurrency remain illegal in the country. However, Zainab Ahmed, Nigeria's minister of finance previously disclosed that there is a provision to tax cryptocurrency and other digital assets in the latest finance bill.
President-elect Tinubu and blockchain advocacy
During his campaign, President-Elect Bola Tinubu said his administration will encourage the use of blockchain technology and cryptocurrencies in Nigeria's finance and banking sector.
"We will reform government policy to encourage the prudent use of blockchain technology in finance and banking, identity management, revenue collection, and the use of crypto assets. As part of our reforms, we will establish an advisory committee to review the existing regulatory environment governing blockchain technology and virtual asset services and, where necessary, suggest changes create a more efficient and business-friendly regulatory framework," he said in his manifesto.
With the approval of this policy, Tinubu's blockchain ambitions will find less huddles.