Nigeria wants to power its ‘new’ digital economy using blockchain

Nigeria wants to become Africa’s digital economy capital by 2023,  according to the country’s Minister of Communication and Digital Economy, Dr. Isa Ali Pantami. The government of Nigeria disclosed its plans of transitioning the country into a new, effective digital economy through the adoption of the distributed ledger, blockchain technology. This was confirmed in a recently released draft from the National Information Technology Development Agency (NITDA) titled “National Blockchain Adoption Strategy”. 

The document contains a roadmap for the country’s general adoption of digital technologies, particularly the blockchain network which would be used in facilitating crypto trades across the country and ultimately bring the country into the long awaited digital economy.

The Nigerian government had earlier voiced skepticisms concerning the appeal of digital currencies and the underlying blockchain technology and have attempted to place a ban on it. 

Over the years, the country’s SEC and other financial regulatory bodies, have constantly warned citizens about the inherent risks of investing in digital assets. At some point, digital currencies were declared as non-legal tender. 

However, the country began to experience a gradual change in stance from the government and financial regulators. In 2019, Nigeria saw a varying degree of acceptance in the aspect of digital technologies and assets, some of which include the fintech report. This report comprises recommendations with respect to digital currency. Closely followed by this, came a call for a legal framework to regulate the use of digital assets. This led to the creation of a committee which is aimed at setting up a proper regulatory framework for digital assets. 

In September 2020, regulators demonstrated a bigger interest in legislating the crypto space. This was confirmed in an SEC statement that was released. The statement documents outlines on how crypto assets would be regulated based on how they are classified. 

The national blockchain adoption strategy.

Digital currencies have seen widespread recognition as many have realized the variety of advantages connected with its application, which cuts across operation cost reductions to the improvement in the efficiency of business processes. 

As part of an effort to move Nigeria away from its huge economic dependence on the oil and gas sector, and into a simpler economy steered by digital technologies, President Muhammadu Buhari has intensified interests in regulating the blockchain technology. The NITDA was put in place to facilitate the government’s statutory obligations towards these emerging techs, with a major role of coming up with corresponding strategies for ensuring a healthy ecosystem. 

The federal government aims to provide the trust necessary for the achievement of an efficient, safe, and most importantly, productive digital Nigeria. In light of this, the government has shown a high level of interest in creating and enforcing regulations to direct the adoption and use of digital technologies. This would ensure fair markets as well as the protection of citizens while letting innovations and businesses flourish. 

The primary objective of the Nigerian Blockchain Adoption Strategy is to identify and make good use of the opportunities provided by blockchain technology, in order to strengthen the growth of the country’s economy. 

The draft emphasized the several key areas that would be focused on. The areas include regulations, skills and capacity building, innovation, investment, collaboration, and internal competitiveness, with more emphasis on the regulatory approach which promises to be one that encourages innovation and development. 

Objectives and incentives

The proposed strategy for the adoption of blockchain, is built on the following 6 key initiatives developed from the 8 pillars of Nigeria’s Digital Economy Policy And Strategy (2020-2030)

  • Establishing the Nigerian Blockchain Consortium
  • Regulation and legal framework
  • Provision of a national Digital Identity framework
  • Creation of blockchain business incentives
  • Promoting Blockchain digital literacy and awareness
  • Establishment of a National blockchain sandbox. 

Also, the following 5 strategic objectives were outlined in the document.

  • Establishment of a blockchain regulatory oversight
  • Stimulating innovations and entrepreneurship
  • Building security, trust, and transparency in value chain
  • Enabling better investment opportunities and job creation
  • Governance. 

“The goal of this strategy is to key into the Economic Recovery and Growth Plan of the Federal Government by increasing the contribution of ICT to the Gross Domestic Product (GDP).”

The strategy framework aims to propel the adoption of blockchain technology in public administrations across the country, while converting the economy into a digital productive one. As a result of this, we hope to see improvement in efficiency, transparency, governance as well as new job opportunities. 

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