A Critique of Nigeria's Blockchain Policy

@penworth

A seasoned blockchain journalist & consultant keenly interested in crypto educatio...

Nigeria's outgoing president Muhammadu Buhari has recently approved a national policy on blockchain technology. The policy is purportedly anchored on the country’s readiness to domesticate the new technology.

However, the ban on cryptocurrency is overshadowing its prospects and putting it to the test.

The National Information Technology Development Agency (NITDA), a parastatal of the country's Ministry of Communication and Digital Economy, was majorly behind the move to get the outgoing government’s approval for a policy that is apparently seeking to make Nigeria a leading blockchain hub in Africa.

The recent approval presents an opportune time to examine the West African country’s ban on cryptocurrencies and the feasibility of blockchain adoption.

In 2021, the Central Bank of Nigeria, issued a directive to all commercial banks across the country, asking them to refrain from facilitating all crypto-related transactions. This was the first major blow to cryptocurrency which was meant to suck out its growing popularity among its own citizens.

The consequence of the ban came too quickly. Indigenous crypto companies such as Boundless Pay and Patricia left the country, and their exit brought about what can be described as the country’s first crypto capital flight.

The existing ban on cryptocurrency and the launching of its own CBDC has been Nigeria's combative measures against the growing influence of cryptocurrency in its banking sector.

Although the ban and the aggressive promotion of the country's CBDC have failed to yield the desired result, they seem to have canceled cryptocurrency effectively.

Like most countries, Nigeria's ban on cryptocurrency is a failed attempt to stop cryptocurrency at the source.

The indubitable proof of its failure is the fact that, despite the ban, Nigeria went on to become one of the countries with the highest number of Bitcoin traders in the world – much to the vast astonishment of the policymakers.

But What Has Suddenly Changed?

This is the question on my lips. I can imagine a plethora of crypto-savvy Nigerians asking the same question. It’s only appropriate to ask why the outgoing government approved a policy recognizing blockchain technology when the ban on cryptocurrency, its most popular use case, is still effective.

Can Nigeria outshine places like China, the USA, and the EU in the implementation of this new technology?

How does one expect a technology of this magnitude to thrive at different levels of government in a country where innovation hardly thrives?

A Premature Move

The move to adopt blockchain is premature at best. The current political dispensation is so steeped in corruption that matters of technology, innovation, and science are the least of its concerns.

In Nigeria, politicians are more concerned about winning elections than improving the lives of their fellow citizens through ambitious developmental projects.

Where Is the Sincerity of Purpose?

The policy can also be condemned as lacking a sincerity of purpose because its implementation strategy is too good to be true. The UK has taken a flexible and balanced approach as far as blockchain adoption is concerned.

But like Nigeria, it has no popular policy showing its commitment to full-scale adoption.

Most countries are guilty of this recalcitrancy, which partly explains why other use cases for blockchain are still largely in their THEORETICAL FORM and have no practical implications or yielded results--at least for now!

Can Nigeria Spur Blockchain Revolution in Africa?

If the Nigerian policymakers, for example, can borrow a chapter from Switzerland where Uport is facilitating blockchain-based voter registration, they can leverage blockchain's potential to combat fraudulent voter registration that has continued to undermine its democracy.

But the outcome of its recent presidential election has clearly shown that the most powerful technology does not stand a chance--at least for now!

Although the recent policy document tried to sell Nigeria to the world as a nation that prioritizes the incubation of emerging technologies, the reality is that it currently lacks the ambition to outgrow its competence and mediocrity.

As Africa's biggest growth market, the country has the potential to tap into blockchain to accelerate its digital economy.

But any policy purporting to incubate blockchain technology must address the pain points that arise from its implementation.

In other words, the willingness to leverage blockchain is never enough. It must be followed by the capability to tackle the challenges facing its implementation.

Does Nigeria have the ability to domesticate blockchain technology without first undergoing a massive cultural transformation? How many more ambitious technological projects will die on arrival?

How then can anyone convince me that can upend our ‘normals’ can actually work in a country where doing things the old conservative way is very much the norm?

Is Adoption Good News?

When it comes to blockchain adoption, we see a mixture of good and bad news. The good news is that the blockchain, unlike other emerging technologies like AI and robotics, is cost-effective.

No single nation needs to expend billions of dollars to create a blockchain industry as its entry barriers are extremely low.

On the other hand, the bad news is that blockchain faces several implementation challenges ranging from value shifts and regulation barriers to the lack of awareness.

Unless these issues are resolved, blockchain technology will remain viable only on paper and will have no real use outside of cryptocurrency.

Conclusion

While the policy is commendable in part, its failure is that the policymakers refused, by design, to take cognizance of cryptocurrency, which is, today, the most widely recognized use case for blockchains.

More than anything, the haste to join the league of progressive nations is a good thing. The problem with this is that it's so premature as blockchain use cases in other areas (outside of cryptocurrency) are in their infancy or have not gained a viable or recognizable status across the world.