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Digital Economy: How Nigeria Prepares to Enter the Trillion-dollar Blockchain Market

Anything that makes production of goods faster, better, or less expensive is considered technology by economists. To guarantee that Nigerians benefit from the potential of blockchain technology while assuring responsible use and avoiding its risks, the Federal Executive Council (FEC) has approved the “National Blockchain Policy for Nigeria.”

Global economic professionals widely accepted that technology is the key driver of economic growth of countries, regions and cities. While technological progress allows for the more efficient production of more and better goods and services, which is what prosperity depends on.
Technology can help the economy as consumers have better access to data and can hold companies to account. Similarly, technology has changed not only how we produce and connect, but also allows more humans to create and test new objects and ideas, reducing the costs and risks of innovation, and product development, also in developing countries.

Today, digital technologies have created a second economy, a virtual and autonomous one, and this is certainly true. Expert says, “the era of smart machines holds much promise. With smart policies, the future could be one of stronger and more inclusive growth.” The blockchain is an undeniably ingenious invention that has revolutionalized the Financial Technology (Fintech) Industry. Since its inception, the blockchain technology has evolved into something greater and powerful having an estimated market size of over 540 Million Dollars in 2018. Blockchain provides data integrity with a single source of truth, eliminating data duplication and increasing security. It could boost the global economy to $1.76 trillion by 2030 through raising levels of tracking, tracing and trust, a PwC report indicated.

It is undeniably true that today’s digital technologies have spawned a second economy, a virtual and independent one. “The era of smart machines holds much promise,” an expert argues. Future economic growth might be greater and more inclusive with the right policies in place. The Financial Technology (Fintech) Industry has undergone a change thanks to the undoubtedly brilliant idea known as the blockchain. The blockchain technology market is worth over $540 million dollars in 2018, having grown significantly since its start. Blockchain eliminates data duplication and boosts security by providing data integrity with a single source of truth. A PwC analysis suggested that by increasing levels of tracking, tracing, and trust, the global economy may grow to $1.76 trillion by 2030.

Nigerians’ evolving social and economic conditions

While this is happening, Nigerians can benefit from blockchain technology by mining, working for cryptocurrency firms, or taking part in crypto faucets. Bola Tinubu, the incoming president of Nigeria, published a manifesto in March 2023 that, if put into practice, will allow the country’s banking and finance industry to employ blockchain technology and cryptocurrencies. Tinubu stated in the manifesto: “We will reform the policy to encourage the prudent use of blockchain technology in banking and finance, identity management, revenue collection and use of crypto assets. We will establish an advisory committee to review SEC regulation on digital assets creating a more efficient and business-friendly regulatory framework.” Tinubu said, “We will also encourage the CBN to expand the use of our digital currency, the eNaira.” The manifesto’s release coincides with Nigerians’ increasing crypto adoption, which is among the highest in the world.

On 3rd May 2023, the Federal Executive Council (FEC) approved the national blockchain policy for Nigeria. The approval is a significant move and a step towards the country’s digital transformation, according to Isa Pantami, Minister of Communications and Digital Economy. “The policy would institutionalise blockchain technology in Nigeria and ensure its adoption in various sectors such as banking, security, education, and commerce,” he explained. He added that, “the Central Bank of Nigeria (CBN), Nigerian Communications Commission (NCC), Security and Exchange Commission (SEC), and National Universities Commission (NUC) have been directed to develop regulatory instruments within their sectors to facilitate the implementation of the policy.”

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The Federal Ministry of Communication and Digital Economy of the Federal Republic of Nigeria established the National Information Technology Development Agency (NITDA) in 2007 to implement ICT policies. According to NITDA, “this National Blockchain Policy for Nigeria has identified talent development, innovation, and adoption as the key areas to harness the potential of Blockchain Technology in Nigeria.” The Policy intends to nurture domestic talent in Blockchain solutions development, foster innovation, and catalyse the adoption and use of Blockchain Technology.

“NITDA has been at the forefront of driving and facilitating the spread and use of blockchain technology, through its various activities including capacity development, and awareness carried out during the Blockchain Day at the celebration of Digital Nigeria Day, in October 2022,” according to a news release signed by Mrs. Hadiza Umar, fnipr Head, Corporate Affairs and External Relations. Additionally, “the Agency” trained approximately 30,000 young Nigerians in the field of blockchain technology in order to create a competent and skilled workforce. This will give Nigerian youths the skills they need to use blockchain technology to create creative responses to our country’s problems.

The West African nation has joined other nations in legalizing and approving blockchain technology, including the United Kingdom, Denmark, Switzerland, Estonia, Georgia, Singapore, and the United Arab Emirates. The implementation of the National Blockchain Policy for Nigeria, according to NITDA, is envisioned to improve Transparency and Accountability in different sectors of the Digital Economy; Increase Efficiency in various adoption areas; Enhance Security in transactions; Increase Financial Inclusion in Nigeria; and Create significant job opportunities across different sectors of the Digital Economy.

Cover Image: Traffic in african megacity. Lagos, Nigeria, West Africa. Credit:peeterv | Stock Photo.

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