Happy New Year: Securing Digital Nigeria through Blockchain Technology and Innovations

From the SiBAN President’s Desk, January 2021

When you have a country such as Nigeria with a population of over 200 million people with a median age of 18.4, the future is not what you want to play with, right? Well, if Nigeria’s present realities and general approach to growth and development are anything to go by, it would seem that we have been playing with the future. Nigeria may be the 26th biggest economy in the world by GDP, but we have failed to make the numbers count for the average Nigerian. 

Nigeria is failing in citizenship empowerment. And this is a serious cause for concern. Citizenship empowerment is not only about the government engaging citizens about its plans, policies, and programs. It is also about building capabilities, providing opportunities, and ensuring access across fields and markets, thus helping the citizens secure their future in the global economy. Beyond civil rights and political participation, citizenship empowerment includes digital inclusion and financial inclusion. It impacts on everyday quality of life. But we rarely have conversations around citizenship empowerment in Nigeria. It is no surprise. Nigeria suffers decades-long disconnection between the country’s relative economic growth and economic development. This is not sustainable.

Nigeria’s present state of economic growth and development is unacceptable. We must change our story.

Nigeria is the largest economy in Africa by GDP, but it is also the poverty capital of the world. This paradox is not acceptable.

Social indicators in health as well as education remain weak in Nigeria. In the last 5 years, Nigeria’s unemployment rate has more than tripled (27.1%) and standard of living is ever disturbing. According to the Nigeria Living Standards Survey (NLSS) 2018–2019 by the Nigeria Bureau of Statistics (NBS), the total dependency (youth) ratio per working-age person in Nigeria is estimated at 0.97. In other words, for every 100 working-age Nigerian, about 97 persons are dependents! With such alarming numbers, it shouldn’t be much news that Nigeria overtook India as the poverty capital of the world after about 86.9 million Nigerians fell into severe poverty in 2020. 

However negative the impact of Covid-19 and its consequent economic lockdowns on the Nigerian economy in 2020, Nigeria’s management of its own economic and socio-political affairs has been rather endemic. Sometimes reactive, it lacks imagination. And a country without imagination cannot grow beyond its realities. Instead, largely defined by its realities, such a country would continue to hold on to the past with a stubborn grip on straws and twigs rather than embracing lasting and sustainable change and innovation. It is troubling. This is more so when one considers that in the time of economic growth Nigeria could not lift its up to 89.6 million people out of severe poverty. How then can Nigeria do so in the time of decline in economic growth? Propaganda, if attempted, has never put food on the table, except we are merely here to party politically.

And except—like China—you are harnessing internal resources and building internally within your Walls of China, restrictive policies have never built any economy. At best, restrictive policies secure what you are building or have built. What is Nigeria building and where are the industries?, Nigerians  ask. The country badly needs an expansionary agenda. Achieving this will require more than fiscal and monetary policy measures from the Central Bank of Nigeria (CBN). Our challenges are now beyond central banking.

This is the time for Nigeria to harness all its resources—human and capital—to rejig the economy. Budget speeches and New Year Day addresses will not do it. We must be collaborative, deliberate, focused, and vigorous.

The Nigeria government will need to be more intentional about the growth and development of this great country.

Being more intentional about the country’s development will require planning, strategies, and structures. We cannot continue with business as usual. It will require a serious engagement of relevant ministries, departments, and agencies (MDAs) and particularly regulators as well as the private sector. Politics does not grow trees. Propaganda does not produce water. They will certainly not grow or water the Nigerian economy, but only steal our collective dreams and future as a nation while we score political points but national own goals.

First, Nigeria needs to compete globally based on its comparative advantage. Just as Indonesia, the world’s 16th largest economy, with a GDP of $1.12 trillion as of 2019 is the largest economy in Southeast Asia, so is Nigeria the largest economy in Africa. Similarly, Indonesia’s economy is largely driven by commodity export industries, including petroleum products and agricultural commodities such as rubber and palm oil for industrial use. There is no reason why Nigeria cannot be as globally competitive as Indonesia in less than a decade if we fixed our infrastructural deficit, managed our fiscal and monetary policies better, get rid of the glorious waste in government, check governmental corruption, and adhere to the rule of law. With Nigeria’s increasing national budget deficit and debt burden, an institutional cap of 3% may also be healthier for the country.

Second, Nigeria needs to be intentional about opening new windows of opportunities, not waiting for opportunities. Opportunities abound, but it is the windows to them that we have failed to either open or keep open as what should be not only the biggest market for investment in Africa but also with a competitive business environment and friendly investment climate. Nigeria is blessed with natural resources, including oil and agricultural commodities, we cannot continue to sleep on it, especially on oil. Like India, Nigeria must invest big in technological know-how and increasingly become a major exporter of technology services, starting in Africa. Particularly with the historic one-market-driven African Continental Free Trade Agreement (AfCFTA) coming into effect on 1 January 2021, Nigeria cannot afford to be less ambitious. And like India, Nigeria needs to massively invest in the infrastructure that our growing service sectors need to become globally competitive and thrive. 

To open new windows of opportunity for Nigeria’s growth and development, regulators must become chief innovators, not just licensors and enforcers.

This is where critical regulators such as the Central Bank of Nigeria (CBN), Nigerian Communications Commission (NCC), Nigerian Stock Exchange (NSE), the Securities and Exchange Commission, and other relevant key regulators come in.

Understanding that Nigeria’s economy need to be liberalized for competition and efficiency, regulators must be awoke to their responsibility of developmental, expansive, and progressive regulation. Shooting innovations down like unwanted birds in our green sky cannot always be the best of answers. No. While ensuring consumer protection and investment safety, regulators must not stifle the innovations that Nigeria badly needs to expand its contracting economy. Regulators must become (chief) innovators, otherwise regulators who should be gatekeepers to paradise will end up gatekeepers at the gate of the hell that Nigeria may find itself if regulators keep sacrificing digital inclusion, financial inclusion, and other values of citizenship empowerment in the (theoretical) name of consumer protection & investment safety. Today Nigerians are practically consuming themselves, resulting in increasing national insecurity. And investments have actually been visiting and living in neighboring countries these days. Should we continue to do the same thing and expect a different result?

Third, securing the future of this country will require Nigeria to have the courage to do things differently. Doing things differently in 2021 and beyond essentially involves embracing innovation and technology to boost our global competitiveness. Today emerging technologies such as artificial intelligence (AI), Big Data, blockchain, 3D printing, and others present opportunities for individuals, businesses, and governments. As Nigeria gradually transits into a digital economy, the country needs to leverage emerging technologies that have the potential to help us transform the economy. Today we say that the Internet has transformed our lives. This is because the Internet transformed the way we share information. This is the first-generation Internet; the Internet of information. In the same way, blockchain will transform lives, businesses, and governments. How? As described by Dan Tapscott, blockchain is the second-generation Internet.

Beyond the Internet of information, blockchain will transform the way we share anything of value. 

Blockchain is a distributed ledger or database, which can be either private, public, or hybrid, where anything of value, including identities, information, intellectual property, money, securities, votes, can be stored, moved, and managed openly, securely, and transparently, without any need for a third party. So whether it is transparency in Nigeria’s oil & gas sector or in governance including public finance and public contracts; whether it is traceability in supply chain industries; whether it is security in national digital identity management; financial inclusion driven by the freedom of money in African markets and beyond; or digitization of rights to assets for access to economic participation and the empowerment of Nigerians, blockchain technology can help.

As we move into a new digital age which Covid-19 pandemic has accelerated by 10 years, Nigeria must not and cannot afford to miss the immense opportunities blockchain provides across industries. Particularly for a country facing the problem of trust across board, blockchain technology provides a trustless system for the creation, storage, or transfer of anything of value.

At SiBAN, a self-regulatory body in Nigeria’s emerging blockchain industry, our members—both individuals and organizations—are equipped and positioned to help address socio-economic frictions in Nigeria through blockchain innovations across various industries. As a key stakeholder working collaboratively with the National Information Technology Development Agency (NITDA) on its proposed National Blockchain Adoption Strategy, we are poised to help Nigeria strategically position herself in the global economy towards maximizing the immense potentials of blockchain technology for the growth and development of the Nigerian economy and the Nigeria people. With blockchain technology, some of the challenges Nigeria is facing presently can be solved. Beyond research, there are case studies of successful blockchain applications in various key sectors and industries that we can apply or adapt in Nigeria based on our own peculiarities. This is one of the reasons why we are here: driving collaboration for innovation. 

SiBAN’s role as a Key Stakeholder in National Blockchain Adoption 

As one of the SiBAN delegates to the Stakeholders Engagement on the Review of the National Blockchain Adoption Strategy in Abuja on 5 November 2020 and now the President of SiBAN, I am happy to work closely with NITDA to ensure that the proposed National Blockchain Adoption Strategy is successfully adopted and implemented.

As I mentioned recently, the proposed adoption strategy also gives stakeholders such as the CBN, SEC, and other key stakeholders an opportunity to bring their regulatory concerns forward and have them addressed in a roundtable with stakeholders.

This is vital because the gains from blockchain innovation in the financial services industry and other industries outweigh the risks. And this is why we must invest in learning and relearning, and innovate risk management, not always throw away the baby with the bathwater.

My Growth Agenda for SiBAN is to Secure Digital Nigeria through Policy development, regulatory interventions, blockchain education, and collaboration for innovation.

Finally, I am committed to implementing the Growth Agenda of my administration from 2021–2022. I again use this opportunity to thank the members of SiBAN for the mandate given to me through the ballot 9-10 December 2020. I with the rest of my team are committed to delivering on our 4-point agenda of policy development, regulatory interventions, blockchain education & adoption, and collaboration for innovation. I look forward to working closely with SiBAN members and partners and collaborators in and outside the blockchain space towards securing Nigeria’s future in the global digital economy.

In line with the vision of the Federal Ministry of Communications and the Digital Economy on the use of technology for growth and development of the country, I dedicate my Growth Agenda to securing Digital Nigeria: Secure Digital Nigeria. Secure Digital Nigeria involves securing the future of Nigerians, including the youth who represent the greatest asset of this great nation, by leveraging on blockchain technology across various sectors and industries in today’s global economy. This will be through specific projects and programs which we will be launching shortly.

Apart from developmental initiatives, SiBAN will drive blockchain education by introducing our educational initiative.

Also, for consumer protection and investment safety, we will continue to explore and introduce measures that will help us sanitize the Nigeria blockchain space, including the ever-evolving crypto space, ensuring that players apply self-regulatory mechanisms while also preparing themselves for a regulated industry where this is the case. The Nigeria blockchain industry must be safe for all.

The year 2021, I believe, will be the beginning of great things in Nigeria’s emerging blockchain industry. Wherever you play—private sector or public sector—let us work together to secure Digital Nigeria through blockchain technology. We must make the numbers count for every Nigerian.

Happy New Year!

Yours faithfully 

Senator Ihenyen

President

Stakeholders in Blockchain Technology Association of Nigeria (SiBAN)

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