This is the Full Report of the Stakeholders Engagement for the Review of the National Blockchain Adoption Strategy Framework held at eGovernment Training Centre (eGTC), Public Service Institute of Nigeria (PSIN), Abuja FCT, Thursday 5 November 2020. PDF version is available here.
Introduction
“Blockchain is an emerging technology that provides a secure and fault-tolerant distributed ledger platform for transactions. It will facilitate the development of the Nigerian digital economy and will enable citizens to have more confidence in digital platforms.” – The draft National Blockchain Adoption Strategy Framework
The idea of a National Blockchain Adoption Strategy Framework stems from the need for the Nigerian government to leverage on the potentials of blockchain technology for national advancement.
Recognizing the need for diversification of the Nigerian economy, the Federal Government, through the Federal Ministry of Communications and Digital Economy (FMoCDE), developed a National Digital Economy Policy and Strategy. This was anchored on 8 pillars, namely Developmental Regulation, Digital Literacy & Skills, Solid Infrastructure, Service Infrastructure, Digital Services Development & Promotion, Soft Infrastructure, Digital Society & Emerging technologies, and Indigenous Content Development and Adoption.
Essentially, the National Blockchain Adoption Strategy Framework, as a national document, identifies strategies for the “adoption of the blockchain technology by government in its digital transformation agenda.” The objectives and initiatives that will be actively pursued by the Federal Government through designated Ministries, Departments, and Agencies (MDAs) are also stated.
Therefore, the Stakeholder Engagements for the Review of the National Blockchain Adoption Strategy Framework was organized by NITDA to facilitate the review of the draft National Blockchain Adoption Strategy Framework by identified stakeholders, including Stakeholders in Blockchain Technology Association of Nigeria (SiBAN).
SiBAN Delegates to the Technical Working Group (TWG) Set up to Review the Draft National Blockchain Adoption Strategy Framework
SiBAN was specially invited by NITDA to send its delegates to the Stakeholders Engagement. The delegates will also effectively become members of the TWG. Accordingly, SiBAN, through the Caretaker Committee, appointed the following persons:
- Senator Ihenyen: General Secretary & former Vice Chairman (Policy & Regulations), SiBAN and Lead Partner, Infusion Lawyers;
- Abikure Tega: two-time member of the SiBAN Caretaker Committee and Founder, Kurepay
Together, the two delegates are to primarily represent the best interest of the community, particularly SiBAN members and the emerging blockchain industry by focusing on policy, regulatory, and business concerns raised by the draft National Blockchain Adoption Strategy Framework.
Attendees
The Stakeholder Engagement for the Review of the National Blockchain Adoption Strategy Framework held on Thursday 5 November 2020 with stakeholders from both the public and private sectors. Apart from National Information Technology Development Agency (NITDA), the organizer of the Stakeholder Engagement, attendees include representatives from the following bodies:
- Federal Ministry of Communication and Digital Economy
- Central Bank of Nigeria (CBN)
- Securities and Exchange Commission (SEC)
- Nigeria Immigration Service (NIS)
- Nigeria Inter-Bank Settlement System (NIBSS)
- Fintech Association of Nigeria
- National Identity Management Commission
- Nigeria Bar Association (NBA)
- Nigeria Communications Commission (NCC)
- Nigeria Customs Service (NCS)
- Nigeria Society of Engineers (NSE)
- Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), and
- Relevant Blockchain User Groups and Technology Associations such as Blockchain Nigeria User Group (BNUG) and the Cryptography Development Initiative in Nigeria (CDIN).
Key Stakeholders for Successful Implementation of the proposed National Blockchain Adoption Strategy Framework
For clarity and easy reference, as listed in the proposed draft Framework, below are the institutions that have a role to play in its implementation:
- Federal Ministry of Communication and Digital Economy
- National Information Technology Development Agency (NITDA)
- Central Bank of Nigeria (CBN)
- Nigeria Deposit Insurance Corporation (NDIC)
- Securities and Exchange Commission (SEC)
- Nigeria Immigration Service (NIS)
- Nigeria Inter-Bank Settlement System (NIBSS)
- Ministry of Budget and National Planning
- Nigeria Communication Commission (NCC)
- National Pension Commission (PENCOM)
- Nigeria Insurance Commission (NAICOM)
- Fintech Association of Nigeria
- National Bureau of Statistic (NBS)
- National Identity Management Commission (NIMC)
- Independent National Electoral Commission (INEC)
- Federal Inland Revenue Service (FIRS)
- Nigeria Bar Association (NBA)
- Corporate Affairs Commission (CAC)
- Nigeria Customs Service (NCS)
- Financial System Strategy (FSS2020)
- Nigeria University Commission (NUC)
- Association of Bureau de Change of Nigeria
- Code of Conduct Bureau (CCB)
- Investment Promotion Council
- Nigeria Society of Engineers (NSE)
- Stakeholders in Blockchain Technology Association of Nigeria (SIBAN)
- Relevant Blockchain User Groups and Technology Associations
Stakeholders Engagement Program
After arrivals and registration of delegates and other participants, the Stakeholders Engagement started 10:00am. The program includes the national anthem, welcome address, goodwill messages, special remarks, tea break, presentations, breakout session, plenary session, vote of thanks, and lunch & closing.
Welcome Address
The welcome address was briefly delivered by Dr. Usman G. Abdullahi, Director, IT Infrastructure Solutions, NITDA. In his well one address, Dr. Abdullahi emphasized the need for Digital Nigeria to be achieved and how the proposed National Blockchain Adoption Strategy Framework will help Nigeria leverage on blockchain as one of the emerging technologies to boost trust, transparency, and accountability. He enjoined all stakeholders to actively participate.
Goodwill Message
Goodwill messages were also delivered, upon invitation by the organizers, by a number of representatives of various stakeholders in the blockchain industry, including Chuta Chimezie and Senator Ihenyen on behalf of BNUG and SiBAN respectively.
Upon invitation to the podium to give a goodwill message on behalf of SiBAN, below are Senator Ihenyen’s words:
On behalf of our people at SiBAN all across the country, I am particularly delighted that a day like this has come. We realized the huge potentials that the blockchain has when we talk about bringing innovation into the space. And when we talk about innovation, we are not just talking about innovation that is limited to one sector. Blockchain is that technology that holds promise across every sector of the economy, whether it is agriculture, security, logistics, transportation. We have seen the successful implementation of the blockchain in other countries. As my President at SiBAN, Mr Paul Ezeafulukwe would always say, ‘Blockchain is for Africa’. At SiBAN we believe that more than any other continent, blockchain is for Africa. When it comes to blockchain, we are looking at an opportunity to restrategize and change the future [and] secure the future of our country for the youth and everyone as well. So I’m particularly delighted to be here and I can assure you that my constituency, which is SiBAN, will contribute successfully to this program”.
Special Remarks
Kashifu Inuwa Abdullahi, NITDA Director General/CEO, gave a brief special remarks. According to the NITDA Boss, Nigeria wants to be “strategically placed to capture value from the economic potential of blockchain”. Considering Nigeria’s huge youthful population and the country’s position in Africa, the NITDA Boss said it was looking at how Nigeria could get at least around 6 to 10 billion dollars from blockchain by the year 2030.
He thanked stakeholders for their contributions so far and enjoined everyone to participate actively in the review of the draft National Blockchain Adoption Strategy, which according to himz is not caste in stone.
First Presentation
Abdulsalam Umar, Creative Lead at Thermolinks Concepts Limited, presented “An Overview of the National Blockchain Adoption Strategy”. This was an overview of blockchain technology, its pros and cons, and why the National Blockchain Adoption Strategy matters.
Second Presentation
Melissa Amouny, a blockchain expert, delivered a virtual lecture on “Blockchain in other jurisdictions: A Review of 10 National Blockchain Strategies”. It was a brief comparative analysis of blockchain strategies in jurisdictions such as Estonia, Malta, Switzerland, UK, and others. Generally, the strategies included sandboxes, special tax arrangements, developmental regulation, legislative changes, etc.
Third Presentation
Chuta Chimezie, founder of BNUG, presented “Nigeria Blockchain & Crypto Assets Landscape: Reports from the Trenches”. In his presentation, Chuta Chimezie introduced the audience to BNUG and took them through the present landscape of the blockchain & crypto industry in Nigeria. Adedeji Owonibi, Senior Partner, Financial Forensics/Virtual Assets at A&D Forensics, briefly handled the digital-asset fraud, risks, and compliance aspect of the presentation.
Breakout Session
Though according to the program of the day the Stakeholders Engagement was to have a breakout session with Session A handling the “National Blockchain Adoption Strategy” while Session B handles “National Blockchain Adoption Strategy Roadmap”, and then a plenary session. But for time constraint, these were merged into one plenary session where the draft National Blockchain Adoption Strategy was reviewed by stakeholders section by section.
Section-by-Section Review & Deliberation
This session was anchored and administered by Dr Ayodele Bakare and Dr Abubakar Dahiru, both from NITDA. In order to ensure proper coordination, delegates were required to submit their reviews orally under each section of the draft National Blockchain Adoption Strategy, should they have any review for the section under review.
What follows below is an overview of the section-by-section review of the draft framework at the Stakeholder Engagement:
- Introduction
Vision and Mission (page 9 of the draft National Adoption Blockchain Strategy)
Vision: Use Blockchain technology as a platform for the transition into a digital
economy.
- Review: A delegate suggested that the vision should be reviewed to envision where Nigeria wants to be in a definite year.
Mission
To drive the adoption of blockchain technology in government in a way that
supports efficiency, transparency, and productivity.
- Review: None
Introduction (pages 10-11 of the draft National Adoption Blockchain Strategy)
- Review: None
- Blockchain: New Trust Paradigm (page 12-16 of the draft National Adoption Blockchain Strategy)
Reviews are as follows:
- A stakeholder observed that the section is silent on the types of blockchain (private, public, and consortium blockchains) and the implications of this on the adoption of blockchain in Nigeria. He suggested that the proposed draft framework should be reviewed to reflect this point.
- Boulevard Aladetoyinbo, Head of Crypto-asset Capital Formation Practice, Lex Futurus, who identified himself as Nigeria’s representative on the ISO/TC 307 of the International Organization for Standardization (ISO), Geneva, suggested that NITDA should work with ISO to develop a proper and comprehensive blockchain adoption strategy for Nigeria. Though NITDA said that it already has the Standard Organization of Nigeria (SON) working with it, Boulevard Aladetoyinbo argued in favour of getting ISO/TC 307 involved in order to ensure consistency with international standards.
- Basil Udotai, on behalf of the Nigerian Bar Association (NBA), submitted that for Nigeria to get the proposed adoption strategy right, it is vital that NITDA understands that it cannot regulate technology but can only set standards and make policies. Similarly, he pointed out that since it is technology services that can be regulated, NITDA must recognize the regulatory powers and oversight of relevant regulators in order to avoid regulatory issues. Mr. Udotai was accompanied by Malan Faya, an NBA member who heads the research team at the Information Technology Committee, NBA Section on Business Law (SBL).
- Necessity Framework and Benchmarking (pages 17-21 of the draft National Adoption Blockchain Strategy)
Reviews are as follows:
- Concerning the subsection on Government Enabling Landscape, Senator Ihenyen, on behalf of SiBAN, submitted that while this section identifies some vital regulatory frameworks, and policies, it should be reviewed to include the Financial Systems Strategy 2020 (FSS 2020). This, he said, is vital because the financial services industry is one industry that has witnessed greater use of the blockchain. This also ensures consistency between the proposed National Blockchain Adoption Strategy and CBN’s FSS 2020. The audience agreed, including a NIBSS delegate.
Flowing from the immediate submission above, a stakeholder observed that the proposed draft Framework should also focus on blockchain applications outside the financial services industry such as agriculture, oil & gas, etc., in order for a more robust approach to adoption of blockchain adoption in Nigeria.
- Concerning the subsection on Legal/Regulatory Framework:
Senator Ihenyen, on behalf of SiBAN, submitted that this part needs to be reviewed in a manner that is not vague, ambiguous, or overgeneralized. He suggested that the legal/regulatory framework aspect of the draft be reviewed to be sector specific so that the relevant regulators under such sectors will approach legal/regulatory matters from the general principles or regulatory standpoints for their respective industries. This approach, according to Senator Ihenyen, will avoid the likelihood of having regulators hide under the vagueness and ambiguity of the legal/regulatory framework, and consequently render the National Blockchain Adoption Strategy a mere literature.
SiBAN’s stand above effectively corroborates the stand taken by a delegate of the Securities and Exchange Commission (SEC). According to the SEC delegate, the National Blockchain Adoption Strategy contains much “literature” without specific strategies and guidelines.
- Strategy Framework (pages 22-31 of the draft National Adoption Blockchain Strategy)
The proposed Strategy Framework for blockchain adoption is built on the following 6 key initiatives:
- Establishment of Nigeria Blockchain Consortium
- Strengthening of the Regulatory and legal framework
- Focus of 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.
Reviews are as follows:
- Under Initiatives, on page 24 of the draft Framework, a National Blockchain Consortium (NBC) is proposed. Stakeholders were of the view that the membership of the NBC should be from both the public and private sectors.
- Also, to ensure transparency, stakeholders suggested that the members of the proposed NBC be determined openly at the Stakeholders Engagement, not secretly so that all stakeholders are involved in the process.
- A NIBSS delegate suggested that the roles each stakeholder, including regulators, will play should be specified in the draft. If left unreviewed, this may result in the proposed draft becoming ineffective since responsibilities and tasks have not been assigned.
- Adedeji Owonibi, one of the midwives of the draft framework, suggested that the proposed framework should include the establishment of a single regulatory body for the purpose of ensuring coordination and compliance under the proposed framework.
- Charles Okaformbah, a BNUG delegate, suggested that NITDA should structure the proposed National Blockchain Consortium to be technology-driven, business-driven, and government-driven. He also suggested that with the right governance structure, vital matters such as funding, blockchain-application development, and intellectual property ownership and protection should be covered.
Strategic Objectives: Blockchain Business Incentives (page 28 of the draft National Adoption Blockchain Strategy)
Review is as follows:
- A stakeholder suggested that the business incentives for players in the blockchain industry should be stated clearly in the draft. For example, tax incentives.
Strategic Objectives: Regulatory Oversight (pages 29-30 of the draft National Adoption Blockchain Strategy)
Review is as follows:
- Senator Ihenyen, on behalf of SiBAN, submitted that while the regulatory oversight functions outlined in the proposed draft Framework are critical, he wondered why it does not specifically include legislative advocacy or actions, where necessary, since existing legislation may require certain changes in order to ensure or support blockchain adoption in Nigeria.
Strategic Objectives: Stimulate Innovation & Entrepreneurship; Investment Opportunities & Job Creation and generally (specifically pages 30-31 of the draft National Adoption Blockchain Strategy)
Reviews, observations, and suggestions are as follows:
- Mallick Bolakale, Of Counsel at TNP, observed that there appears to be a confusion whether the proposed draft Framework is meant for the public sector or private sector since some parts of the draft deviate from the mission of the proposed draft framework.
- Another stakeholder suggested that the initiatives under the proposed draft Framework should be private-sector led, not led by the government.
- Reacting to the debate concerning the noticeable public-private sector confusion in the draft Framework, Senator Ihenyen, on behalf of SiBAN, remarked that the confusion is understandable due to the fact that while the proposed draft Framework is clear about its mission at the beginning, it tries to subsume other things outside its mission. According to Senator Ihenyen, since the mission statement clearly states that the focus is to drive the adoption of blockchain in government in order to boost efficiency and transparency, the adoption strategy, logically, cannot be private-sector led but public-sector led. Therefore, the initiatives suggested in the proposed draft Framework will be targeted at MDAs, not necessarily the private sector. Then, to cater to the needs of the private sector in the blockchain industry and ensure specific incentives for players, Senator suggested a separate national blockchain adoption strategy for the private sector. This is to avoid any consequent ineffectiveness of the proposed draft Framework if business interests of players in the industry are mixed up with the interest of the government. This received support and applause from the majority of the participants.
- Abikure Tega, another SiBAN delegate, observed that the proposed draft Framework is not clear on what regulatory, infrastructural, and business incentives players in the blockchain & crypto industry in Nigeria should expect so that they can begin to build products and services accordingly. He sought to know whether the government would be identifying the sectors it wishes to take on first or it would allow players to determine this. Giving an example of how Nigeria’s financial technology (FinTech) sector has grown with little or no intervention from the government, Abikure Tega wondered whether it was necessary for the government to use blockchain technology in its various MDAs before government can support players in the private sector who have already done ahead to build products and services in this area.
- Re-emphasizing SiBAN’s point above, particularly that of Senator Ihenyen, Gabriel Inya-Agha FIMC, CMC, submitted that NITDA should separate the national blockchain adoption strategy for the public sector from that of the private sector as the priorities, interests, and models of each sector hardly align. He advocated for a separate national blockchain adoption strategy that is private-sector focused in order to best address the needs of players in the industry and better streamline what government’s role should be.
Submission of Further Reviews
As announced by NITDA at the program, other suggestions, observations, or improvements may be emailed to the Technical Working Group (TWG). This may also cover strategies and roadmap.
Vote of Thanks
Engr Babagana Digima, Head of Digital Economy Department at NCC, gave the vote of thanks. In their communications with SiBAN delegates, NITDA also expressed its appreciation for SiBAN’s participation and contributions. Other stakeholders, including CDIN, used the opportunity to emphasize the need for collaboration among blockchain associations, groups, or bodies in Nigeria.
(It is in the spirit of collaboration driven by the need to protect and represent the interest of players in Nigeria’s emerging blockchain that SiBAN proposed in September 2020 a Joint Committee on Digital Assets Application, Policy, and Regulation in Nigeria [JCDAAPRiN] to CDIN, BNUG, and FinTech Association of Nigeria (FinTechNGR).
Lunch and Closing
After a brief photograph session of stakeholders in attendance, stakeholders and other participants proceeded to lunch, effectively closing the one-day stakeholder engagement.
Conclusion
SiBAN had a successful outing at the stakeholders engagement in Abuja. Not only was SiBAN ably represented but the interests of its members were also represented, ensuring that whatever comes out of the proposed National Blockchain Adoption Strategy Framework does not work against the interest of Nigeria’s emerging blockchain & crypto industry.
To enhance SiBAN’s stakeholder engagements—whether regarding NITDA’s ongoing National Blockchain Adoption Strategy Framework, SEC’s Statement on the Classification and Treatment of Digital Assets, and others—it is vital that all players get involved. Everyone is encouraged to get involved. Policy and regulation cannot be left to the hands of a few persons only, whether expert or not. Policy and regulation concerns everyone.
NITDA expects further submission of suggestions and comments, if any, from stakeholders via email. Through the platform of the Technical Working Group (TWG) to which SiBAN’s two delegates have been included, SiBAN will be representing the interest of its members and stakeholders in the blockchain industry. If you wish to send any suggestions or observations through SiBAN, please email info@siban.org.ng before Wednesday 11 November 2020.
Report written and submitted by SiBAN delegates in the NITDA Technical Working Group on Review of the National Blockchain Adoption Strategy and approved by the SiBAN Caretaker Committee:
Senator Ihenyen: General Secretary & former Vice Chairman (Policy & Regulations), SiBAN and Lead Partner, Infusion Lawyers, sec@siban.org.ng; Abikure Tega: two-time member of the SiBAN Caretaker Committee and Founder, Kurepay, tega.kure@kurepay.com