Nigeria approves use of blockchain

The Nigerian government has approved the National Policy on Blockchain, according to Tolu Ogunlesi, a media aide to the country’s president.

In 2020, the National Information Technology Development Agency (NITDA) stated that through its National Blockchain Adoption, Nigeria plans to capture a market share of around $10 billion by 2025.

A draft of the strategy released in October 2020 stated that blockchain and decentralized ledger technology (DLT) would “facilitate the development of the Nigerian digital economy”.

Citing a study by PricewaterhouseCoopers (PwC), which predicted that blockchain technology – through its wide range of use cases – would potentially add $1.76 trillion to global gross domestic product over the next 7 years, making it 1.4 % of global GDP in 2030 NITDA Director General, Kashifu Inuwa, stated that Nigeria could incorporate the technology through its provincial services, payment services, digital identity, customer engagement and contract and dispute resolution applications.

NITDA’s blockchain adoption strategy is built on six initiatives:

• Establishment of the Nigeria Blockchain Consortium.
• Strengthening the regulatory and legal framework.
• Focus on delivery of national digital identity.
• Promotion of Blockchain digital competence and awareness.
• Creation of Blockchain Business Incentive Programs.
• Establishment of a national blockchain sandbox for proof of concepts and pilot implementation

Last year, NITDA in partnership with Domineum Blockchain Solutions launched a Blockchain Scholarship, 2022 Scheme, aimed at training 30,000 Nigerians on blockchain technology to develop career skills in emerging technologies.

The Nigeria Export Processing Zones Authority (NEPZA) revealed that it is in talks with Binance with a view to establishing a digital economic zone that will help entrepreneurs fast-track blockchain technology in the West African nation.

The partnership aims to build a digital hub similar to Dubai Virtual Free, the report revealed. Free trade zones attract zero percent tax rates, preferential tariff rates and 100% exemption from import and export duties that help improve international businesses.

“Our goal is to create a thriving virtual free zone to benefit from a nearly trillion dollar virtual economy in blockchain and digital economy,” said Adesoji Adesugba, NEPZA’s CEO. ex-Flutterwave and Andela CEO, Iyin Aboyeji’s latest initiative, Talent City is also involved in the partnership.

Blockchain is not a new technology for the Nigerian government. For example, the Central Bank of Nigeria (CBN) used a Hyperledger Fabric Blockchain to power the nation’s digital currency – the eNaira.

Despite this new policy, transactions using cryptocurrency remain illegal in the country. However, Zainab Ahmed, Nigeria’s Minister of Finance has previously revealed that there is a provision for taxation of cryptocurrency and other digital assets in the latest Finance Act.

President-elect Tinubu and blockchain advocacy

During his campaign, President-elect Bola Tinubu said his administration will encourage the use of blockchain technology and cryptocurrencies in Nigeria’s financial and banking sector.

“We will reform government policy to encourage the judicious use of blockchain technology in finance and banking, identity management, revenue collection and the use of crypto-assets. As part of our reforms, we will establish an advisory committee to review the existing regulatory environment governing blockchain technology and virtual asset services and, where necessary, propose changes that create a more efficient and business-friendly regulatory framework.” he said in his manifesto.

With the approval of this policy, Tinubu’s blockchain ambitions will find minor hiccups.