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Nigeria’s Federal Ministry of Communications and Digital Economy (FMCDE) has sanctioned the National Blockchain Policy as the nation intensifies its efforts to establish a blockchain-driven economy.
The government’s endorsement of this policy will facilitate the formal application of the technology within the country, which has experienced notable cryptocurrency adoption in recent years. The FMCDE anticipates that its execution will yield beneficial outcomes for both the public and private sectors in Nigeria.
Blockchain Adoption
The recent initiative towards blockchain has also been spurred by Nigeria’s ambition to reduce its substantial economic dependence on the oil and gas industry and to enable the economy to “leapfrog” into one that is propelled by digital technologies.
Consequently, the Federal Ministry of Communications and Digital Economy formulated the National Blockchain Policy to diversify the economy on behalf of the federal government. This aligns with the National Digital Economy Policy and Strategy (NDEPS), which was introduced by President Muhammadu Buhari in November 2019.
Following this, the initial draft of the policy published in October 2020 detailed the strategy and indicated that it corresponds with the 8 pillars of the ‘DIGITAL NIGERIA’ Roadmap of the FMCDE. These pillars include – Developmental Regulation, Digital Literacy & Skills, Solid Infrastructure, Service Infrastructure, Digital Services Development & Promotion, Soft Infrastructure, Digital Society & Emerging technologies, and finally, Indigenous Content Development and Adoption.
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“The vision of the Policy is to create a Blockchain-powered economy that supports secure transactions, data sharing, and value exchange between people, businesses, and Government, thereby enhancing innovation, trust, growth, and prosperity for all. The implementation of the National Blockchain Policy will have a positive effect on both the public and private sectors of the country.”
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The National Information Technology Development Agency (NITDA) will be responsible for coordinating the policy initiatives under the supervision of the FMCDE. The authorities have also established a multisectoral steering committee to oversee the implementation of the policy.
The Federal Executive Council has instructed relevant regulatory bodies – NITDA, Nigeria’s Central Bank, the National Universities Commission, the Securities and Exchange Commission, and the Nigerian Communications Commission to create regulatory frameworks for blockchain implementation across various sectors of the economy.
In the meantime, Nigeria’s SEC intends to promote tokenization, primarily focusing on real-world assets such as equities, bonds, and real estate. However, cryptocurrency is not included in the current agenda.
Earlier this year, the nation experienced a cash shortage that resulted in violent protests, causing numerous injuries and some fatalities. Nigerians have turned to cryptocurrencies as a means to protect themselves against ongoing inflation and to circumvent the various restrictions on naira transactions in online payments. The African nation was ranked 11th on the Chainalysis 2022 Global Crypto Adoption Index and 17th for peer-to-peer exchange trade volume.
Blockchain Tech Adoption Trajectory
PricewaterhouseCoopers (PwC) recently released a report that thoroughly examines blockchain technology. It noted that blockchain, recognized as one of the “world’s fastest developing technologies,” could potentially enhance the global economy by $1.76 trillion by 2030.
The economists at the financial firm predict that most businesses will be utilizing blockchain by 2025. By that year, blockchain’s contribution to GDP is projected to reach $422 billion.
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