Experts See Nigeria’s economic future brightened by enhanced blockchain technology adoption

Joy Agwunobi

Blockchain technology is poised to bring significant change to Nigeria and the African continent, transcending its trendy status to become an indispensable component of the global financial landscape, according to industry experts.

The decentralised, transparent, and secure nature of blockchain technology has already sparked innovation in finance, supply chain management, healthcare, and governance.

As a revolutionary technology with vast potential, blockchain is projected to add  $1.76 trillion to global GDP by 2030, driven by its ability to make financial transactions more secure, transparent, and efficient, according to a PwC report.

Recognising this enormous potential, Nigeria launched its National Blockchain Policy in 2023 with the aim of leveraging the rapid growth of blockchain and cryptocurrencies within the country to ignite economic growth, revolutionise industries, and create a more inclusive digital economy.

This far-reaching potential was the main focus of industry experts who gathered at the recent “Building Africa’s Future: Harnessing Blockchain for Economic and Social Transformation” conference in Lagos.

At the blockchain conference, industry insiders, policymakers, and tech experts  discussed the revolutionary capabilities of blockchain in driving innovation, improving transparency, and boosting financial inclusion in Nigeria.

The event’s keynote speakers emphasised the far-reaching potential of blockchain technology across various industries, such as finance, agriculture, and logistics, stressing the vital importance of supportive regulatory frameworks and government collaboration in nurturing a fertile ground for blockchain startups to thrive.

In his keynote address, Emomotimi Agama, the director general of the Securities and Exchange Commission (SEC), underscored the critical importance of regulatory frameworks in guiding the growth of blockchain technology in Africa.

Agama observed that in regions like Africa, where financial exclusion, lack of transparency, and inefficiencies in both the public and private sectors are pervasive issues, blockchain presents a unique opportunity to overcome these challenges.

“In Africa, where we have t issues such as financial exclusion, lack of transparency, and inefficiencies in public and private sectors, blockchain presents an opportunity to build a future where these challenges are addressed,”he said.

Agama underscored the transformative potential of blockchain in fueling economic and social development, calling on stakeholders to embrace and harness the technology to drive sustainable growth.

Providing a basic understanding of blockchain, Agama described it as a distributed ledger technology that securely records and verifies transactions across a network of computers, ensuring transparency, security, and traceability.

The SEC DG further explained that cryptocurrencies, which emerged as digital assets, have enabled fast, secure, and low-cost cross-border transactions, highlighting the potential of blockchain technology to address significant economic and social challenges in Africa.

Agama emphasised that the SEC has always seen the potential of blockchain and digital assets, noting that their regulatory stance is clear, especially in determining whether these assets are securities or commodities.

“It is the responsibility of those involved to tell us what it is not,” Agama stated, adding that if it qualifies as a security, it must be registered with the SEC and traded on a registered exchange.

Addressing misconceptions about government cooperation with the blockchain sector, Agama refuted claims that the government is not supportive.

“The idea around the government not cooperating is totally false. We have taken time to understand this new entity and often, regulators play catch-up with innovators, which is not unusual,” he explained.

On the issue of market entry costs, Agama acknowledged feedback from industry players regarding high entry barriers for digital asset regulation.

He noted, “We are trying to encourage innovation and bring young people on board, but there are costs associated with compliance and market entry that need to be managed.”

He further emphasised the importance of collaboration among young entrepreneurs, saying, “The challenge the youth face is a lack of collaboration, governance, and accountability. Everyone wants to be a CEO, but without cooperation, we cannot build a strong and viable industry.”

Agama concluded by calling for a change in mindset, urging stakeholders, and the public to look beyond the negative headlines and focus on the potential of blockchain and digital currencies technology to drive positive change in Africa. He stressed the need for balanced education on the benefits of blockchain, noting, “The reason why the negative side is taking the day is because you and I have been quiet about it.”

Speaking on a panel session on “blockchain for financial inclusion economic growth and governance,” industry experts explored how blockchain technology can drive financial inclusion and simplify cross-border trade within Africa.

Chimezie Chuta, founder of Blockchain Nigeria User Group (BNUG), stressed the importance of education in promoting blockchain adoption, especially in Nigeria’s rural communities.

According to Chuta, “There needs to be sufficient education first for people to understand blockchain technology, its application, and how to interact with it.”

Chuta noted that many people rush into earning without understanding the basics, which often leads to financial losses.

He also pointed out the crucial role of infrastructure, such as rural telephony, in supporting financial inclusion, stating, “Without people having access to telephone, even if it’s basic 2G or 3G, it’s almost impossible for them to participate in the financial future, talk less of blockchain.”

Chuta further highlighted that blockchain technology offers unique advantages to Africa, allowing the continent to bypass traditional barriers. “The crypto industry is something that is designed to favour Africans more than the rest of the world because here we have a whole lot of infrastructure issues that have not been dealt with for us to compete with the rest of the world,” he said, suggesting that blockchain’s potential lies in helping Africa “leapfrog” over these challenges.

On his part, Edward Ibekwe, sales manager at Bitbarter, representing Etienne Okeke, MD/CEO of Bitbarter, provided insights into how blockchain could simplify cross-border trade within Africa. He emphasised blockchain’s ability to reduce transaction fees, speed up processes, and enhance security.

“In traditional remittance services, you often have high transaction fees, sometimes as much as 10 per cent  or even more, but with blockchain, we are  able to significantly minimise or cut that cost to fractions of a percent,” he noted.

Ibekwe added that blockchain transactions are faster, often near-instantaneous, bypassing the multi-day wait periods common with traditional services.

Tech experts at the event also called on universities to update their computer science curricula to bridge emerging technology skill gaps and keep Nigeria competitive in the rapidly evolving global blockchain industry.