A new report has stated that restrictions on cryptocurrency transactions and the ban of Twitter in Nigeria crippled foreign direct investment in the fin‑tech industry and adversely impacted millions of young Nigerians earning a living from the sector.
The report was titled ‘Africa’s Urbanisation Dynamics 2022: The Economic Power of Africa’s Cities’. The work was published under the responsibility of the Secretary-General of the Organisation for Economic Co‑operation and Development and the Secretary-General of the United Nations, with support from the African Development Bank.
According to the report, young people engage in jobs in the tech sector to survive but this can be adversely affected by varying government policies.
The report read in part, “Jobs in the tech sector range from creating apps, trading digital currencies, operating in social media marketplaces, to freelancing and gig work. By doing this, many young people are able to plug into the global economy and make enough to get by. However, this involves the expense of data and devices, and can be frustrating when arbitrary government policies are enacted.”
It added, “The restrictions on cryptocurrency transactions and the outright ban of Twitter in Nigeria have crippled foreign direct investment in the fin‑tech industry and negatively impacted millions of young Nigerians who earn a living from the sector. Many have found a way, however, to lawfully bypass these restrictions and continue business, effectively denying Nigeria the taxes and transaction fees that would otherwise come into the system.”
In February of 2021, the Central Bank of Nigeria put a restriction on cryptocurrency transactions in the nation.
It had said, “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing with cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”
The central bank ordered banks and other financial institutions to identify persons and entities operating cryptocurrency exchanges and close all such accounts.
In April this year, the apex bank imposed an N800m fine on three Deposit Money Banks in the country for violating regulations barring customers from transacting in cryptocurrencies.
The three banks are Access Bank Plc, Stanbic IBTC, and the United Bank for Africa Plc.
Despite these regulations, Nigeria accounts for the largest volume of cryptocurrency transactions outside the United States., according to Paxful, a Bitcoin marketplace.
Also, the country has the largest proportion of retail users conducting crypto transactions under $10,000, according to Chainalysis.
On June 4, 2021, the Federal Government announced the suspension of Twitter after the social media platform deleted a tweet by the President, Major-General Muhammadu Buhari (retd.). Telecommunication companies had on June 5, 2021, blocked access to Twitter after receiving a directive from the Nigerian Communications Commission to that effect.
The ban was lifted after seven months on January 13, 2022, with Twitter agreeing to conditions set out by the government for its service to be restored in the country.
However, according to the NetBlocks Cost of Shutdown Tool, Nigeria’s economy loses N104.02m ($250,600) every hour to the ban on Twitter. The 222-day ban caused the country an economic loss of about N554.22bn.
The Lagos Chamber of Commerce and Industry, in January, added that the Nigerian economy lost N10.72tn to the suspension of the micro-blogging platform, Twitter.