First African economic power, at the door of the Top 30 in the world, Nigeria is going through a more than difficult economic period. This is due to the consequences of the COVID-19 pandemic on the economy, but also the drop in world crude oil prices in recent years.
After having recorded its second recession in five years, the Nigerian economy has returned to growth. But inflation, especially food costs, remains very high and the naira weak against the US dollar.
Faced with the inflation of the local currency, Nigerians have been forced to look for solutions. As a result, they are now ahead of the game in all things technological.
Nigeria is leading the way in the adoption of Bitcoin and cryptocurrencies in Africa. Africa’s largest economy is among the world’s leaders in terms of Bitcoin usage.
Bitcoin allows the people of Nigeria to do several things. First, it protects their wealth from the ravages of monetary hyperinflation caused by corrupt leaders who act primarily to protect their interests. Second, Bitcoin is already making it easier to make everyday payments while the banking system in Nigeria is more than imperfect.
Bitcoin gives Nigerians the ability to easily receive money from abroad from the Nigerian diaspora. Finally, Bitcoin facilitates international trade. In short, Bitcoin is already a Plan A for millions of Nigerians.
This does not sit well with the Nigerian government, which has tried to slow down and then ban the use of Bitcoin and crypto-currencies in the past, but without success. You can hardly ban a solution that improves the lives of your people.
Bitcoin is playing its role perfectly in Nigeria, especially since half of the population is under 30 years old. The rate of smartphone ownership among the population has reached 51%, which is already huge compared to Nigeria’s 200 million inhabitants.
Nigeria’s demographics favor Bitcoin and cryptocurrencies.
In an attempt to curb this emergence of Bitcoin and take advantage of a market where more than 400 million dollars were exchanged in 2020, the Nigerian government has just officially launched its central bank digital currency: the eNaira.
The Central Bank of Nigeria regularly warns Bitcoin users of its volatility, while pushing private banks to freeze accounts supplied with BTC, as they are accused of financing flows of illicit money, online scams, or money laundering in a country plagued by corruption.
All the anti-Bitcoin clichés are repeated as you can see.
With its eNaira, Nigeria wants to be a pioneer on the African continent and even in the world. While Ghana has been testing its eCedi as a new medium of exchange since September 2021, Nigeria has gone further:
“We have become the first country in Africa and one of the first in the world to have introduced a digital currency for our citizens”, said Nigerian President Muhammadu Buhari at a press conference in Abuja.
The goal of the eNaira will therefore be to try to recoup the windfall of money flowing through Bitcoin and cryptocurrencies in Nigeria :
“Of late, the use of cash in conducting business and making payments has been declining. A trend exacerbated since the onset of the pandemic and with the birth of a new digital economy.”
This digital version of the naira is just a desperate attempt by the Nigerian government to try and bring back under their control Nigerians who are emancipated and have regained power over their money thanks to Bitcoin.
This attempt will be futile, as Bitcoin has already won the battle against these CBDCs which are just pushing the problem of fiat currencies into the digital world.
Hyperinflation will always be with us even with an eNaira, as will the power of censorship of the powerful in the current system. Furthermore, the eNaira will give even more power to local authorities to monitor the activities of the population.
This vain attempt to oppose the emergence of Bitcoin in Nigeria is therefore already doomed to failure from my point of view, especially since it will not solve the problem of international trade for Nigerians either.
We’ll see what happens in the coming months, but I have little doubt that Bitcoin P2P trading volumes will continue to rise sharply in Nigeria in the coming months despite the launch of this eNaira.