A new report has stated that restrictions on cryptocurrency transactions and a Twitter ban in Nigeria have crippled foreign direct investment in the fintech industry and negatively affected millions of young Nigerians who make a living in the sector.
The report was titled “Africa’s Urbanization Dynamics 2022: The Economic Power of Africa’s Cities.” The work was published under the responsibility of the Secretary General of the Organization for Economic Cooperation and Development and the Secretary General of the United Nations, with the support of the African Development Bank.
According to the report, young people get involved in jobs in the tech sector to survive, but this can be negatively affected by various government policies.
The report said in part: “Jobs in the tech sector range from building apps, trading digital currencies, operating on social media marketplaces, to freelance and gig work. By doing this, many young people can connect to the global economy and earn enough to survive. However, this comes at the expense of data and devices, and can be frustrating when arbitrary government policies are enacted.”
He added: “Restrictions on cryptocurrency transactions and a complete ban on Twitter in Nigeria have crippled foreign direct investment in the fintech industry and negatively impacted millions of young Nigerians who make a living in the sector. However, many have found a way to legally circumvent these restrictions and go on with business, effectively denying Nigeria the taxes and transaction fees that would otherwise enter the system.
In February 2021, the Central Bank of Nigeria placed a restriction on cryptocurrency transactions in the country.
It had said: “In addition to previous regulatory directives on the subject, the bank wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”
The central bank ordered banks and other financial institutions to identify the people and entities that operate cryptocurrency exchanges and close all such accounts.
In April this year, the main bank fined three money depository banks in the country N800m for violating regulations that prohibit customers from transacting in cryptocurrencies.
The three banks are Access Bank Plc, Stanbic IBTC and United Bank for Africa Plc.
Despite these regulations, Nigeria accounts for the largest volume of cryptocurrency transactions outside of the United States, according to Paxful, a Bitcoin exchange.
Furthermore, the country has the highest proportion of retail users making crypto transactions below $10,000, according to Chainalysis.
On June 4, 2021, the federal government announced the suspension of Twitter after the social media platform removed a tweet from the president, Major General Muhammadu Buhari (ret.). On June 5, 2021, telecommunication companies 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, and Twitter accepted the conditions set by the government to restore its service in the country.
However, according to the NetBlocks Cost of Shutdown Tool, the Nigerian economy loses 104.02 million naira ($250,600) every hour due to the Twitter ban. The 222-day ban caused the country an economic loss of around N554.22bn.
The Lagos Chamber of Commerce and Industry in January added that the Nigerian economy lost N10.72tn due to the suspension of the microblogging platform, Twitter.
PUNCH had reported in March this year that the value of capital imports in Nigeria fell by 30.78 percent, from $9.68 billion in 2020 to $6.7 billion in 2021, according to data from the National Bureau of Statistics. .
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