Kingsley Moghalu, former deputy governor of the Central Bank of Nigeria (CBN) has alleged that terrorist groups and kidnappers in the country now prefer to be paid ransom in cryptocurrencies.
The attraction arises from the difficulty in tracing cryptocurrencies and the absence of government and the financial regulator in the crypto market.
Speaking at a conference on cybersecurity in Dubai, Moghalu said Sub-Saharan Africa has emerged world’s leader in mobile financial services – and the booming fintech sector has the potential to accelerate the continent’s
POST-COVID economic recovery. He added, however, that the extraordinary growth of the sector presented new security challenges which must be addressed to ensure public confidence in emerging technology.
The security risk is even more pronounced with terrorists and kidnappers now turning their attention to cryptocurrencies. Recall that the CBN had prohibited cryptocurrency platforms and bank accounts from its banking system. Nonetheless, Nigeria remains one of the world’s biggest traders in cryptocurrency, especially bitcoin. Nigeria rose to the third biggest trader in the world in 2020, behind the United States and Russia.
“Overall, African countries suffer from an underqualified cybersecurity workforce. The level of investment in cybersecurity in the fintech sector is still relatively low, although it is rising, and African banks are still vulnerable to cyber attacks,” he said.
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Moghalu blamed the security situation on inadequate protection of ICT infrastructure and relatively weak cybercrime laws. To address the problem, he said Nigeria needs intense educational campaigns for fintech users. The private sector which hosts most fintech networks needs to work closely with governments in Africa to prevent and combat cybercrime.
He said it also presented an opportunity for the peer-to-peer exchange of best practices in cybersecurity between market players in technologically advanced countries and African countries that lead the world in fintech but not necessarily in fintech security or regulatory technology.
“Although cyber fraud remains a significant threat to fintech, the level of trust in fintech in Africa is much higher than in other parts of the world because fintech in Africa addresses basic problems such as communications, financial inclusion, and remittances and mobile payments, and solves problems such as financial access that advanced economies have long outgrown. Thus, while fintech in the West is a technological convenience in addition to what already exists, in Africa it serves much more basic needs such as communication itself, that most Africans previously lacked in terms of access to landlines. The trust fintech enjoys is directly correlated with its social origins,” Moghalu added.
