More than any other economy in Africa, and perhaps the world, Nigeria needs to urgently adopt blockchain technology to drive economic growth and engender an inclusive and transparent society. Nigeria is faced with critical challenges that continue to hamper its growth.
Struggles with financial inclusion, graft, supply chain and trade enhancement, innovation and technology adoption, digital identity and security, remittances and cross-border payments, infrastructure development, budgeting, and revenue allocation are just a few of the challenges slowing the country’s pace of development.
Blockchain technology holds immense promise to address these challenges. It is, therefore, imperative that the country position itself to harness the transformative power of this technology. “Blockchain is a tool to proffer far-reaching solutions to the world’s most imminent public and private problems,” says Adeshina Ajayi, a certified blockchain expert and blockchain management consultant.
Indeed, the beauty of blockchain is that it can be applied in all human endeavours: healthcare; education; fashion; entertainment; politics; governance; infrastructure; security; transportation; tourism; religion; construction; banking; insurance; trade; diplomacy; the list is endless. But the most popular application has been in cryptocurrency.
For perspective, what is blockchain? “Blockchain is a decentralized, distributed ledger technology that securely records transactions across multiple computers.” Unlike traditional centralized systems where a single entity controls the database, blockchain operates on a decentralized network of nodes (computers) ensuring transparency, integrity, and immutability of data. The security of blockchain is ensured through cryptographic techniques, making it resistant to hacking and fraud.
To be sure, Nigeria was the first country in Africa to adopt blockchain technology on a national level. In May 2023, President Muhammadu Buhari, shortly before leaving office, approved the National Blockchain Policy for Nigeria. The government said it was promoting the adoption of the technology to “improve the quality of services delivered by the public and private sectors, boost innovation, create job opportunities, drive economic growth, and enhance governance.”
Read also: Blockchain, AI to help Africa’s fight against illicit financial flows
A committee, labelled the National Blockchain Implementation and Steering Committee, was immediately constituted to implement the policy. But over a year later, the country remains at the blockchain policy level. The National Information Technology Development Agency (NITDA) had in May 2024 reconstituted the committee, now named the National Blockchain Policy Steering Committee (NBP-SC), “to validate trends in blockchain technology and incorporate new stakeholders for inclusive adoption and implementation.”
It is hoped that with this new committee, the government will move very fast on the implementation to ensure the benefits and opportunities presented by blockchain are harnessed. Below we examine some of the applications of blockchain and their benefits.
Adequate data capture
One of the most important applications for blockchain by the government will be in the area of data capture and identity management. Proper or adequate data capture is very critical to economic planning and development. Often, the country introduces policies or initiatives without adequate underlying data to either support the necessity for the policy or validate its impact. The country continues to struggle with data capture, which does not bode well for development. For instance, we still do not have an accurate figure of our population, which is why we keep seeing different figures from different quarters. Government agencies like the Federal Road Safety Commission, the National Identity Management Commission (NIMC), and the Nigeria Immigration Service continue to struggle with data capture. As we prepare for the next census, it is important that blockchain is integrated into the exercise.
Anti-graft features
Nigeria is well known for its struggles with corruption and opaque operations in the private and public sectors. Blockchain can help to permanently address this. Its immutable ledger offers a solution by ensuring that transactions and records are transparent and tamper-proof. Implementing blockchain in public procurement, government financial transactions and operations can considerably reduce corruption and increase accountability. For instance, blockchain can be deployed to track public funds, ensuring they are used for their intended purposes and enabling real-time auditing.
Digital identity and security
Allied to data capture is the lack of secure and reliable identity verification systems. In 2022 and in March 2024, there were reports that the NIMC portal was hacked, though on both occasions the commission denied such happened. Truth or not, the point here is the possibility that the server could even be compromised. With blockchain that possibility is nonexistent because the technology offers a robust solution by providing secure digital identities that individuals can use to access education, insurance, banking, healthcare, and other critical services.
Financial Inclusion
A 2023 financial inclusion report by Enhancing Financial Innovation & Access (EFInA), a financial sector development organization, showed that the CBN financial inclusion policy has only achieved 74% success. What this means is that about 30 million Nigerians are still financially excluded. The pace of inclusion has been slow but blockchain technology can potentially boost the pace. Blockchain can provide secure and accessible financial services. Blockchain-based platforms can facilitate peer-to-peer transactions, microloans, and savings programmes without the need for traditional banking infrastructure. This democratization of financial services can empower individuals and small businesses, fostering economic participation and growth, particularly in rural and underserved areas.
Trade enhancement
Blockchain technology can revolutionize Nigeria’s supply chain and trade processes. By providing a transparent and immutable record of the journey of goods from production to delivery, blockchain can enhance traceability, reduce fraud, and improve efficiency. This is particularly valuable for Nigeria’s agricultural sector, where issues of quality control and counterfeit products are prevalent. Blockchain can also facilitate smoother and more secure international trade by streamlining customs processes and ensuring compliance with global standards.
Diaspora dollars
Nigeria’s large diaspora community sends billions of dollars in remittances back home annually. However, traditional remittance channels are often slow and expensive. Blockchain can streamline cross-border payments, making them faster, cheaper, and more secure. This not only benefits the recipients but also enhances the flow of foreign exchange into the country, supporting economic stability.
Government must know that blockchain is already nurturing a culture of innovation and entrepreneurship in Nigeria. The technology has given rise to numerous startups and tech hubs that are developing blockchain-based solutions tailored to local challenges. From fintech applications to decentralized finance platforms, Nigerian business promoters are leveraging blockchain to craft new business models and drive profitability. This vibrant ecosystem is attracting investment and positioning Nigeria as a hub for blockchain innovation in Africa. It is hoped that government will quickly harness its unlimited possibilities.
TECH ACTOR OF THE WEEK
Our tech actor of the week is Adeshina Ajayi, the foremost blockchain expert out of Africa. For his impact in the blockchain industry in Africa and globally, over the past decade, he is a deserving tech actor of the week.
Adeshina is a certified blockchain expert, blockchain author, and blockchain management consultant who founded and leads Digital Focus LLC, a platform he uses to bridge the blockchain knowledge gap and build blockchain solutions for Africans and people of African descent.
Adeshina is an international blockchain consultant who helps corporate institutions and individuals understand and apply blockchain and the leverage that blockchain provides for business growth and scalability. He has hosted his “Blockchain Pathway Conference” across Nigeria and his blockchain book tour has taken him across the US, Kenya, and the United Arab Emirates, UAE.
He is a member and expert columnist for Blockchain Council and the International Council of Management Consulting Institutes (ICMCI), and the best-selling author of “The Blockchain Pathway and Wealth Transfer”.
At Digital Focus Nigeria, he trained and certified two thousand (2000) blockchain experts and completed projects for CMC Connect, Alpha Training Lab (ATL), Code Tutor, TLCGlobal, Addicio Solutions and Nerdzfactory.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
