The President of the Nigerian Senate, Senator Bukola Saraki, presented a paper during the National Conference on ICT and Cybersecurity which was held early this week in Abuja. He spoke eloquently on the challenges of cybersecurity in our nation, and the need for government to engineer effective policies to curtail their impacts.
As the nation’s third citizen and the leader of the Senate, Senator Saraki’s statements certainly have influence. I note the following from his presentation:
Internet Crime on the Rise
The Senator noted that “Internet-facilitated crime seems to be growing” in Nigeria. He explained further as follows:
Our cyber borders are very porous indeed. Some $450 million was lost to 3,500 successful cyber-attacks over a one-year period.- roughly 70 percent of the overall hacking attempts in the country. Estimates suggest that the hole created in the economy by cyber-crime amounts to 0.08 percent of the GDP – a loss of about N127 billion. This, needless to say, is unsustainable.
Regulation of Bitcoin
The Senate President noted on the case of Bitcoin as follows:
Still on the mutability of cyber threats, some of you may recall that the last major Ponzi fever in Nigeria fizzled out in a hail of bitcoin – a cryptocurrency exchanged anonymously on the Internet. The operators stopped paying investors in Naira, offering them bitcoin instead. However, cryptocurrencies, being relatively new, are not subject to any local laws regulating their use. This is an internet grey area that impacts on real people in real-time. I note that the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Commission (NDIC) have set up a committee to look at the use of bitcoin in this country …as there is clearly a need to establish a framework for the regulation of bitcoin and other cryptocurrencies.
Certainly, the Senate President will like to see Bitcoin regulated in Nigeria. That means that Bitcoin could be legalized in the nation for it to be regulated. He could have said that Nigeria would ban Bitcoin, but that was not where he was going. It seems obvious that most nations will arrive at the conclusion that cryptocurrencies would need to be regulated, over outright ban, since it would be hard to enforce a ban. Nevertheless, regulating Bitcoin may be extremely hard since the Central Bank of Nigeria will not have the absolute supernatural power over Bitcoin. My recommendation will be to create a digital currency that will be tied to the Naira which CBN could easily regulate. I expect the CBN and NDIC committee noted by the Senator to provide directions in coming months.
My position remains that we do not need Bitcoin but Nigeria needs a digital currency tied to the Naira that will enable the efficient functioning of the blockchain infrastructure which I expect to evolve in coming years in the nation. If the Central Bank blesses such a plan, we will experience a virtuoso innovation system in redesigning the architecture of some of our industrial sectors and make them more efficient even while being cost-efficient. As I noted in my entry on Blockchain Africa, blockchain has a promise for Africa. Nigeria just have to find a way to lead in that promise at least in West Africa where its impact is huge. As Goldman Sachs goes closer to Bitcoin and digital currency, we may be too slow that very soon, it becomes an entirely foreign imports to Nigeria.