Can we have a BTC ETF priced in Naira? Anyone doing something along that line in Nigeria? Tekedia Capital is interested provided you currently have an active  fund/portfolio manager, or underwriter license from SEC Nigeria.

Bitcoin is trending around $89,000 now, and it could hit whatever. So, in this world, we can just sleep, do nothing, and our coin investments will be growing. No production and nothing. This is very scary for the future of economies.

Why should a young man keep a job if he can buy a coin and that coin can grow from nothing to something purely on the faith of others. Of course you can argue if that is not what happens with stocks traded in stock exchanges? There is a huge difference: for stocks, a company is producing something to support the movement of those assets. But in cryptos, nothing like that. Yes, no balance sheets or income statements out of any core production system, to fix frictions in markets,  but the thing keeps moving!

As ETH, BTC, etc evolve, economic architectures will be distorted, and nations which fail to capture value in this new asset class may lose. That is why I think someone in Nigeria must push for a Bitcoin ETF so that our people can join the party wherever it takes. ETF provides a path that is better than self-custody which remains complicated for most citizens.

Our goal is to be a founding investor. Connect with Tekedia Capital if you see it from our angle. We do not advocate people buying and selling cryptos. Nonetheless, we invest in infrastructures which power the crypto economics and its evolving economies.

A bitcoin ETF is an exchange-traded fund that tracks the performance of bitcoin with futures contracts, which are derivative investment securities that allow investors to speculate on the future price of assets. By investing in an ETF, investors can gain exposure to the price movements of bitcoin without holding the digital currency itself.

Bitcoin futures contracts are agreements between two parties to buy or sell a specific amount of bitcoin at a predetermined price on a specific date in the future. The futures market provides investors with a way to hedge against potential price swings in the underlying asset, which, in this case, is bitcoin.

BMI, the research arm of Fitch Solutions, has projected a significant depreciation in Nigeria’s currency, forecasting that the naira could fall to N1,993 per US dollar by 2028.

This expected devaluation is poised to place substantial strain on Nigeria’s medical devices market, increasing costs for both importers and consumers within the sector. The findings are detailed in a report titled, “Weak Naira and Structural Challenges to Constrain Nigeria’s Medical Devices Market Growth,” which underscores how currency depreciation and structural economic challenges may hinder growth in the country’s healthcare sector.

The report explains that Nigeria’s healthcare market is heavily dependent on imports of medical devices, with more than 95% of the market relying on foreign supplies.

“We expect that the naira will end 2028 at N1,993/$ from N306/$ in 2018,” BMI’s report said, indicating an accelerated decline that could severely impact the affordability of medical equipment in Nigeria.

Commenting on the ripple effects, the report added, “Continued weakness of the naira will increase medical device import costs and erode consumer purchasing power,” especially for high-cost medical equipment like diagnostics, orthopedics, and dental tools.

This depreciation, BMI warns, could undermine both the health sector and the general public’s purchasing power to invest in essential medical technologies, especially given the limited funding in Nigeria’s public health sector.

Policy Interventions To Tame Rising Costs

President Bola Tinubu’s administration has attempted to mitigate these rising costs. In June 2024, Tinubu signed an executive order eliminating tariffs, excise duties, and VAT on selected medical machinery and raw materials. This measure aimed to reduce local production costs and enhance competitiveness.

However, BMI notes that these interventions may not be enough to offset the economic challenges, adding, “Despite these attempts, Nigeria’s medical devices market will continue to face operational and demand headwinds over the near term.”

While Nigeria grapples with high import dependency and rising costs, the global medical devices market continues to grow. By 2028, Nigeria’s market is anticipated to reach N171.1 billion ($344.7 million), primarily driven by the large population, high rates of chronic and communicable diseases, and a push toward universal health coverage.

“Improving health spending through a focus on universal health coverage, coupled with a large population size and double burden of chronic and communicable diseases, will sustain high demand for all medical devices, particularly diagnostics, consumables, and hospital equipment over the near to medium term,” BMI said.

Manufacturing Challenges, Companies’ Exodus

In recent years, several foreign manufacturers, including major pharmaceutical companies, have suspended or halted operations in Nigeria due to the harsh economic landscape. Türkiye’s Jubilee Syringe Manufacturing (JSM), once a major syringe producer, paused its Nigerian operations in January 2024, citing operational disruptions. This decision followed similar exits by Sanofi and GlaxoSmithKline, which withdrew due to challenging conditions in Nigeria’s macroeconomic environment.

“Key barriers include the scarcity of skilled labor, limited access to modern technology and inadequate infrastructure,” the report notes, adding that these obstacles make Nigeria a tough landscape for local production in the medical device sector.

Industry expert Dr. Kehinde Olu, CEO of Nigeria’s Medix Technologies, shares the impact of these challenges: “Local manufacturing for medical devices in Nigeria is a distant goal. The infrastructure simply doesn’t exist yet to make domestic production competitive. The costs associated with importing raw materials alone make it difficult for any company to maintain an edge in the global market,” he said.

Regulatory Bottlenecks

Another critical impediment, according to the report, is the cumbersome regulatory environment, which creates significant delays in the approval process and complicates the entry of new medical devices into the market.

“The country faces a substandard regulatory environment and bureaucratic hurdles which often delay the approval and market entry of new medical devices, discouraging investment and innovation,” BMI outlines.

The recent operationalization of the African Medicines Agency (AMA) has the potential to improve the regulatory landscape for medical products across Africa, but the report cautions that it will take time to feel its impact fully.

“If implemented effectively, the AMA could enhance regulatory alignment across African countries, but the benefits for Nigeria’s market are only likely to materialize in the long term,” BMI asserts.

Infrastructure and Supply Chain Hurdles

The report also underscores that Nigeria’s unreliable electricity supply, transportation networks, and limited access to technology are significant impediments to local production.

“Despite government efforts to incentivize local production, these structural challenges, in addition to a challenging macroeconomic environment, will limit growth prospects for medical device manufacturers in Nigeria,” the report said.

While the naira’s depreciation is expected to make imported medical devices increasingly unaffordable, a weaker currency could benefit exports by enhancing the competitiveness of locally manufactured medical products, according to BMI. However, without substantial improvements in infrastructure, skilled labor availability, and regulatory efficiency, the report suggests that local manufacturing will struggle to take advantage of this potential export edge.

“Despite government efforts to build a conducive environment, persistent structural and macroeconomic issues are likely to continue to challenge Nigeria’s medical devices market growth over the near to medium term,” the report said.

The U.S. has intensified its measures to restrict advanced semiconductor technology from reaching Chinese companies by ordering Taiwan Semiconductor Manufacturing Co. (TSMC) to halt shipments of high-performance chips to certain Chinese customers, CNBC reports, citing sources.

The Commerce Department’s latest directive, effective this Monday, targets advanced chips, specifically those of 7 nanometers or more sophisticated designs, typically used in artificial intelligence (AI) and graphics processing units (GPUs). This move is the latest in a series of restrictions meant to curb China’s AI and semiconductor advancements, particularly in light of recent discoveries linking these chips to Huawei, a Chinese tech giant long under U.S. trade restrictions.

The impetus for this clampdown began last month when TSMC notified the Commerce Department that one of its advanced chips had been discovered in a Huawei AI processor, as reported by Reuters. Huawei, on the U.S. restricted trade list since 2019, requires special licenses from suppliers for any U.S.-origin technology. The Department’s letter to TSMC effectively halts any shipments of chips that could potentially aid Huawei’s AI-related efforts without following the formal rule-making process.

Further compounding the concern, the chip used in Huawei’s processor was revealed by Tech Insights, a tech research firm, after dissecting Huawei’s Ascend 910B processor. Released in 2022, the Ascend 910B is the most advanced AI processor currently available from a Chinese firm. How TSMC’s chip ended up in the Huawei processor remains unclear, but the discovery raised red flags within the Commerce Department, given that any license aiding Huawei’s AI capabilities would likely have been denied.

In response, TSMC has already suspended shipments to other Chinese chip design firms, such as Sophgo, whose chips matched those found in the Huawei processor, according to sources. Sophgo’s chips had apparently been intended for Huawei’s AI processor, raising concerns about potential diversions and underscoring the need for rigorous oversight.

Beyond TSMC and Huawei, this latest “is informed” letter signals that the U.S. is broadening its surveillance to ensure that no companies bypass export restrictions. TSMC has informed its Chinese clients that it will suspend shipments of 7-nanometer or below chips intended for AI and GPU uses beginning November 11, according to a report from the Chinese media site Ijiwei. The move will disrupt several Chinese companies’ plans as the U.S. takes further steps to address the transfer of critical technology to China.

The letter to TSMC reflects bipartisan concerns in the U.S. over the effectiveness of current export controls to China. Lawmakers across party lines have repeatedly raised concerns that the Department’s current export control system falls short, with calls for tighter rules and more vigilant enforcement. This issue has received added urgency following revelations last year that Nvidia and AMD were restricted from exporting advanced AI-related chips to China, while key semiconductor equipment makers like Lam Research, Applied Materials, and KLA were barred from selling advanced manufacturing tools to Chinese customers. Following those restrictions, the Department updated its guidelines to apply to a wider range of companies, not just those named in the original letters.

Though the Biden administration drafted new rules to further limit tech exports to China, including plans to add 120 Chinese companies to the restricted entity list, these regulations have faced significant delays. Originally slated for release in August, with tentative publication dates thereafter, the new rules remain stalled. The delays have allowed Chinese companies to continue sourcing advanced semiconductor technology and manufacturing equipment, adding to the pressure on the U.S. government to act quickly in light of Huawei’s recent gains in the AI domain.

TSMC, a major supplier of advanced chips and a “law-abiding company,” has indicated its commitment to complying with all U.S. export controls but refrained from commenting further on the latest Commerce Department order. As it stands, the Commerce Department’s “is informed” letter mechanism allows the U.S. government to bypass lengthy regulatory processes, enabling it to swiftly impose new export restrictions without extensive rule-making.

This intensified approach signals that the U.S. is intent on closing any potential loopholes that Chinese firms might exploit to access advanced AI and GPU technology. However, the ongoing delay in finalizing broader export control regulations may give Chinese tech companies room to maneuver. The effects, which highlight the challenges that companies like TSMC face in navigating U.S.-China trade tensions, are expected to impact China’s semiconductor and AI sectors in the short term.