In a significant escalation of its efforts to curb illegality in the financial sector, Nigeria has turned its focus towards Binance, the world’s largest cryptocurrency exchange platform.

Last month, the authorities had restricted the platform’s services as part of its crackdown on digital currency transactions. This move was followed by the extended detention of two high-ranking Binance executives.

A report from the Financial Times reveals that Nigerian authorities are aggressively pursuing detailed information from Binance, including data on the platform’s top 100 users within the country and comprehensive transaction histories spanning the past six months. These demands form a crucial component of ongoing negotiations between the government and Binance, with officials citing concerns about the exchange’s impact on the stability of the national currency, the naira.

The specified timeframe of the past six months assumes heightened significance against the backdrop of Nigeria’s recent currency devaluation, underscoring the urgency with which authorities are seeking to address perceived threats to financial stability.

Additionally, documents obtained by the Financial Times indicate that Nigeria’s national security adviser’s office is pressing Binance to settle any outstanding tax obligations, reflecting the government’s multifaceted approach to regulating the cryptocurrency sector.

The intensified scrutiny of Binance comes amidst Nigeria’s most severe economic crisis in three decades, prompting policymakers to take decisive action to restore confidence in the national currency. Last month, authorities implemented restrictions on web access to cryptocurrency exchanges and detained the two senior Binance executives who had traveled to Abuja for discussions related to regulatory compliance.

The detained executives, identified as Nadeem Anjarwalla and Tigran Gambaryan, play integral roles in Binance’s operations across Africa. Nadeem, a UK citizen, serves as the regional manager for Africa at Binance, while Tigran, a former US Internal Revenue Service special agent, heads Binance’s financial crime compliance department.

Held in custody at a guest house in Abuja adjacent to the national security adviser’s office, both executives had their phones and passports confiscated upon detention, with initial contact only established a week later on March 5.

Binance has issued a statement affirming its collaboration with Nigerian authorities to facilitate the safe return of the detained executives to their families.

“While it is inappropriate for us to comment on the substance of the claims at this time, we can say that we are working collaboratively with Nigerian authorities to bring Nadeem and Tigran back home to their families,” the exchange said in a statement.

Their detention is in line with broader government efforts to stabilize the naira and mitigate perceived risks associated with cryptocurrency transactions.

A court order granting Nigeria’s anti-corruption agency permission to detain the Binance executives for 14 days expired on Tuesday, with a scheduled hearing regarding a potential extension postponed until Wednesday, according to the FT. This delay prolongs the uncertainty surrounding the fate of the executives, further complicating ongoing negotiations between authorities and Binance.

Bayo Onanuga, a special adviser to the Nigerian government, who had earlier accused Binance of negatively impacting the country’s economy and proposed a $10bn fine, said the two men were “cooperating” with Nigerian authorities and providing a “lot of information.”

“Let’s allow law enforcement agencies space and time to undertake their work. Outcomes will be made public in due course,” the office of the National Security Adviser told the FT.

The unfolding situation underpins Nigeria’s growing assertiveness in addressing challenges posed by cryptocurrency platforms. Olayemi Cardoso, Nigeria’s central bank governor, has raised concerns about the significant flow of funds through Binance, amounting to approximately $26 billion over the past year.

However, many believe that Binance is being scapegoated and that the government’s actions may likely deter foreign investors.

“I’m sure there was a lot of currency speculation going on on Binance,” said one tech entrepreneur familiar with the matter. “But that’s like blaming the messenger. All Binance did was facilitate peer-to-peer transactions without determining the price people were willing to pay.”

Despite mounting international concerns and frustrations expressed by the families of the detained executives, Nigerian officials remain steadfast in their quest to extract the said information from Binance.

Response from the families of the detainees indicates that their governments are not doing enough for their freedom. However, a statement from the British Foreign Office said, “We are supporting a British man detained in Nigeria and are in contact with the local authorities,” while the US Embassy in Abuja told the FT it was aware of “reports of detention of a US citizen” and that the State Department always works to “provide all appropriate assistance.”

Nigeria is on the cusp of re-entering the international debt market with its first Eurobond issuance since 2022, Bloomberg has reported, citing people with knowledge of the matter.

The nation has enlisted the advisory services of investment banking giants such as Citibank NA, Goldman Sachs, and JPMorgan Chase & Co. for this endeavor, marking a significant move in its financial strategy.

According to Bloomberg’s report, the size of the auction to be carried out before June is yet to be determined. Nigeria’s last international debt market foray was in March 2022, when it raised $1.25 billion through a seven-year Eurobond issuance. Sources close to the deal revealed that Nigeria has also hired Standard Chartered Bank and Lagos-based Chapel Hill Denham as advisors.

Nigeria faces a Eurobond maturity next year amounting to $1.2 billion, in addition to over $1.0 billion typically used annually to service external obligations. Bloomberg’s analysis indicates that Nigeria is not alone in its pursuit of Eurobond issuances; countries like Angola, South Africa, and Gabon are also expected to tap into the international debt market.

The recent Firstbank Weekly Eurobond Commentary noted, “Sentiment around the market is that Nigeria is set to issue a new Eurobond in the second quarter,” indicating positive expectations for Nigeria’s participation in the global bond market.

The commentary further observed, “The yield hunt is back as bond spree lures risk takers to Africa,” reflecting the resurgence of investor appetite for African assets amidst shifting global interest rate dynamics.

Recent debt sales in Africa show how investors are increasingly interested in African Eurobonds, driven partially by the prospect of interest-rate cuts in the US.

However, concerns loom over the recent US inflation report at 3.2 percent in February from 3.1 percent in January, which might influence the Federal Reserve’s stance on cutting rates. This could potentially impact global market dynamics in the near future.

Federal Reserve Chair, Jay Powell’s recent remarks regarding potential interest rate adjustments have reverberated across global markets, including those in Africa. The anticipation of rate cuts in the United States has prompted positive market reactions.

“Our Angola, Egypt, Ghana, and Nigeria curves have all opened positively off the back of those dovish remarks,” the commentary notes.

Potential Impacts on SMEs

Economic experts said the impending Eurobond issuance by Nigeria and other African nations could have notable implications for Small and Medium Enterprises (SMEs) operating within these economies. As these governments seek to raise capital through international debt markets, there is a potential trickle-down effect on the domestic financial ecosystem.

They believe that increased investor confidence resulting from successful Eurobond issuances may bolster overall economic stability, thereby fostering a conducive environment for SME growth and investment. Additionally, improved access to global capital markets could offer SMEs expanded financing opportunities, enabling them to expand operations, invest in technology, and enhance productivity.

However, they warn that SMEs must remain vigilant amidst changing market dynamics, including potential fluctuations in currency exchange rates and interest rates. Prudent financial management practices and strategic planning will be crucial for SMEs to navigate any challenges and capitalize on the opportunities presented by their respective countries’ Eurobond issuances, they note.

Former President Muhammadu Buhari has heaped praise on his successor, President Bola Ahmed Tinubu, commending him for his performance despite the challenging circumstances Nigeria faces.

Buhari offered Tinubu the praises during a visit from the Comptroller-General of Customs, Bashir Adewale Adeniyi, and members of the Nigeria Customs Service management team in Daura, Katsina State, acknowledging the difficulties of governing Nigeria, a nation he described as “complex.”

“I thank you very much for coming. I very much appreciate it. I thought Tinubu has done very well,” Buhari remarked, expressing his gratitude for the visit. “Nigeria is so complex. Really, there isn’t much anybody can do.”

The former president’s comments come amidst widespread criticism of some of President Tinubu’s economic policies, including the controversial removal of fuel subsidies and the unification of exchange rate windows. These measures have sparked galloping inflation, economic hardship, and depreciation of the naira, leading to public protests.

Addressing Adeniyi and his team, Buhari urged Nigerians to endure the economic challenges and support the current administration’s policies and programs. He noted the complexity of governing Nigeria and the limited options available to leaders in managing the nation’s affairs.

Adeniyi, in response, thanked Buhari for his support of the Nigeria Customs Service Act 2023, which expanded the authority of the agency to implement revenue-generating policies and facilitate trade, contributing to Nigeria’s economic growth.

During his visit, Adeniyi also discussed President Tinubu’s directives regarding seized trucks carrying food items at the border, indicating a shift in policy to return the goods to traders for circulation in Nigerian markets.

This is not the first time Buhari has spoken about the challenges of governing Nigeria. In November 2023, he remarked during an interview with the Nigerian Television Authority that Nigerians are demanding and monitoring leaders closely, making governance a constant struggle.

Call for Senate Probe of N30 Trillion Ways and Means Loans

Meanwhile, civil society organizations have called on the Senate to investigate the N30 trillion Ways and Means loans obtained by the Central Bank of Nigeria (CBN) during Buhari’s administration. The Senate recently inaugurated an ad hoc committee tasked with probing the utilization of these funds, as well as the Anchor Borrowers’ Programme.

“Ways and Means is a loan facility through which the CBN finances the government’s budget shortfalls,” noted Senate President Godswill Akpabio during the inauguration of the committee. He emphasized the need for the probe, highlighting its focus on investigating the utilization of Ways and Means loans and the Anchor Borrowers’ Programme.

Civil society leaders, including Comrade Emmanuel Onwubiko, the National Coordinator of the Human Rights Writers Association of Nigeria (HURIWA), called for the former president’s involvement in the investigation. Onwubiko stressed the importance of obtaining information from Buhari regarding the economic policies implemented during his tenure.

“If the 10th Senate still feels that there are certain information that they are yet to get about that transaction, then they can invite the immediate past President (Buhari) to provide all the information that he has about that evil monetary policy that destroyed the national economy of Nigeria in no small way,” Onwubiko said in an interview with Daily Trust.

Malam Auwal Musa Rafsanjani, Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC) and Transparency International-Nigeria (TI-Nigeria), echoed the call for Buhari’s involvement, highlighting the challenges of holding former presidents accountable in Nigeria’s political landscape.

“In a serious democracy, former President can be invited to clarify and answer questions about his or her role in running the country under his or her leadership,” Rafsanjani emphasized.

Comrade Ibrahim M. Zikirullahi, Executive Director of the Resource Centre for Human Rights and Civic Education (CHRICED), emphasized the need for accountability and transparency in governance, expressing skepticism about the Senate’s willingness to hold former presidents accountable.

“In a more rational society that upholds the rule of law, it would be appropriate to request the presence of former President Buhari to explain his actions,” Zikirullahi stated.

Despite the calls for accountability, past experiences suggest that former presidents in Nigeria often evade scrutiny, raising doubts about the effectiveness of the Senate’s probe committee and its ability to address public concerns regarding the utilization of public funds.