The sudden decision of the Central Bank of Nigeria (CBN) to redesign naira notes, which has generated a lot of interest in the country, appears to be pushing the embattled currency further down.

On Saturday, the naira spiraled to its lowest fall, hitting N800/$1 in the parallel market – a development attributed to spike in naira to dollar exchange by those who have naira stockpiles.

The CBN announced on Wednesday that it has redesigned N200, N500 and N1,000 notes, adding that all existing currencies will cease to be legal tender from January 2023.

The move, which was quietly carried out, is understood to be a plan by the federal government to deny terrorists, kidnappers and corrupt public office holders the opportunity to spend their illicit funds stockpiled outside the banks.

The Economic and Financial Crimes Commission (EFCC), which described the move as “a well-considered and timely response”, has been urged to work with banks to arrest and prosecute those who will deposit huge funds they can’t defend within the period stipulated by the CBN for the old naira notes to be returned to banks.

However, while the move has been applauded by a large section of Nigerians, there is concern that it will further stoke inflation as those caught in the trap will continue to run to Bureau De Change (BDC) operators to buy dollars with their ill-gotten naira.

Reports indicate that politicians are approaching BDC operators, offering them mouth-watering deals, to convert their stockpiled naira to foreign currencies before the six-week window given by the CBN closes. This means that Nigeria’s FX market is going to experience more strains that will push the naira spiraling downwards.

The central bank governor, Godwin Emefiele, who expressed optimism that the redesign of the naira notes will help tame inflation, said on Wednesday that much of the currency in circulation is outside the banks.

“To be more specific, as at the end of September 2022, available data at the CBN indicate that N2.73 Trillion out of the N3.23 trillion currency in circulation, was outside the vaults of commercial banks across the country, and supposedly held by the public. Evidently, currency in circulation has more than doubled since 2015; rising fromN1.46 trillion in December 2015 to N3.23 trillion in September 2022,” he said.

Against this backdrop, the naira has kept weakening against the dollar, pushing inflation, which stood at 20.7% as at September, further up. The CBN’s attempt to tame it with the naira’s redesign is backfiring.

On Friday, soon after the central bank announced that President Muhammadu Buhari had approved the plan to redesign the naira notes, the currency crashed to N785 against the dollar. Falling further to N800/$1 on Saturday indicates that the naira redesign may cause more harm than good for Nigeria’s economy.

The International Monetary Fund (IMF), on Friday urged Nigeria to apply caution in its plan to redesign and replace naira notes as missteps will undermine confidence in the financial system.

If you look at the 2000-year plot of the gross world product (aggregate of all GDPs), you will see a big  acceleration around 1790. There was a reason that happened. In a piece in Harvard, I called it the inflection point when some parts of the world moved from invention society to innovation society.

Breaking the components, one thing was super-evident: Samuel Hopkins had been awarded the first US patent in 1790, opening a new age to own intellectual properties just like lands. That changed America because merchants, among the richest people in the era, could now give inventors money to commercialize ideas because that investment is now protected. Yes, the risk had been reduced through the exclusivity window.

From my work which was published in my book which received the IGI Global “Book of the Year” award (see here  ), I noted that until nations transmute into that new era, through improved legal ordinances and systems, advancement will stall. 

Nigeria is working on that path – here are the major tech regulations for the year 2022.

It was in 2010, I woke up and my professors were congratulating me that a book I wrote had won the IGI Global “Book of the Year” award. This announcement changed many things. Find a way to #win something

As the year 2022 enters its last quarter, it is important to take stock of the several developments that have occurred so far towards the regulation of Technology in Nigeria in the absence of a dedicated piece of legislation. Largely, regulatory technology is very catalytic and important as technology continues to reshape markets and economies.

This article will focus on highlighting the most important pieces of legislation and Regulatory Framework development that has so far taken place this year in Nigeria. 

These developments are as follows:-

1. The passing into law of the Nigerian Start-up Bill:- This has led to the introduction of the Nigerian Start-up Act that has finally constituted the first piece of legislation focused on the registration and operation of Start-ups in Nigeria, followed by the introduction of many incentives for techpreneurs across the country.

2. The introduction of the Central Bank of Nigeria CBN Guidelines on Cyber-security for Other Financial Institutions (OFIs) in Nigeria:- The CBN is responsible for the first piece of legislation focused on the issue of Cyber-security for Other Financial Institutions in the light of a rather very high incidence of cyber-financial crimes across all levels of the Fintech sector in Nigeria. 

One major introduction of these guidelines is the Regulatory requirement for all OFIs to have appointed Chief Information Security Officers (CISOs) .

4. The introduction of digital companies based outside Nigeria now being subject to Income Tax obligations :- This is pursuant to the provisions of the new Finance Act 2022 which empowers the Federal Inland Revenue Service FIRS to tax such companies on a deemed profit basis.
5. The creation of the Nigerian Data Protection Bureau (NDPB) :- The NDPB now exists as the replacement for the defunct National Information Technology Development Agency (NITDA) by virtue of its establishment in the first quarter of 2022.

What this now means is that the NDPB now has overall Regulatory jurisdiction over everything related to Data Protection Compliance in Nigeria.

5. The introduction by the Central Bank of Nigeria CBN of the Guidelines on Open Banking in Nigeria :- Open Banking is a service concept that emphasizes the excuses of a borderless and free-flowing river of end-user data that is based on the concepts of End-user consent to the access this end-user data pool as well as the use of Application Programming Interface (API) agreements.

The guidelines also provide for the creation of a CBN Open Banking Registry (OBR) for the purpose of more focused Regulatory monitoring by regulators.

6. The introduction of the jurisdiction of the Securities and Exchange Commission (SEC) over digital asset platforms from licensing to post licensing operation :- This has led to the provision of new Cryptocurrency service business licenses that are :-

a). Digital Asset Exchanges(DAX)

b). Digital Asset Offerings Providers (DAOP)

c). Digital Asset Custodians (DACs)

d). Virtual Asset Service Providers (VASPs)

7. The full subjection of Insurtech service providers, particularly Insurance Web Aggregators, under the Regulatory jurisdiction of the National Insurance Commission (NAICOM).

8. The provision for online protection of copyrights :- This is by virtue of a soon-to-be-passed Copyright Bill, giving the Nigerian Copyright Commission (NCC) to restrict pubic access to Digital platforms suspected of Copyright infringement.

9. The blocking of Mobile Payment & Telecommunications access to Digital Lending firms in Nigeria :- This was carried out by the Federal Government through the Federal Competition and Consumer Protection Commission FCCPC which, as a result of several Data Protection violations by Digital lenders, decided effective from the 19th of August,2022  to carry out certain Regulatory measures.

The most notable of such measures was the development by the inter-agency Joint Regulatory & Enforcement Task Force of a Limited Interim Regulatory/Registration Framework & Guidelines For Digital Lending 2022 .

As a result of this, Telecommunications companies &  Payment Service Providers (PSPs) among others have been warned to cease  & desist server/hosting or other main services to lenders that are the focus of investigations related to sharp business practices.