by Nnamdi Odumody

Nnewi, a town in Anambra, South Eastern Nigeria is famous for the enterprising spirit of its inhabitants which has earned them fame as one of Africa’s cities with a high per capita of millionaires and multimillionaires  in dollars.

Spend time with an Arochukwu/Ohafia (Abia) or Nnewi (Anambra) boy under apprenticeship and see the level of dedication. They build their masters and their masters make them.

Today, Nnewi is the most industrious tribe in Africa and has the largest concentration of millionaires per capita. A land where secondary school dropouts control factories and empires. While we celebrate the founder of Innoson Motors [never attended any university] for establishing the largest indigenous auto plant in Nigeria, he would continue to celebrate his masters.

The town is home to the biggest cluster for automotive industries in Nigeria as most of its entrepreneurs are involved in the production and other activities along the value chain. But in comparison with other global auto clusters, Nnewi doesn’t fare all and this can be attributed to lack of support from the government in provision of infrastructure and other things which can make the city globally competitive.

Recently, a lawmaker representing Nnewi North and South Federal Constituency, Hon Chris Azubogu, in conjunction with the National Automotive Design and Development Council has begun the development of an Industrial Park in Nnewi South which will be the new home of the automakers based in the ancient community.

On completion, the Anambra State Government should partner with the Federal Government to make the industrial park a Special Economic Zone (SEZ).

A special economic zone is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country’s national borders, and their aims include increased trade balance, employment, increased investment, job creation and effective administration.

This is important as some of the parts used in the production of vehicles and other automotive systems in the Nnewi cluster are imported from foreign countries. Doing the SEZ will attract companies from across the globe with supply chain services tailored for vehicle manufacturers, to set up shop in the industrial park, and in the process aid the local players to integrate world class design and production.  As the virtuoso circle happens, Nnewi will produce vehicles which will cope with the demands of domestic and foreign consumers of the 21^st century.

Also, software designers will flock to the zone to aid the local manufacturers with the creation of intelligent vehicles. This will lead to enormous job creation for the youth and contribute significantly to the GDP of the state and nation. Largely, making Nnewi a SEZ for automobile sector is urgently needed.

The Innoson Motors Vision, Building Africa’s Largest Indigenous Car Company

I have been an advocate of a cryptocurrency that will be pegged to the Naira over what we largely have today where entities (usually outside Nigeria) “create” currencies with no regulatory control. So, I am not a fan of Bitcoin because mining equilibrium is not clearly distributed but rather concentrated in the hands of those with technological supremacy. I recommend NairaCoin to be pegged to the Naira as a crypto vehicle for Nigerian commerce for those interested in that new domain.

There is a very deep conversation which is going on LinkedIn since I wrote that the Nigerian government can indeed regulate cryptocurrencies like Bitcoin. As I noted, my preference is for the government to create our own cryptocurrency, NairaCoin, and tie its value to the Naira. I have a reason for that.

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Yet, you can put your blockchain-contract in Naira, but since this is digitized architecture, my suggestion is to simply create a Nigerian cryptocurrency backed by the Central Bank of Nigeria so that Nigeria has its cryptocurrency (NairaCoin) which is tied to the Naira. That will make blockchain contracts more efficient. The NairaCoin will maintain exchange rates with Bitcoin and others, just as paper Naira has with U.S. Dollars and Euro, while making sure that the paper Naira and NairaCoin are always correlated.

That thinking is now new: stablecoins are engineered for that. Yes, you create cryptos and you peg them to a traditional currency like US dollars. What is new is that banks are getting into the game: “JPMorgan Chase is the first major U.S. bank to create its own cryptocurrency… JPM Coin, a dollar-pegged cryptocurrency, or “stablecoin,” intended to help big clients—like corporations, banks, and broker-dealers—settle up international payments, securities transactions, and treasury services…”, Fortune newsletter summarizes.

JPM Coin is a brilliant idea which will enable smooth operation of any blockchain architecture within JPM domain. Unlike the amalgam of many cryptos like Bitcoin, Ethereum, etc, the megabank now has one crypto defined and under its control, so that clients can see certainty and visibility when settling payments, securities and treasuring services.

The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called “JPM Coin,” the digital token created by engineers at the New York-based bank to instantly settle payments between clients.

J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, move to the blockchain. That’s the database technology made famous by its first application, bitcoin. But in order for that future to happen, the bank needed a way to transfer money at the dizzying speed that those smart contracts closed, rather than relying on old technology like wire transfers.

It fixes one major challenge I have with Bitcoin: regulation. To make many things legal, most firms will still put Naira and Dollars in their blockchain-anchored contracts. I have argued that unless Nigeria has recognized cryptos, contracts based on them could be voidable in courts. So, largely, I tell people to ensure the numbers are in Naira, or any traditional global concurrency, because Nigeria is yet to test the validity of crypto-only contracts in court.

So while the world likes blockchain, making it to work cannot decouple the fact that you need to be sure that any contract therein can stand in courts. If a nation does not recognize Bitcoin, are you at risk on trusting it to set the basis of payment? Possibly, as before the law was updated, email documents were not admissible in Nigerian courts.

Yes, there used to be a time when in Nigeria, banks would not accept scanned documents sent via emails. The same happened in European Union where publishers required hardcopies, not digital (e.g. scanned copies via emails), copyright transfers before they would publish academic papers. Those requirements have since evolved.

But with JPM Coin-inspired model, a bank in Nigeria can have a blockchain system that runs on its crypto for settlement, as its customers can still operate in Naira knowing that the technology will handle the equivalency, even as transaction fees drop, due to productivity gains that blockchain makes possible. Because say Access Coin (for Access Bank), has no value different from Naira, it does not introduce any risk like Bitcoin and cousins.

JPM Coin will unlock new markets for the big bank. Nigerian banks should make a local version for the Nigerian market. Then, entrepreneurs in this space should then pursue the universal local one: NairaCoin fully pegged to the Naira.

Towards Nigeria’s NairaCoin with Central Bank Support

As a student, visited the lab where they invented GPS (yes, satellite navigation). The Applied Physics Lab of the Johns Hopkins University is one of the most eminent labs in the world. Without APL, we may not have Intel Corp as Gordon Moore spent time in the lab before he left to co-found Intel. Of course, without Intel, you may not be reading this note, as microprocessors created by Intel largely enabled Bill Gates to invent the Personal Computing (PC) industry via Microsoft. The rest is history: before Windows, computing was largely an enterprise machine, designed for offices and not homes for personal uses.

I had gone to meet a researcher in APL on a paper he wrote about making circuits that could survive extreme radiation expected in the space environment. I had read about matter and antimatter annihilation while in FUTO as an undergraduate student. I was just curious on the possibilities of creating such designs.

(The ways such circuits are designed are totally different from the ways typical circuits used in consumer electronics are engineered. Also the manufacturing process is different. They are extremely reliable and also overly expensive, and never built for huge mass production. Mainly, the markets are mainly military and governments.)

So, when I read today that NASA has officially pronounced Opportunity rover dead, my mind went to that moment. NASA engineers have frozen attempts to communicate with Oppy after more than 1,000 radio signals went unanswered. Oppy did great – discovered water and drove over 45 km, more than any other machine on Mars for the 15 earth years it lived there.

After falling silent eight months ago during a severe dust storm that swept across the Red Planet, NASA’s Mars Opportunity rover has been officially declared dead.

NASA made the announcement Wednesday during an emotional media briefing at the space agency’s Jet Propulsion Laboratory in Pasadena, California. The agency said it had ended its efforts to communicate with Opportunity after sending more than 1,000 radio signals its way, including some just last night.

“I was there yesterday and I was there with the team as these commands went out into the deep sky, and I learned this morning that we had not heard back,” Thomas Zurbuchen, associate administrator of NASA’s Science Mission Directorate, said in the briefing. “Opportunity remains silent.”

But the news is what killed Oppy. It was not radiation which NASA handled by making radiation-hardened circuits and manufacturing systems. It was not energy flash from matter-antimatter annihilation. Oppy died when an unprecedented dust storm covered its solar panels, robbing it of power. That was it – once that happened, it became a piece of sand! Every electronics without power is nothing but sand (yes, silica). I am not sure any NASA model had expected dust to be the killer of Oppy just as the designers of Titanic never expected the iceberg to bring the heralded unsinkable ship to sink.

What is your business black swan?

Nigeria’s Gray Lizard; America’s Black Swan

UPDATE

NB: The debate on LinkedIn posits that Oppy case is not a good example of black swan since it lived well enough beyond the originally expected 90 earth days. Yet, while in business, a 150-year company can still experience black swan if it did not plan for a very rare risk scenario, which eventually happens. Nonetheless, I want to add this update.

Lehman Brothers lived long enough (more than 150 years) before it went into bankruptcy and planned for the thing that killed it, but it did not plan deep enough. My thinking on Oppy was NASA knew there was a dust storm risk but they did not plan for the “unprecedented” one that took the life of Oppy.

 It is a sound engineering principle: you have spent $400m to build a machine and covered 99% of the risk. But if the 1% remaining risk happens, you go with it. Of course, you can fix it but doing so will be expensive and complex. Perhaps, it could have made Oppy an Incredible Hulk to rise from a dust storm within hours while battery was still alive!

Yes, possibly, Lehman Brothers knew it could go down if what happened in 2007 should happen but avoiding it would have been extremely challenging. Black Swan does not mean absence of knowing the risk and most times few can fix that risk if presented with options to do so ahead. “Unprecedented” dusk storm is a black swan which rarely occurs (I reasoned) but for Oppy it happened.

Of course I could have gotten it all wrong – that is why I have this update.