INTERNATIONAL BUSINESS

Nigeria’s Cryptocurrencies Ban: A Serious Call For Concern By Alex Agbo


The way governments wake up and take decisions in Africa is a call for serious concern. Major economic decisions which would in the short run no achieve anything, and would be absolutely catastrophic in the long run, are the darlings of African governments.Then the reasons are even worse. Where it is inexplicably watery, they resort to stiff necked grandstanding. It would appear to an observer that African leaders are bigger than their country. Even the law the swear to protect is disregarded. Sometimes you find some disastrous economic decisions that would make all of us look like a couple of playing kids. For instance, in the year 2020 , starting from March, there was a lockdown in Nigeria due to Covid-19. The first thing any serious people would do would have been to put in place measures to cushion the effects of the lockdown because many workers and their families couldn’t have access to basic essential resources. But trust us, we went the opposite way. That was when we thought it fit to declare all borders closed. We suddenly realised that the world would end if we didn’t start producing our own rice immediately. Trust me, Nigeria can provide you with comic relief. Immediately that border closure was declared, I knew that nothing would be achieved. Nigeria can make a prophet out of any keen observer who has watched its impulsive and whimsical policies for a decade.Like a prophet, I told my colleagues that it would achieve almost nothing because no serious thought went into the border closure before it was implemented. The reason given by the government for the border closure was even more ridiculous. A whole range of essential products were ticked off and summarily banned. And during a lockdown! One of the things that pained the people was the ban on rice. Then over night locally produced rice sprang up. Social media vuvuzelas of the government started revealing us with stories of how locally produced rice was more nutritious than imported rice. One Sunday,  during the lockdown, my rice got finished and I wanted to eat rice. I quickly strolled to the nearest retail shop to buy rice. For a start I bought just a derica cup. As always, I was already suspicious of our locally produced rice. I came home and gave my wife to cook. Believe me,  that was the worst thing I ever tasted in my life. Even with the chicken stew, it was insipid, stony and worthless. How could you make that kind of worthless thing a substitute for its foreign competition and not be a joker? No wonder smuggling thrived and still thrives! This put a lot of pressure on the Naira, prices went up. Given the stickiness of prices downward in unorganised markets like ours, prices stayed up. The inflation hit double digits. In that same period the government increased value added tax to 7.5% and expected by some miracles that prices would not be high.In a period where people lost their jobs, inflation is high and they are all locked down, a government still decided to increase tax rates. How callous! These set of afflictions combined to wiped off people’s purchasing power. No wonder Nigeria is the world’s poverty capital.Nigerians, like their counterparts across the world decided that they’d join the digital world, even though the government had been having some inexplicable pains over how the world is becoming a digital place. They quickly found a way to join the race for cryptocurrencies.  At least, no be government get this on, they thought.One of Africa’s biggest trade partners, China, has legalised the use of cryptocurrencies by Africa for trade. The reason being that Africa has very weak currencies. And the traders do not need all the hassles of conversion etc. Phone manufacturers in China have started accepting digital currency for their sales. Other countries seeing the potentials of cryptocurrencies, have started having thoughts of finding a way to legalise it. One of them is Russia. The Russian government is seriously considering making it a parallel currency. This decision has passed through parliamentary debates once or twice where the pros and cons were weighed. Although countries have warned citizens that they could lose their investments in one fell swoop because of the volatility of cryptocurrencies and incidences of fraud because of the inability to identify the trading partner, the trade in cryptocurrencies has continued to grow. And then one morning, like every policy, it was banned in Nigeria for nebulous reasons. One of the reasons given by the government was that it is used by fraudsters to do money laundering. Should we also ban the Naira because it is being laundered?In a digital world, this same government, like what the primitive government of Uganda did, has always nursed the idea of banning the social media. It is a serious call for concern that we seem to be racing back into underdevelopment.  We are averse to anything that seems to link us to the outside world. Nigeria should realise that we cannot afford to be isolated. 

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