Blockchain technology to add $29bln to Nigerias GDP by 2030

Nigeria - By limiting the barriers currently confronting financial inclusion in Nigeria, blockchain technology will contribute no lesser than $29 billion to the country’s Gross Domestic Product (GDP) by 2030, a report by Enhancing Financial Innovation & Access (EFInA) has revealed.

According to a recent statement issued by EFInA Programme Specialist in charge of its Digital Financial Services, Henry Chukwu, the report entitled ‘Potential of Blockchain for Financial Inclusion in Nigeria’ revealed that blockchain has the potential to revolutionise the Nigerian economy as it offers creditable packages that can enhance the possibility of achieving the National Financial Inclusion Strategy of 80 per cent that was set for 2020, but never materialised.

Driving financial inclusion in Nigeria has been highlighted by the Central Bank of Nigeria (CBN) as a key objective. As financial inclusion in Nigeria stands at 64 per cent, falling short of the National Financial Inclusion Strategy of 80% set for 2020, Blockchain technology has the potential to revolutionise the Nigerian economy and increase Nigeria’s GDP by $29 billion by 2030, mainly by instilling trust in business, government transactions, and processes.”

“The report highlights that blockchain-enabled solutions can support progress towards Nigeria’s financial inclusion targets and address some of the key challenges around financial inclusion such as lack of formal ID, high transaction charges, and lack of transparency,” the statement reads in part.

EFInA further stated that blockchain technology, if effectively explored in Nigeria, can create ‘Enabling Identity Management’ and also fast-track access to finance and land titling & registration outside of cryptocurrency, adding that, ‘circulars recently released by Central Bank of Nigeria (CBN) and SEC indicate that blockchain technology is on Nigerian policy makers’ radar as cryptocurrency falls into different categories.

EFInA stressed that due to its potential to support governmental intervention schemes for those in underserved areas and enable efficiency in cross-border remittances, the CBN has announced plans to launch a Central Bank Digital Currency.

“To ensure that the potential of cryptocurrency and blockchain technology is realised in Nigeria, a collaborative effort among multiple stakeholder groups is essential – Regulators, Financial Service Providers, Development Institutions, and Donors /Financial Sector Development organisations. These stakeholder groups must find ways to communicate and collaborate to spur innovation-friendly policies and ensure we take a risk-balanced approach in implementing emerging technology in Nigeria.”

It added that “other countries have leveraged public-private partnerships and adopted blockchain technology to drive inclusion and efficiency in their financial systems. For instance, the South African Reserve Bank, in collaboration with ConsenSys (a fintech) and the national banking community, leveraged blockchain to reduce the transaction processing time by 75 per cent while increasing trust, confidentiality, and scalability in their financial system.”