There may be light at the end of the tunnel for the growth and adoption of the cryptospace in Nigeria, with recent legal developments identifying digital assets falling under the watchful eyes of the taxman.
Before he left office on May 28th, 2023, former President signed the 2023 finance bill into law.
The law includes a 10% tax on digital asset gains.
This came after comments from Zainab Ahmed, the former minister of finance, budget and national planning, who indicated the same.
While it’s a broad shift from the government’s formerly hawkish stance towards anything crypto, government agencies are yet to “put the word out” so to speak, and give directives regarding digital assets.
We spoke with Saviour Anyanwu, founder at Simmillustra Limited and a seasoned developer who gave us his thoughts on what to expect next from the government and more.
Nigeria might just become the next crypto haven!
Saviour Anyanwu, Founder at Simmillustra Limited
E-Crypto News:
What are the implications of including digital assets in Nigeria’s financial reform bill?
The government is always looking for a way to manage digital assets and create internal revenue for the country.
On the positive side, its acknowledgment will help the country develop faster and allow blockchain developers to exploit those opportunities.
Of course, there is tax.
Again, it will provide opportunities for the government and the populace to participate in developing blockchain ecosystems.
You can’t tax something that you aren’t giving forward-leaning to. I think it’s a welcome development. Even though the tax thing is there (that’s what governments do). With taxation, this will compel the government to encourage the development of the blockchain {and digital asset} space.
E-Crypto News:
Why do you think agencies and institutions such as Nigeria’s Securities Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) haven’t published regulatory approvals to reflect these changes?
Legislation is always catching up with new developments. I believe they need to study and understand {digital assets}.
You can’t legislate and regulate something you don’t fully understand. Blockchain technology and crypto is still something of a mystery to a lot of our top government officials.
I believe they are taking time to study and understand, so they can come up with something that will not encourage the industry’s development on one side and hamper it on the other end.
I think that with time they will come on board. Legislation and implementation are always slow.
E-Crypto News:
What has been the impact of Nigeria’s crypto ban?
You see, every ban has gaps.
Nigeria as a country would have benefited greatly from crypto if they had allowed the cryptospace to flourish and given incentives to young developers to build. The ban has a ripple effect when it comes to trading cryptocurrencies. Revenues that could have come into the country are no longer coming. Meanwhile, those who are still dealing in crypto do it from the backdoor.
This is, of course, a loss to the country. You see, that has affected an industry that could have grown and developed. Then again, Nigeria is a country that catches up fast. I believe with the lifting of the ban, positive things can now occur.
Related: The Many Implications of the Nigerian Cryptocurrency Ban
E-Crypto News:
How have young people (especially Gen Z) responded to the ban?
One thing about this generation is that they do what they want (what they have in mind).
You can’t bottle them up.
Nigerians are still carrying on with their activities irrespective of the ban. You will find out that many of the crypto projects and companies have moved away from our shores. This generation is a generation that will always find a way out. You can’t bottle them. It is the way they have been designed and empowered. When it comes to technology and the internet, you can’t hold them back. You can only manage them. They are just people you can’t stop. I think, Gen Z just do their thing, regardless of the ban or not.
E-Crypto News:
In what ways can crypto, blockchain, and Web3 technologies solve Nigeria’s problems? Please, can you provide examples?
There are many ways crypto can solve Nigerian problems. For example, what House Africa is doing: Solving Land Registry problems using blockchain technology. In Nigeria, you can purchase a piece of land and later find out ten people have bought it. And all of them have legitimate documents!
That leaves you wondering: “Is this a human error or what?”. There are many applications, but this is a clear example of how we solve real estate problems. House Africa is one use case in a critical sector. You can buy real estate, know where it is, and won’t get shortchanged by anyone (the seller, developer, or agent).
You can always visit your property. You know the direction. We back everything with a blockchain-powered application where no one has the power to manipulate anything. I believe many other use cases will come in with the lifting of the ban. We should be able to have more blockchain-powered applications contributing to the economy.
E-Crypto News:
What do you think the government needs to do to encourage the e-Naira’s adoption?
The government needs to bring all stakeholders on board and encourage the youth to experiment. Not everyone wants to be bottled or held back. They can bring in all the stakeholders and key players and encourage them. The public will be able to see that the e-Naira is not a bad thing. They will see it is good for the country. The government can now leverage its popularity and find other use cases of blockchain technology and crypto that will be beneficial.
You can’t fight something outside in. You have to be inside the house, see how everything works and bring a technology-oriented solution that people will buy into.
If the government doesn’t work with the stakeholders, Nigerians will always suspect the government.
Related:What Role Do CBDCs Play in Cryptocurrency Adoption? We Talk to the Experts
E-Crypto News:
Why didn’t the e-Naira take off as planned? What are your thoughts about this?
The government needs to participate with the people. Blockchain and related technologies aren’t mysterious. The people who will use these solutions don’t trust them yet.
My grandma, for example, still believes in cash!
She doesn’t even believe in saving money in her bank account. There are a lot of Nigerians in that space. They believe in seeing their money where it is.
For example, take a look at the last currency redesign situation. The problems and frustrations we all faced increased the people’s suspicion of the government.
The government is not carrying the people along. You need to carry the people along. The process needs to be transparent and excellent.
When people participate in the process, they see what’s happening, understand it, and can follow.
The e-Naira is supposed to be flexible. I should be able to convert my e-Naira to regular Naira easily. Not just in one direction. The flexibility and stakeholder participation will enable the e-Naira’s adoption. You can’t coerce people. They become suspicious when that occurs. When they are a part of the process, they see and comprehend. They flow. It’s a relationship, not an imposition.
People still have rights. This is from my perspective.
The e-Naira hasn’t gained traction because Nigerians are suspicious of it.
E-Crypto News:
Are there any crypto or blockchain projects you are currently involved in at the moment?
Sure!
There’s the House Africa project and its digital land registry for private property owners. We intend to solve problems in Nigeria’s real estate industry.
There are a few other use cases. “Lutrics IoT” leverages blockchain technology to manage power. You will be able to manage your power consumption via the supply unit. We have the”Okwu Eco” waste management system which helps in recycling and more. “Gonnana” uses blockchain technology to solve Nigeria’s food problems. Farmers can digitize their products and sell them directly to end users. They also have records of farm inputs and more which can then be used to give them access to loans and other support services.
E-Crypto News:
Why do you think the Nigerian government has a crypto/blockchain phobia?
“Phobia” is on a lighter note. I think the slowness to agreeing and approving anything crypto or blockchain-related is tied to understanding.
If they can bring all the key players in the blockchain industry, they will be able to understand how these things work and will be able to encourage effective participation.
We just had the startup bill. The government brought in stakeholders, and you can see that the startups got harmonized, and we are happy with it. The bill, if implemented fully, will give Nigeria traction in the shortest space of time.
I believe their “phobia” or hesitation is because they don’t fully understand it. If you understand something, you will be able to play around it.
E-Crypto News:
How can Nigerian developers take their place in the global crypto/blockchain community?
We are already there!
There are many projects under development as we speak. Many solutions are powered by Nigerians.
There are many of us doing wonderful stuff out there.
All we need is for the government to give us the required push. Things will happen very quickly. They will also benefit because we will create jobs. The projects will create income and will cut down the current “skill exportation” that is eroding our talent pool.
E-Crypto News:
What are your plans this summer per crypto?
There are a few things I want to lay my hands on. With the current approval in place, there are a few projects I can get into. With some research, I can look into the tourist sector, what blockchain technology can do, and see how we can empower tourism in our local spaces, probably with Augmented Reality (AR). With my holiday, I can begin some side projects and see how it plays out.
E-Crypto News:
How did you get involved with the cryptospace?
I’m a developer! People are always bringing stuff.
In my free time, I meet other developers, and I hear them come up with their crazy ideas. I have to provide input. I am mandated to have an understanding of how these technologies work.
That way, I can mentor other developers and give advice. Like in these projects I participate in. I can contribute. As a developer, I must get involved with technology to understand it.
That way, I will explain it to anyone in the development cycle to make the best use of whatever technologies are deployed.
E-Crypto News:
Do you have any “crystal ball” predictions regarding the growth and development of the crypto/blockchain space in Nigeria?
Nigeria is a great economy, so you can expect the best. You should expect us to lead the space in the next three to five years. Nigerians are excellent people, hard-working people. We are very creative and innovative. If you run a Google search on crypto projects, you will see that Nigerians are thinking. I hope it doesn’t stop with the bill. With a little government backing, Nigeria will become a one-stop shop for blockchain and crypto-related solutions. I am very optimistic about our country. This country has great talent. We are going to lead the space. We have the market. We have the manpower.
With a little investment from the government, we are all good!
