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(英)ナイジェリアのフィンテック分野と仮想通貨への欲求の高まり

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Fintech is a booming sector in Nigeria. How and why is such a sector thriving in a country with double-digit inflation? What is the role of cryptocurrency in this success and how is it going to change after the recent ban by the central bank?

The lack of access to banking has led to the success of mobile money across Sub Saharan Africa. This has laid the foundation for the African fintech sector. Nigeria is now home to over 200 fintech startup companies.These startups raised over 1B$ in the last 5 years making Nigeria the largest fintech market in SSA. The lack of trust in the local currency, the Naira, the difference in Forex rates provided by the banks and the black market, the high transaction costs for remittances and the high inflation (Naira lost 24%against the dollar in 2020) has driven the growth of the sector. Nigerians have generally used dollars only for remittances, transnational transactions and online transactions.

Accordingly, the most successful startups as well as the bulk of funding has been going into payment solutions:

  • Flutterwave, a global payment company, raised170M USD in its last round in March 21. Flutterwave grew by providing virtualUSD debit cards for online payments to Nigerian consumers.
  • Interswitch, another payment company, became a unicorn after receiving a 200MUSD investment from VISA in 2019.

Remittance has also been a strong sector as overseas. Nigerians have looked for convenience and affordability to send money home.Several startups inc. Chipper cash, Flux, Afriex or Stellar have also received significant fundings recently.

Dollars, however, have become more difficult to access within Nigeria. With the Naira losing value people have hoarded dollars while the regulated banking sector restricted outlays in dollars reducing its liquidity further. The scarce dollar has thus lost its traction and people have turned to cryptocurrency for remittance and transactions due to their increased availability.

Over $400 million were transacted in cryptocurrencies inNigeria in 2020 and Nigeria now ranks as the 3rd largest country in transaction volume behind the US and Russia. Bitcoin is being used to exchange for Naira and remit money.It has also been used recently to finance the civil society groups backing the demonstrations against police violence during the protests of October 2020, as well as to raise funds by politicians in opposition to the current government. It is not clear whether its decision was linked to the association of cryptocurrency with the financing of government critical organizations, but the Central Bank of Nigeria promptly issued a ban on crypto and issued a ruling to stop all transactions involving crypto on February 5.

Such is the appetite for crypto that the market has quickly adapted to the ban with transactions now moving to P2P networks to work around the ruling and fintech startups are following suit. The convenience, speed and affordability of crypto currency is here to stay.

Inflation in Angola, Ethiopia & Nigeria from 2014 to2019, Worldbank

EIS Insight

Bitcoin and crypto currencies have proven their value for Nigerians.Nigeria is not the only country in Africa facing issues with their local currency and the lack of liquidity of dollars. Angola, Ethiopia, as well as Zimbabwe, South Soudan, Somalia (data not shown above) are facing the same issues and crypto are also gaining traction in these countries. While Bitcoin is primarily a savings and speculative asset in developed economies, could it gain its real “currency” status in Africa?

Reference

  1. McKinsey & Company
  2. Premium Times
  3. Forbes
  4. Fintech Global
  5. Photo credit: AiAfrica, The World Bank

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