African Currents

Is Nigeria's Proposed Homegrown Nigerium Blockchain Key to its Data Sovereignty?

To enhance Nigeria's digital independence, the country's National Information Technology Development Agency (NITDA) is considering creating an indigenous blockchain, dubbed "Nigerium," as a domestic alternative for data security to reduce reliance on foreign technology and set the West African nation at the forefront of the global tech scene.
Sputnik
Nigeria’s interest in blockchain technology, particularly in Nigerium, holds potential benefits, such as improving accountability and limiting the likelihood of financial malfeasance in governance. However, its success depends on effective execution and a strong regulatory framework; without these, such an initiative may falter, notes Deborah Ojengbede, co-founder at AFEN Blockchain Group and 2022 Winner of Women in Web3 and Blockchain Technology, Nigeria.

"So in terms of the potential [...] it ['Nigerium'] makes sense because what drives a blockchain is the use case. For instance, budget monitoring becomes very easy. I mean, you can't hide or manipulate transactions on the blockchain. So that in itself aids adequate recordkeeping and reduces fraud within the government. But what I will say, that the blockchain in itself will not bring about data protection and will not bring about national security and all that by itself. It has to be backed with efficient frameworks and regulatory policies that are guiding its application," Ojengbede says.

John Oladipo, a Blockchain Expert and Senior Partner, Chayfield Law Practice, Nigeria, highlights how Nigerium could stimulate the local economy, improve service delivery, foster international and domestic financial inclusion and innovation, elaborating on sector-specific implementations and non-financial use cases of blockchain.

"Leveraging, blockchain's transparency and immutability, let's just assume "Nigerium," can enhance government's efficiency, and more improved service delivery [...]. This potential domestic solution can also foster a vibrant startup ecosystem in Nigeria, which can also lead to job creation and technological advancement [...]. Financial inclusion can be increased through offline transactions and agent networks [...]. Blockchain technology's non-financial use cases include securing patient records and managing supply chains," Oladipo says.

Although digital currencies are seen as a potential alternative, they face major obstacles and restrictions in replacing the US dollar’s predominant position in international trade, especially for developing nations like Nigeria, contends Professor Kehinde A. Adetiloye, an Associate Professor in the Department of Banking and Finance at Covenant University, Nigeria.

"The dollar is performing several functions, not just one, two, three. There are about four, five of them that dollar performs, and so until it becomes difficult for de-dollarization to be completely achieved [...]. So the issue we have on ground is such that the digital currencies that are in space right now, they are not under the control of these developing countries. Developing countries don't have so much assets in them. We are just players and fringe players at that level. And because of that, the capacity to influence things, to move things in our favor with the use of digital currencies is extremely limited," notes Adetiloye.

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