Report: Nigeria Has Low Foreign Crypto Investments
- Nigerians believe the CBN’s ban on crypto transactions has discouraged foreign investments.
- Nigerians have shown interest in blockchain technology, but no state has leveraged that to attract foreign businesses.
Despite being one of Africa’s largest economies and a crypto hub on the continent, Nigeria pales when it comes to foreign crypto investments, a new study shows. The National Bureau of Statistics (NBS), in a recent report, revealed that foreign direct investment (FDI) in Nigeria dropped by 33% in 2022.
The decline was mostly caused by a shortage of dollars, which prevented foreign crypto companies from investing in the nation. Investment decreased from $698 million for the year 2021 to $468 million in 2022. The numbers show that FDI has declined by about 90% since 2008 when it peaked at $4.7 billion.
The use of cryptocurrencies in Nigeria has increased in recent years. Some residents in the West African nation rely on crypto for remittances and as a store of value. Nigeria also ranked eighth out of 154 nations in Chainalysis‘ 2020 Cryptocurrency Geography Report for acceptance and usage of cryptocurrencies. Although this level of adoption should have spurred foreign crypto companies to invest, the outcome has been different.
Some Nigerian crypto users believe the low rate of foreign investment in the country can be linked to the lack of widespread use of cryptocurrency. A greater percentage of Nigerians do not use cryptocurrency in daily commerce. Furthermore, the Central Bank of Nigeria’s ban on crypto trading also serves as a deterrent.
However, other Nigerians blamed states within the country for the lack of foreign investments in the crypto sector. Some noted that Nigerians had developed an interest in fintech and blockchain technology. Yet, there has not been a coordinated effort from any state to leverage this interest and attract foreign investments.
There’s yet to be any sign that Nigeria will relax its rule against crypto. It remains to be seen if the country’s President-elect Bola Ahmed Tinubu will pave the way for the mainstream adoption of crypto in Nigeria.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
