Crypto usage growing further in Nigeria

Cryptocurrency usage is growing in Nigeria as Africa's largest economy grapples with a weakening currency and soaring inflation, New York-based blockchain research firm Chainalysis said in a report on Tuesday.

Nigeria's volume of crypto transactions grew 9% year-over-year to $56.7 billion between July 2022 and June 2023. In Uganda, crypto use is smaller but growing fast, rising 245% to $1.6 billion in the same period, while its use in Kenya fell more than a half to $8.4 billion, the report said.

In Nigeria, interest in bitcoin and stablecoins - crypto tokens whose monetary value is pegged to a stable asset to protect from wild volatility - increased when the naira's value plunged, particularly during the most extreme drops in June and July of 2023, Chainalysis said.

The currency weakened to record lows after President Bola Tinubu embarked on some of the boldest reforms that Nigeria has seen in years, including scrapping a popular but costly petrol subsidy and removing some exchange rate restrictions.

"People are constantly looking for opportunities to hedge against the devaluation of the naira and the persistent economic decline since COVID," Moyo Sodipo, co-founder of Nigeria-based cryptocurrency exchange Busha, said in a statement shared with the report.

Nigeria barred its banks and financial institutions from dealing in or facilitating transactions in cryptocurrencies in 2021.

Last year, the country's financial regulator published a set of regulations for digital assets, signalling Africa's most populous country was trying to find a middle ground between an outright ban on crypto assets and their unregulated use.

Nigeria's young, tech-savvy population has eagerly adopted cryptocurrencies, for example using peer-to-peer trading offered by crypto exchanges to avoid the financial sector ban. 

By Anait Miridzhanian, Reuters

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President Tinubu tells UN he seeks to restore democratic order in Niger

Nigerian President Bola Tinubu said on Tuesday he was seeking to re-establish constitutional order to address political and economic problems in neighboring Niger following a July coup and welcomed any support for the process.

Tinubu is chairman of the main West African bloc ECOWAS, which has been trying to negotiate with the Niger military junta. ECOWAS has said it is ready to deploy troops to restore constitutional order if diplomatic efforts fail.

In a speech at the United Nations General Assembly in New York, Tinubu assailed military coups, which have swept through West Africa in the past few years and are sometimes cheered by citizens.

"The wave crossing parts of Africa does not demonstrate favor towards coups. It is a demand for solutions to perennial problems," Tinubu said.

"Regarding Niger, we are negotiating with the military leaders. As chairman of ECOWAS, I seek to help re-establish democratic governance in a manner that addresses the political and economic challenges confronting that nation, including the violent extremists who seek to foment instability in our region."

The decision by ECOWAS in August to activate a so-called standby force for a possible intervention has raised fears of an escalation that could further destabilize the insurgency-torn Sahel region.

The junta in Niger last month ordered its armed forces to go on highest alert, citing an increased threat of attack.

By Felix Onuah, Reuters

Nigeria looks to strenghten economic ties with South Africa

Nigeria's President Bola Tinubu held talks with South African President Cyril Ramaphosa in New York, seeking to advance economic cooperation between the two largest economies in Africa, his spokesperson said on Monday.

The two African leaders met ahead of the United Nations General Assembly that is scheduled to start this week, they said in a joint statement.

"We can collaborate in a mutually beneficial way that enriches our populations," Tinubu said, adding that both countries can cooperate in the mining and telecommunications industries to help "deliver jobs".

Tinubu has embarked on Nigeria's boldest reforms in decades, scrapping a popular but expensive petrol subsidy and lifting foreign exchange trading curbs. He has pledged to revive an economy struggling with record debt, anaemic growth and double-digit inflation.

President Ramaphosa hailed Tinubu's "brave" economic reforms and pledged that South Africa will explore greater partnership with Nigeria.

"We are two major economies on our continent, and it is important that we deepen economic ties, particularly in light of the African Continental Free Trade Agreement," Ramaphosa said .

"We would love to see Nigeria and South Africa working closely together on a number of issues because whenever we join hands, we have made an impact globally through those joint positions," he said.

Tinubu also urged South Africa to join Nigeria in a call for reforms of global finance institutions to help Africa combat rising poverty and economic woes.

"We must join hands and agree that International Finance Institutions require reform as Africa is not to be a ground for economic scavenging any longer, but it is a place with gifted people that is ready for investment and cooperation," Tinubu said.

Tinubu, attending his first U.N. General Assembly as Nigeria's president, is also scheduled to meet U.S. President Joe Biden and executives from Microsoft, Meta and Exxon Mobil in New York in a drive to mobilize global capital to develop infrastructure. 

By Felix Onuah, Reuters

US Treasury Secretary Adeyemo urges Nigeria to fight corruption

U.S. Deputy Treasury Secretary Wally Adeyemo on Monday urged Nigeria to work to stabilize its currency and fight corruption to unlock what he called the "unrealized opportunity" of Africa's most populous country.

Adeyemo, who emigrated from Nigeria to the United States as a child, is visiting Nigeria through Tuesday to underscore the Biden administration's commitment to deepening economic and trade ties with African countries.

His trip comes as Nigeria’s new president, Bola Tinubu, adopts reforms to revive the country's economy and is part of a broader push by U.S. President Joe Biden to strengthen ties and offer African countries an alternative to Chinese and Russian investment and trade.

"Your economic success is not only important to the approximately 200 million people who call Nigeria home, it is important to the region, the continent and the global economy," Adeyemo said in a speech at Lagos Business School.

The visit by Adeyemo, the highest-ranking member of the African diaspora in the Biden administration, comes after visits to the continent by other top officials, including Treasury Secretary Janet Yellen and Vice President Kamala Harris.

Adeyemo said Nigeria could attract more foreign direct investment if it accelerated efforts to stabilize the nation's currency, the naira, and revamped its fiscal policies to end fuel subsidies and invest more in digital infrastructure, education and a strong small business environment.

Rooting out corruption, including by moving more licensing and other government functions online, would also fight skepticism and boost digital entrepreneurship, he said.

Adeyemo also called for steps to shore up the integrity of the Nigeria's banks and reduce the ability of "criminals, terrorists and others" to launder money through the Nigerian financial system. Washington stands ready to help Tinubu's government tackle challenges in this area, he added.

"The opportunity has never been greater," he said. "Your government is pursuing difficult and bold reforms. The United States looks forward to being a partner as you build an economy that works for all Nigerians."

By Andrea Shalal, Reuters

Power being restored to Nigeria after nationwide blackouts

Nigeria's electricity distribution companies reported "a total system collapse" on Thursday after a fire on a major transmission line, causing widespread blackouts across Africa's biggest economy, before power slowly started to return.

Adebayo Adelabu, minister for power, said fire had caused an explosion on a transmission line connecting the Kainji and Jebba power plants in north central Niger state, tripping the grid.

"The fire has been fully arrested and over half of the connections are now up and the rest will be fully restored in no time," Adelabu said in a statement.

Power generation fell to zero in the early hours but had risen to 1,341 megawatts (MW) by 1400 GMT, still well below the daily average of 4,100 MW, data from the Transmission Company of Nigeria (TCN) showed.

TCN did not respond to a request for comment.

Grid power is erratic in Nigeria, a major oil and gas producer, forcing households and businesses including oil firms and manufacturers to resort to diesel and petrol generators.

"The cost of fuelling a generator is eating into our finances and, as a tech business that relies on power, this is a heavy burden to bear," said Dickcion Bolodeku, an executive at technology firm Bayelsa Tech Hub in the southern oil-producing Bayelsa state, noting that President Bola Tinubu removed a subsidy on fuel in May.

In Lagos, despite enduring power cuts on an almost daily basis, some people were surprised at the nationwide blackout.

Lagos-based Eko Electricity Distribution Company, one of the biggest, said grid power was being restored.

The grid collapsed at least four times in 2022, which authorities blamed on technical problems.

Nigeria has 12,500 MW of installed capacity but produces about a quarter of that.

By Macdonald Dzirutwe, Reuters

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