The recent signing on of Bitts, Inc. as technical partner to the Central Bank of Nigeria, ahead of the launch of Nigeria’s cryptocurrency, e-Naira, raises very fundamental questions as to the determination or will, on part of the leadership of Nigeria, to lend some urgency to the country’s transformation process.
There is a strong and ongoing advocacy by government, and even amplified by the Governor of the Central Bank of Nigeria, for enhanced patronage of “Made in Nigeria goods,” to support the Naira and reduce the demand for foreign exchange. There has also been a robust campaign for affirmative action in local content development, especially in the oil and gas sector of Nigeria’s economy.
What has been obviously lacking is a broadly accepted framework for harmonizing these sterling objectives into a shared policy of government, and the policy “batsman-ship” required for monitoring adherence and ensuring non-violation, says Dr. Graham Hart, a public affairs analyst.
The economics is simple: For a market of about 200 million people which is largely import dependent, the more of the money (expenditure – both public and private) you can keep at home, the stronger your economy will become, and the more jobs you can create.
Now, the challenge of strategy – how to ensure that expenditures by Nigerians circulate at least three or more times within the economy, before it travels overseas.
This is precisely where the mandates exercisable by the National Planning Commission (NPC) and the Bureau for Public Procurement (BPP) are called to effect.
National economic strategy comprises a vision of a desired future state of the economy, a time frame within which that state is to be achieved, and a set of policies and institutions for influencing the mobilization and allocation of resources and for promoting their efficient utilization.
As with firm strategy, the vision provides the frame of reference for establishing priorities for the mobilization of resources as well as the fractions to be allocated across various product markets. Also like firm strategy, national economic strategies are articulated and implemented through institutions.
The structure and culture of these institutions determine in considerable measure how the strategy will be implemented as well as its potential effectiveness.
A vision helps establish goals that in turn animate an economic strategy.
Though nascent compared to FinTech ecosystems globally, the Nigerian FinTech industry is maturing at an exponential pace, according to a report on the Nigerian FinTech landscape titled, “Nigeria FinTech Census 2020: Profiling and defining the fintech sector.”
This growth of the sector is reflected in the profile of the firms, the breadth of coverage, the increasing level of global connection and rising levels of profitability. It is estimated that Nigeria’s FinTech revenues will reach $543 million by 2022, driven by increasing smartphone penetration and the unbanked populations.
In 2019, Nigeria officially recognized its first FinTech unicorn, with Interswitch achieving a valuation of $1 billion based on a $200 million investment from VISA. Following shortly in 2020, Stripe, a US-based financial services company, agreed to buy Paystack in a $200 million deal, just five years after Paystack was launched.
The local fintech industry is already on the growth curve. All the Central Bank of Nigeria needed to do was just plug-in, and amplify the velocity of growth, through the e-Naira cryptocurrency. But, the faith, in the local industry, is obviously lacking, and, with that, national progress is abridged.
This vacation of will is not limited to the Central Bank of Nigeria, or the financial services sector of the Nigerian economy, for that matter. It is endemic in the construction industry also, where foreign contractors are preferred, with no real efforts invested in grooming local ones. It is pervading in the educational, healthcare, tourism, and even sports sectors. The problem is simple: a lack of faith in the nation, deriving, perhaps, from a “post-colonial traumatic disorder.”
The solution, however, must be sought within the realm of “institutional culture reawakening,” facilitated through a joint mandate stimulus of the National Planning Commission (NPC) and the Bureau for Public Procurement (BPP).
The Act setting up the National Planning Commission mandates the Commission to provide policy advice to the President in particular and Nigeria in general, on all spheres of national life. The NPC is required to mobilize popular group and institutional consensus in support of Government policies and programmes.
On its part, the Bureau for Public Procurement (BPP) governs the entire procurement processes of all institutions of the Government of the Nigerian Federation as well as those of the Nigerian nation. It is invested with the responsibility of seeking value for money to support national growth and development. Beautifully directed, as written.
Under the Public Procurement Regulations for Goods and Works 2007, a “Certificate of No Objection” or a waiver – both of which are issued by BPP – are required to validate every public procurement in Nigeria. “Certificate of No Objection” is a document evidencing and authenticating that due process and the letters of the Public Procurement Act have been followed in the conduct of a procurement proceeding and allowing for the procurement entity to enter into contract or effect payments to contractors or suppliers from the Treasury.
Nigeria needs a new thinking – a fresh mentation – different in cast of thought and scale of values from that influence by colonial education. A new goal will have to be set, and a new culture enshrined and cultivated.
What is the goal or vision? To keep as much of Nigeria’s expenditure as possible, within Nigeria. And, if it must go abroad, to ensure that it circulates richly within the economy, first.
And the culture? To execute the “a la carte” implementation strategy, as opposed to a “buffet” regime.
While it may be more convenient to pay for and consume buffets, they do eat deeply into pockets, over time, and some of the times they do not meet the consumer’s enlightened needs or taste. Assembling the ingredients to make food at home could be tasking, but it does pay off richly, through better nourishment for the entire household, and cheaper costs, in the longer run.
If such a policy goal or vision had been put in place by Nigeria’s presidency, through the NPC, and the gates manned by BPP re-enforced, the Central Bank of Nigeria would not have had to travel to the Caribbean to hire Messrs. Bitt Inc. – tested and proven as it were – for its Project Giant, as the Nigerian CBDC pilot is known.
The CBN would have been compelled to spend, perhaps, longer time, more energy and money to launch out the e-Naira, in collaboration with Nigeria’s Fintech private sector players, and in that process creating more value for the economy, while deepening the nation’s systemic capacity. That extra task, is what nation building demands.
Such a policy vision will foster the accelerator and multiplier effects necessary for economy advancement and development. The multiplier effect concerns the reinvestment of profit appropriated from a major public expenditure in Nigeria. The re-investment of accumulated profit into an economy helps the economy to move very fast and to generate new profits. The ability of re-invested profit to bring out new profit is referred to as multiplier effect.
Just a little more faith in Nigeria; this time, from its leaders. That’s we ask.