ANGRY Nigerians have come hard on the Central Bank of Nigeria (CBN) for ditching local fintech firms and outsourcing its centralised eNaira crypto project to Barbados-based BITT Incorporated.
The choice of the foreign firm has been described as paying lip service to its slogan of ‘Buy Naija to grow the naira,’ which has been promoted by the apex bank.
The Nigerian apex bank had, last week, announced that the eNaira -its e-wallet project – would be a recognised legal tender in the latter part of the year. This has informed its choice of a foreign tech firm to undertake the e-wallet project.
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The apex bank also revealed that the e-currency project, tagged ‘Project Giant,’ would be used by the country for cross-border trade, accelerated financial inclusion, cheaper and faster remittance inflow and easier targeted social interventions.
It also noted that it planned to improve its monetary policy effectiveness, boost the payment system and also for tax collection purposes.
Following the choice of a foreign firm for the project, financial analysts have queried the apex bank on the issue despite its slogan on buying Nigerian products to grow the local currency, naira.
“One would have assumed that the Central Bank of Nigeria that preaches ‘Buy Nigerian’ would have selected a local firm as a partner and saved Naira. That would have boosted the local FINTECH economy,” said Economist and Financial Expert Kalu Aja in reaction to the development.
In a series of questions to the apex bank, the financial expert asked whether the CBN invited Nigerian developers to bid for the entire project.
“A combination of Interswitch and Flutterwave cannot lead a local consortium to develop eNaira? Was TSA not developed locally in Nigeria?” Ajah asked.
“You think China or India will give Yuan to a foreigner? I hope it’s reversed,” he said.
According to him, “If Nollywood was a contract, it would have been awarded to a foreign company to build.
“Go to the United States or the United Kingdom and bid for a legacy as a foreigner and see. It’s insulting that an e-wallet contract cannot be awarded to a Nigerian owned or run firm.”
Social Activist and a Deputy Director at ActionAid Ene Obi told The ICIR that handing over the project to a foreign firm would expose it to security risks.
She wondered why the apex bank struggling on the management of scarce foreign exchange would spend dollars on a foreign tech firm when there were several local fintech companies in the country.
“Every nation sticks to its best when it comes to human capital projects such as this. Why neglect the young fintech entrepreneurs.
“Why not challenge them? This has a lot to do with how we think about the future and treat young people. The world is about technology and we must train and focus on young people to build the future on tech.”
Despite being described as the global new oil, the journey between the fintech and the apex bank has not been smooth.
According to McKinsey & Company, between 2014 and 2019, “Nigeria’s bustling fintech scene raised more than $600 million in funding, attracting 25 percent ($122 million) of the $491.6 million raised by African tech startups in 2019 alone—second only to Kenya, which attracted $149 million.”
Analysts say the sector is still relatively young but offers several opportunities owing to the financially-excluded population, estimated by the National Bureau of Statistics (NBS) at 36 per cent in 2020.
Financial Analyst Uwagbale Edward-Ekpu expressed concern that the apex bank could go for a foreign tech firm instead of a local firm.
“Central Bank doesn’t work with Nigerian techies to develop its digital currency, e-naira, instead chose to do it with Barbadian startup and techies. Bitt is a Barbadian-grown company founded by Barbadians, Gabriel Abed and Oliver Gale. The CBN is not helping the Nigerian tech industry,” he said.
The apex bank has been at daggers-drawn with fintech firms, with the CBN securing a court order to freeze operations of techs in the country.
Associate Consultant for the British Department for International Development (DFID) Celestine Okeke told The ICIR that operating ecosystem had been one of the major problems of most small and medium enterprise innovators in Nigeria.
“The ecosystem businesses and entrepreneurs operate in has been a major challenge over time. Nigerian small-scale businesses’ key challenge is not access to the finance but an operating ecosystem, and harsh enabling environment.
“For instance, have the CBN and FINTEC firms or the Presidency come up with any committee to accelerate fintech development in Nigeria? This committee should be the one to look at areas of conflict between the CBN and tech companies on how the indusry wants to advance its development.”
Also, Tech Expert Riby Abayomi told The ICIR that despite the shortfalls of the tech firms, there ought to be a fintech desk in the CBN to study their contributions to the economy for wealth creation in the economy.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.