OECD report: Nigerian crypto ban harmed its economy
Africa is the youngest continent with a great economic potential, but it is yet to start exploiting it.
A recent report by the OECD on the economic power of the African cities paid a particular attention to the situation of young people and their role in the economy. It appears that, instead of being an advantage that most older regions would envy, a big percentage of youth in the overall population is a problem, and one of the reasons for this are inadequate policies.
The report speaks about a “Waithood”, a prolonged period of suspension, in which young people’s access to social adulthood is delayed or denied because of the socio-economic inequalities and the “inherent hostility” to informality. So what do these young people do, when they cannot get a job in a bank? The report speaks then of a youth-led innovation and youth-led protests.
Youth entrepreneurs make up an important segment of the micro, small and medium enterprise sectors, and a big part of these enterprises are tech-oriented: creating apps, managing social media… and trading crypto, which becomes an increasingly important part of the tech world. They also contribute to positive socio-economic changes, being more likely to hire their peers, both men and women (which usually have trouble working in the corporate sector, where company policies on marriage and child-bearing are often penalizing).
Unfortunately, African policymakers appear to be totally disconnected from the youth and its aspirations, and far too often they impede a promising activity.
Taking the example of Nigeria, the report concludes that Nigerian Central Bank banning financial institutions from processing any transactions involving crypto last February was harmful for the country in many ways:
❌ it has halted investments into the Nigerian fintech sector,
❌ it has pushed young crypto entrepreneurs into a legally uncertain area,
❌ it has stripped the country of crypto companies’ taxes.
The overall crypto popularity in Nigeria was not hindered by the ban: the Nigerians are still among the world’s most active crypto users, all while the eNaira, the Nigerian CBDC, is struggling to find use cases.
The ban, however, impeded the “white” economic development of the crypto sector, and redirected the crypto VC money towards crypto-friendlier countries.
Once again African youth has been denied the possibility to sit at the adults’ table. That’s a shame, and we do hope that African policymakers will wake up to acknowledge the immense potential it carries, even if it takes an OECD to point that out.
