A serious crisis may be looming as an increasing number of Nigerian youths take to the wide-swing digital currency investment, notwithstanding a financial regulatory restriction the Central Bank of Nigeria (CBN) imposed in February.
The CBN had, in February, banned financial institutions from handling transactions relating to decentralised digital currencies otherwise known as cryptocurrencies, numbering over 4,000 in digital circulation.
Findings by The Guardian show that more youths, leveraging peer-to-peer opportunities, have adopted the relatively new investment window despite the ban. Not even the recent crash that saw Bitcoin, the flagship asset, losing over 50 per cent of its price, has discouraged investors.
Bitcoin has traded between $28,000 and $38,000 in the past weeks. In the height of the bull run, it rose to $68,800 before a sudden tumbling. But Bitcoin, which is considered as the gold in the crypto world, has been fortunate. Some coins (as they are fondly described by enthusiasts) have lost over 70 per cent of their prices.
A meme coin, Shiba Inu, for instance, hit $0.00005 after Binance listing saw it gaining over 2,000 per cent in a few days, had deflated to $0.0000087 as of press time. Komodo similarly tumbled from an all-time high of $4.7 recorded in April to less than a dollar. As at press time, it was trading at $0.6.
Nigerian new adopters, who threw in their savings in April, when the prices hit the roof, are currently biting their fingers. The situation is worse for those who gambled with borrowed funds even at a time, Elon Musk, Telsa founder and biggest supporter of digital currencies, warned that it was “not wise to invest life savings” in the fad.
The number and volume of resources from Nigeria moving into the exchanges have increased tremendously, analytics has suggested. The addicts, who disguise crypto-related transactions to evade sanctions by banks, have continued to increase their holdings while new entrants, including housewives, are being promised that the current crash is normal and momentary.
Data from Usefultulips.org, analytics that tracks trading on LocalBitcoins and Paxful, revealed that the volume of transactions from Nigeria has increased by roughly 50 per cent between February, when the CBN wields its stick, and June.
The two leading exchanges pooled a total of $32.5 million from Nigeria as against $21.9 million realised in February and $18.4 million invested in January. In January 2016, the total investment channeled through the platforms was $6,035 million.
Nigeria sits on the top sub-Saharan African market in terms of growth and volume of investment. Its investment in LocalBitcoins and Paxful in the past year alone stands toweringly at $398.5 million. It is followed by Kenya with $144.5 million investments.
Only Nigeria and South Africa have recorded stable growth in adoption since 2016 while the trend in other early African adopters such as Rwanda, Malawi, Angola and Tanzania are anaemic.
Usefultulips.org’s estimate does capture only naira-denominated transactions while Nigerians outside the country who are said to be among the leading drivers of the investment are obviously excluded. The Guardian was informed that over 70 per cent of young Nigerians in Malaysia, Ghana, South Africa and Europe are addict investors.
In the past few days, a photo of a ‘wanted alive’ Nigerian, said to have vanished with crypto transaction-related N28 million from Malaysia, has been trending on WhatsApp.
The figures captured by the digital platform also exclude activities on Binance, the leading exchange in terms of volume, and others Nigerians also patronise as they seek quick fortune.
Binance was in March last year compelled by the interest from Nigeria to launch P2P trading services for the naira, providing an open platform for users to trade cryptocurrencies using the currency with zero transaction fees on both Binance.com and Binance mobile app. Naira became the first African fiat currency supported on Binance P2P platform.
“We believe that Africa is a blockchain continent. We no longer need to bank the unbanked. We can empower them with cryptocurrency financial services directly. Nigeria is a vibrant innovation hub with a great passion for cryptocurrencies,” CEO of Binance, Changpeng Zhao, said.
At CoinDesk TV’s ‘First Mover’ show in June, CEO Paxful, Ray Youssef, said: “Everyone should have all eyes on Africa right now”, adding that the number of transactions on Paxful in Africa, combined with Google searches primarily from Nigeria, reflect the “tremendous momentum” around cryptocurrency adoption. He concluded that Africa is leading global cryptocurrency adoption.
While the next testimony session tarries for the new adopters, thousands of Nigerians are currently paying the price of the greed and emotion that rule crypto investment. The Guardian was taken into confidence by a trader who had invested N1.5 million meant for a family project without the knowledge of her husband.
“I bought a few coins a neighbour told me had a huge potential. I bought it in April when the prices were very high, yet he assured me that they would appreciate it sooner than I expected and that I would double the money before July (this month) when I would need it. I will be extremely fortunate if I realise 30 per cent of the investment if I liquidate it today. I don’t know what to do,” she narrated.
Indeed, many new investors do not know what to do with the deflated investment. But the experts admonish – “hold don’t sell and if you have spare money buy the dips”. Buying the dip is synonymous with do not panic but expand your portfolio while others dump their assets for fear of more losses. But no single expert knows when the current crash will bottom out, hence those who buy the dips a month ago have suddenly realised they bought at a premium.
JP Morgan and other investment banks, who have attempted to project the market’s next move, do so with utmost probability. A few days ago, JP Morgan projected that the market has exited the bearish mood when Bitcoin regains its plus 50 per cent share of the total market.
Investment experts have labelled the ongoing coin value meltdown as the “great unwind”. Recently, Bitcoin assets experienced a statistical pattern technically described as a death cross as opposed to a golden cross. Death cross, in the investment market, refers to a rare downtrend when an asset’s 50-day moving average (MA) crosses its 200-day MA. Notable death cross events in other markets include the Wall Street Crash of 1929 and the 2008 Financial Crisis.
But experts have differed widely, holding binary positions on the significance of the death cross at this time. Some see it as a blip, a kind of price correction that will mark the beginning of a new rally towards a new high while others think it is the beginning of a long bearish trend.
It is not the first time the assets would suffer immense losses that jitters through the market. Amid the COVID-19 fear last year, Bitcoin lost 61 per cent. In 2018, it lost 84 per cent and 30 per cent in November 2017, while 40 per cent had been wiped two months earlier. As far back as January 2012 when the asset was a few dollars, it lost 43 per cent.
Between then and 2017, it lost at least 80 per cent several times to massive dumping that was only followed by a new high. The strength to rise again after its fall has been a source of consolation to those who have lost hard-earned resources to the pumping and dumping Musk’s entrance brought to the market.
For the ‘gurus’ in Nigeria, USDT, a stable currency at par with the dollar, has become an ally. They buy crypto assets when they think the market is down and convert to stable coin when they sense it will dive again, which has become a regular occurrence, an investor, Chima Okereke, said.
Investigation has also suggested that many youths, who have lost faith in the future of the naira, are swelling their USDT portfolio as an alternative savings window to naira. This culture which is growing very fast with the middle class also signing up on the crypto exchanges for the purpose (saving) may threaten the country’s ability to mobilise savings for investment in the medium- to long term. Stable currencies do not fall or appreciate on the exchanges.
Prof. Ken Ife, a consultant to ECOWAS and other multinational organisations, said Nigerian youths are exploring alternative investments owing to the challenge in the economy.
He admitted the banks would suffer from the fleeing resources but observed that the entire economy would benefit as the investors make more money and liquidate their assets for spending.
“I am not worried about the trend because they will not continue if they are not making money. At some point, the returns on their investment would be repatriated to the country for spending,” Ife noted.
Bitcoin is still banned in Nigeria. However, the CBN has since said that it intends to launch a digital currency soon.
Lagos Assembly moves to end open grazing, considers VAT bill
The Lagos State House of Assembly says the Prohibition of Open Cattle Grazing Bill, when passed will ensure harmonious relationships between herders and farmers in the state.
The assembly made this known after the bill was read on the floor of the house for the second time, by the Acting Clerk, Olalekan Onafeko, at plenary on Monday.
It said the bill would also protect the environment of the state and the South-west zone.
The House also read for the first and second time, the state’s Value Added Tax (VAT) bill, and asked the Committee on Finance, which was handling it to report back on Thursday.
The Speaker of the House, Mudashiru Obasa, who described the Prohibition of Open Cattle Grazing Bill’ as timely, thereafter, committed the bill to the committee on agriculture for public hearing.
The speaker also suggested that the bill should make provision for the registration of herders, and prepare them for ranching.
“Allocating parcel of land is not enough, but there should also be training for those who will go into ranching, as ranching is expensive and requires adequate preparation,” he added.
Concerning the VAT bill, the speaker said it would further lead to an increase in revenue and infrastructural development.
”This is in line with fiscal federalism that we have been talking about,” he said.
Mr Obasa said the VAT law, when passed, would help the state meet challenges in its various sectors.
He also urged the Lagos State government to do everything legally possible, to ensure the judgment of the Federal High Court, Port Harcourt, was sustained even up to the Supreme Court.
The speaker lamented a situation where about N500 billion would be generated from the state, while N300 billion was generated from other South-west states, but paltry amounts would be disbursed to Lagos State in return.
Mr Obasa said it was an opportunity for the state to emphasise again, the need for the consideration of true federalism.
Speaking earlier on the bill on open grazing, Bisi Yusuff (Alimosho 1) lamented that farmers had continuously become afraid to visit their farms, thus causing shortage of food.
Mr Yusuff also said many farmers had become indebted, as they now found it difficult to pay back loans they secured.
His position was supported by Kehinde Joseph (Alimosho 2) who noted that the bill would ensure peaceful coexistence, reduce crime and help to guide the activities of herders.
Olumoh Lukeman (Ajeromi-Ifelodun 1) suggested that the high court should be made to handle cases from enforcement of the bill when passed, or that the state should establish special courts for such purpose.
Also, Gbolahan Yishawu (Eti-Osa 1) expressed support for the bill, noting that it would give a level of security to the state and help reduce economic losses.
He added that Lagos had 250 hectares of land in Ikorodu and another 750 hectares in Epe for ranching.
David Setonji (Badagry II), said: “There was a time we went on oversight function in a school here in Lagos. We were embarrassed by cattle. We had to wait for the herder to move the cattle before we embarked on our oversight function.”
Mr Setonji suggested a collaboration between the Neighbourhood Safety Corps and the police, in the implementation of the law when passed and assented to.
Other lawmakers who contributed during the plenary were Adedamola Kasunmu (Ikeja II), Rasheed Makinde Ifako Ijaiye II), and Sanni Okanlawon (Kosofe I).
Ngige: FG to recover millions wrongly paid to 588 doctors
The federal government says it is planning to recover “millions of naira wrongly paid to 588 medical doctors” across the country.
While fielding questions from state house correspondents, Chris Ngige, minister of labour and employment, said the affected doctors wrongly benefitted from the medical residency training fund meant for a particular category of doctors.
The minister said the names of the doctors were uncovered after a scrutinisation of the 8000 names submitted by chief medical directors of federal government health institutions for the training programme.
Ngige said a substantial amount of the money has been refunded by some of the affected doctors while efforts are being intensified to recover the remaining balance.
He said the delay in making the refund by the affected doctors is holding back the residency fund payment by the government.
“Ministry of health has gotten the list of doctors who supposedly are to benefit from the medical residency training fund,” he said.
“Total submission of about 8000 names were gotten and the ministry of health is scrutinising them.
“We have done the first round of scrutinisation and they will now compare what they have with the Post-Graduate Medical College and the chief medical directors who submitted the names.
“The Association of Resident Doctors, in each of the tertiary centres, worked with the CMDs to produce those names, but now that the names are being verified.
“We discovered that about 2000 names shouldn’t be there because they don’t have what is called Postgraduate Reference Numbers of National Postgraduate Medical College and (or) that of the West African Postgraduate Medical College.
“So, this is it and that is the only thing holding back the residency fund payment because it is there already for incurred expenditure has been done by the finance minister and it’s in the accountant-general’s office.”
“So, once they verify the authenticity of those they are submitting, the Accountant-General will pay.
“We are doing that verification because we do not want what happened last time in 2020 to reoccur.
“In 2020, the submitted names didn’t come through the appropriate source, which is the Postgraduate Medical College and payment was affected and it was discovered that about 588 persons, who were not resident doctors benefited from such money.
“They are now finding it difficult to make the full refund. But they have to refund that money. Some are refunding, but there is no full consideration of the account.
“That account has to be reconciled to enable the accountants pay the next round of funding for 2021.”
The National Association of Resident Doctors (NARD) has been on strike for a month over “irregular payment of salaries”, among other issues.
Efforts by stakeholders, including the national assembly, to mediate between the federal government and the resident doctors have not yielded results.
Insecurity: Kaduna suspends weekly market, bans livestock transportation
The Kaduna State government has suspended trading at the popular weekly Kawo market.
The order on Thursday came days after the government suspended similar markets in five other local government areas of the state.
Kawo market is one of the largest weekly markets in Kaduna North.
It is located in the same area as the Nigerian Defence Academy (NDA), the Hassan Usman Katsina House popularly know as State House and the Legislative Quarters.
According to a statement by the state commissioner of Internal Security and Homeland Affairs, Samuel Aruwan, on Thursday, “the Kawo weekly market which usually holds every Tuesday in Kaduna North LGA has been suspended with immediate effect”.
“The Government of Kaduna State wishes to highlight that the previous directives suspending weekly markets, and selling of petrol in jerrycans in Birnin Gwari, Giwa, Chikun, Igabi and Kajuru LGAs, as well as banning the felling of trees for timber, firewood and charcoal and other commercial purposes in Birnin Gwari, Kachia, Kajuru, Giwa, Chikun, Igabi and Kauru LGAs, are still in force.
“Citizens are hereby informed that all these directives will be vigorously enforced by security agencies.”
Also, the statement said the state government banned the transportation of livestock.
“The ban also prohibits the transportation of livestock into Kaduna state from other states. Both bans take effect immediately, from today 2nd September 2021.
“The government also wishes to reiterate that the transportation of donkeys into the state is a criminal offence and anyone found engaging in this will be prosecuted accordingly.”
Kawo Market ban
Many traders who spoke with news men in Kaduna welcomed the suspension of the weekly Kawo market.
Apart from the larger weekly trading, trading also takes place daily among residents of the neighbourhood.
Danladi Bala, a grain transporter, said the state government’s decision to suspend weekly trading in the market is right.
“Yes, we are traders here, but the recent suspension of weekly markets in other local government areas will make the Kawo market the target for criminal activities. They will all come here. It is a wise decision from the government,” he said.
Hajiya Mama, a trader, also said she was not suprised by the announcement.
“I trade in the market, but in the last two weeks we have been witnessing the influx of traders with large commodities.
“With the closure of weekly markets in Zamfara and other part of the state, this market will be an option for good or bad traders,” she said.
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