Controversy is brewing over Nigeria’s eNaira project scheduled for launch in October 1, next month.
Bitt Inc., the Fintech company, engaged by the Central Bank of Nigeria (CBN) as the Technical Partner for its digital currency project, is a company of no more three staff and a lower market capitalization compared to any of Nigeria’s major Fintech companies, industry experts conversant with the project have claimed.
The experts have expressed concerns over missed opportunities to further strengthen the value of Nigeria’s burgeoning Fintech ecosystem, reduce the country’s undue exposure to FOREX and enhance the value of the naira struggling against major currencies. They want the relevant authorities to look more closely at the contract.
Since signing the deal, they claimed the Caribbean based firm has increased its staff strength to six. Bitt Inc., operates in a market with a population of less than one million people (less than 0.5% of Nigeria’s). The total population of the Eastern Caribbean Currency Union is 634,393 people.
Abuja based Fintech analyst, Abu Idris writes: “With an abundance of indigenous online payment processing platforms and over 30 Fintech companies, Nigeria has the talent, expertise, experience, working models, and capacity to develop the eNaira, or an Africa wide eCurrency, locally and in a manner that incubates and enhances our national income, honour, and dignity.
“The CBN needs a paradigm shift to appreciate the development of the eNaira is not a “contract” but a human and societal development opportunity.”
Many experts want the National Information Technology Development Agency (NITDA ) to consider if the CBN eNaira contract meets the strict compliance to IT procurement processes.
By law, MDAs are under obligation to seek clearance from the NITDA before embarking on any IT project as enshrined in Section 6 of the NITDA Act, 2007, as well as Service-wide Circular from the Office of the Secretary to the Government of the Federation which makes the agency the clearing house for all IT procurement in the public sector.
“We demand an explanation for the decision of the CBN to engage a foreign company that has no pedigree compared to dozens of our indigenous Fintech. This is sheer capital flight,” said Lagos based Fintech expert, Adedoja Olawale.
Development of eNaira should not be a “contract” but human development opportunity for Nigeria
By Idris Abu
On 30 August 2021 the Central Bank of Nigeria (CBN) announced the appointment of Bitt Inc as technical partner for the eNaira Project.
Bitt Inc is a provider of Blockchain based payments platform based in Barbados (founded in 2013), that has received a total funding of $8.5 million and has a total of three (3) employees.
Part of the justification of Bitts Inc is its extensive work in developing a CBDC is the Eastern Caribbean Currency Union. We must view this in the context that:
- The Eastern Caribbean Currency Union is a development of the Organization of Eastern Caribbean States, this organization is composed of Antigua (population 97,929) and Barbuda (population 1,634), Dominica (population 72,189), Grenada (population 113,056), St. Kitts and Nevis (population 53,635), St. Lucia (population 184,600), and St. Vincent and the Grenadines (population 111,350).
- Total population of the Eastern Caribbean Currency Union is 634,393 people.
- The population of Mushin Local Government Area is estimated to be 1,754,600, almost three times that of all the nations that make up the Eastern Caribbean Currency Union.
As Ndubuisi Ekekwe notes “Digital currency is not yet a mature technology, so it punctures the argument of competence and experience, you are not building a product that will compete with the world’s finest, it’s a national product, so if we cannot experiment and even make mistakes on that, where else can such be entertained? The speed of launch is self-inflicted, nobody gave the CBN an ultimatum on when to launch, so we have the leeway to build and perfect, before setting out for public adoption……. we are talking about relatively new technology for the public, funded by the government, it offers us the best opportunities to test our capabilities, unfortunately the CBN couldn’t practise what they preach.”
Ndubuisi further notes that “you cannot be fighting for Naira in the forex market when we continue to import technical partnership in areas Nigerian companies and Nigerian people can be given opportunities. It is not only factories that must source raw materials internally, CBN and government agencies have obligations to do so.”
Nigeria has cutting edge financial technology development and implementation firms like:
- Precise Financial Systems (founded 1992) with a client base spanning thirty-seven (37) countries including Nigeria’s current National Automated Clearing System (NACS);
- SystemSpecs Nigeria (founded 1992) with clients across Africa, is the firm behind Remita, the preeminent payment platform in Nigeria and used by government to drive its most successful financial policy and operational tool, the Treasury Single Account (TSA);
- Mines (founded 2014), now called “migo” provides a Credit-as-a-Service digital platform that enables institutions in emerging markets to offer credit products to their customers, with no smartphones or banks accounts required raised US$13m Series A round funding in 2018;
- Nigerian Fintech “Unicorn’s” (start-up company with a value of over $1 billion) like Flutterwave (founded 2016) and OPay (launched 2018);
- Many Blockchain focused firms as noted in the 2018 article titled “Top 5 Bitcoin and Blockchain Start-ups in Nigeria”; plus,
- our talented diaspora.
Recent reports that the CBN plans to acquire a stake in Bitt Inc., its preferred eNaira implementation partner compounds the incoherence. Ironically the CBN already has, an acclaimed functioning collaborative financial implementation model, the Nigeria Inter-Bank Settlement System Plc (NIBSS) incorporated in 1993 and commenced operations in 1994. NIBSS is owned by all licensed banks including the Central Bank of Nigeria (CBN) as Chair. CBN can adapt this model to leverage the capabilities of Nigerian licensed FinTech’s and Banks to build upon their insights and expertise while leveraging their market clout and financial base to develop and implement the eNaira. As noted by Francis Oguaju “While it’s imperative to buy local rice, use local cement, wear local fabrics, it’s also very much imperative to use locally sourced talents and technologies where it matters most.”
With an abundance of indigenous online payment processing platforms and over 30 Fintech companies, Nigeria has the talent, expertise, experience, working models, and capacity to develop the eNaira, or an Africa wide eCurrency, locally and in a manner that incubates and enhances our national income, honour, and dignity. The experience garnered in developing the eNaira will place Nigeria’s Fintech’s in good stead to subsequently export their products and services, in the best interest of Nigeria and wellbeing of her people. Government and the CBN have a duty, and must be seen, to place Nigeria and Nigerians first.
Why do we do this to ourselves? This is about development not just growth, a heap of trash can grow but it will not help in development. Our leader must appreciate that our nations greatness is advanced by what we must learn during the journey, not just from the outcome. We can do much better if people in positions of leadership take broader strategic perspectives that factor the opportunities to develop our society in a manner ensures survivability of our economy, people, and nation. The CBN needs a paradigm shift to appreciate the development of the eNaira is not a “contract” but a human and societal development opportunity. Indigenous processes, home-grown value chains, domestication of capacities are essential, after all is a country still a nation state if it cannot locally develop and produce its own money, especially in the digital era?
Idris Abu. A, Abuja, 08 September 2021.