In a move to enhance national security and safeguard citizens’ data, the National Information Technology Development Agency (NITDA) has announced plans to develop an indigenous blockchain technology, aptly named “Nigerium.”
This initiative comes in response to concerns over the control exerted by foreign developers on popular blockchain platforms like Ethereum, which may not prioritize Nigeria’s interests.
NITDA’s Director General, Kashifu Abdullahi, highlighted the strategic importance of this project during a meeting with delegates from the University of Hertfordshire Law School in Abuja. Abdullahi noted that developing a homegrown blockchain would ensure that Nigeria retains full control over its data and can enhance national security.
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The idea for the Nigerium blockchain was initially proposed by Chanu Kuppuswamy, leading a delegation from the University of Hertfordshire Law School. Kuppuswamy argued that a customized blockchain tailored to Nigeria’s specific needs would align better with the country’s laws and regulations.
She pointed out the potential risks associated with relying on foreign-made blockchains, using Ethereum’s recent unilateral changes as an example. These changes, made without user consultation, underscore the lack of control Nigeria would face with foreign blockchains.
Advantages of Nigerium
Developing an Indigenous blockchain like Nigerium promises several advantages, with some noted as follows:
- Data Sovereignty: Nigeria would have complete authority over its blockchain, ensuring data privacy and security.
- Customization: The technology can be tailored to meet Nigeria’s unique requirements and regulatory standards.
- National Security: A homegrown blockchain reduces the risk of external manipulation and cyber threats.
The Hertfordshire delegation also proposed the establishment of a Data Embassy. This concept involves hosting a server in a third-party country to ensure digital continuity and protect against natural disasters, cyber-attacks, and other threats.
Furthermore, the delegation recommended harmonizing blockchain technology across various government agencies to promote interoperability and enhance overall efficiency.
The Nigerium project will be a collaborative endeavor between NITDA and multiple stakeholders, including government agencies and private sector organizations. This collective effort aims, among other things, to bolster Nigeria’s data sovereignty and fortify national security.
Nigeria’s Struggle with Technology Adoption
Despite its potential, Nigeria has lagged in embracing and leveraging evolving technologies, particularly in the realm of blockchain and cryptocurrency. The Central Bank of Nigeria (CBN) has maintained a cautious stance on cryptocurrencies, which are inherently built on blockchain technology. This caution stems from concerns about the potential misuse of cryptocurrencies for illegal activities, as well as their impact on the national financial system.
Nevertheless, the Nigerian government has yet to develop a comprehensive regulatory framework to address its concerns about cryptocurrency. This regulatory vacuum has significant economic implications. Many Nigerian traders and businesses rely on cryptocurrencies for transactions due to their speed and efficiency. However, the lack of regulation has stifled this growing sector as the CBN’s stern view of the technology has prompted it to ban crypto transactions in the country repeatedly.
According to recent reports, Nigeria is one of the leading countries in cryptocurrency adoption globally, with over $400 million worth of transactions in cryptocurrencies occurring in 2021 alone, trailing only Russia and the United States.
In June, the director-general of the Securities and Exchange Commission (SEC), Emomotimi Agama, said that Nigeria’s cryptocurrency market is estimated to be worth over $400 million. He noted that a significant portion of the population is actively involved in cryptocurrency trading and transactions, underscoring the growing importance of digital currencies in the country’s financial industry.
Despite this high adoption rate, the lack of regulatory clarity has created uncertainty and hindered further growth.
However, the development of Nigerium is expected to set off a fresh disposition toward blockchain technology in Nigeria. By creating a national blockchain framework, the government is expected to address security and regulatory concerns while fostering innovation.
NITDA has previously announced initiatives to establish research centers focused on Artificial Intelligence (AI), the Internet of Things (IoT), and blockchain technology across the six geopolitical zones of Nigeria. These centers will drive research and development in emerging technologies, furthering Nigeria’s position in the global tech industry.