Direct Foreign Investments into Nigerian Fintech space crippled by Crypto and Twitter Restrictions

By: Mark Jessy

May 12, 2022 7:53 AM

According to a recently published report which states that Nigeria restrictions on cryptocurrency trading by the Central Bank of Nigeria (CBN), coupled with the Twitter ban by the nations authorities, may have had a negative impact on direct investment in the fintect industry.

Direct Foreign Investment ‘Crippled’

A joint publication by the secretaries-general of Organisation for Economic Co-operation and Development (OECD) and the United Nations (UN) is titled Africa’s Urbanisation Dynamics 2022

The report claims to have found that restrictions imposed by the Nigerian authorities on cryptocurrency trading may have been an important factor to the reduced foreign direct investment that goes to the fintech industry. Meanwhile it reads that the same restrictions, as well as the banning of the use of Twitter withing the country, have also affected young Nigerians who were earning money via crypto trading after they were deprived access to the ever growing crypto Twitter community. The report reads:

“Restrictions on crypto transactions and the ban of Twitter in Nigeria have crippled foreign direct investment in the fintech industry and negatively impacted millions of young Nigerians who earn a living from this sector."

Evading Tax

An exception from the article publised by Business Insider Africa opined that some youths may have found ways to “lawfully bypass these restrictions and continue the business in Nigeria.” A recent report also shows that peer-to-peer crypto trading in Nigeria had surged shortly after the central bank of Nigeria (CBN) directives which demands institutions to stop facilitating crypto-related transactions.

With other legal ways of transacting, the report opined that traders were effectively denying Nigeria the taxes and transaction fees.