How Nigerian Youths Are Using Cryptocurrency to Combat Unemployment

On April 19, 2019, workers heaved a sigh of relief when President Muhammadu Buhari approved the minimum wage of 30,000-naira, but between April 19, 2019, and today, inflation has converted that 30,000-naira minimum wage to 21,000. When the President signed the minimum wage into law in April 2019 30,000-naira was approximately 96 USD, today 30,000-naira would give you about 61 USD.

Four decades ago, in 1981 to be precise, the national minimum was 125-naira/month, the baffling thing is that what 125-naira would buy you in 1981 is quite more than what 30,000-naira would purchase in today’s market. If survival could be this gruesome for the “working-class’, imagine the level of despair in the lives of an average unemployed Nigerian youth.

In Nigeria, the youth unemployment rate is often higher than the overall unemployment rate, which was about 6% in 2018. An important reason for this contrast is that many young people under the age of 24 are full-time students, lacking the requisite skills or certification to secure a job. It is also claimed that Nigeria has 40 million workable youngsters, with just 14.7 million fully employed and 11.2 million jobless. The repercussions of this high young unemployment rate include increased insecurity, social vices, and poverty, among other things.

As of the 3rd quarter of 2018, every region in Nigeria has over 5 million unemployed or underemployed people. For what it’s worth, in the last 642 days we have no unemployment figures for this country. For economic growth and progress, countries like England, the United States, Germany, release their unemployment figures every month. One of the ways Nigeria has been able to valiantly fight Covid-19 is by releasing the data and number of people that have gotten Covid every day (as this gives us a holistic assessment of the state of things).

Foreign Investors are not Interested in Creating Jobs in Nigeria

One of the things that boost the economy of a Nation is the active involvement of foreign investors. Many Nations of the world are thriving solely for this. Hence, they are working to make sure they provide an enabling environment for businesses to thrive. This is mostly not the case in Nigeria. There are so many things that businesses thrive on that are not particularly in proper proportions in Nigeria. Let’s scrap it on the surface so that the idea can be a bit clearer.
Poor power supply: Availability of a steady power supply is one key thing that companies and businesses thrive on. This is a major setback because a lot of businesses have to produce their power and this does not come cheap. As a matter of fact, most foreign investors leave the country because of this particular problem.

High cost of doing business: This is closely tied to the first factor that was mentioned. Beyond that, businesses in Nigeria are mostly forced to make almost everything work by themselves with little or no government participation. This is discouraging and in no time, a lot of investors are frustrated out of business or forced to move out because all of these things do not come at a cheap price.

Government policies: From time to time, several government policies that are directly not in favor of a lot of foreign investors. In a century where and when everything is going digital, Nigeria still has several government policies that are not in favor of most foreign investors. The recent ban on crypto in Nigeria is a good example. A lot of businesses were forced to shut down just because a part or all parts of their operations are crypto-centric. So many people lost their jobs to this effect. More recent than that was the recent suspension of the operation of Twitter in Nigeria for reasons that are strongly tied to the algorithm of the system and the community at large. We can go on and on and not exhaust many of the not so good government policies that have set so many foreign investors on the run.

Insecurity: Insecurity is a major problem in Nigeria and in fact, Nigeria is on the top ranking list of countries that are not safe to live in. The direct implication is that Nigeria is also not particularly a safe place for business too.
All of these and so many other reasons are the repelling factors discouraging foreign investors from setting up businesses in Nigeria.

Naira P2P

Before the emergence of crypto exchanges, users mostly bought and sold crypto through a peer-to-peer system also known as P2P. In this system, an exchange is carried out between individuals with contrasting needs. For example, if Mr Paul has bitcoin and needs USD, he can easily look for someone who has USD and needs bitcoin. That is by far the original ideology behind cryptocurrency. A system that allows individuals to transact without a centrally controlled middle man. P2P has its pros and cons but it’s by far the saving grace in countries like Nigeria where crypto got banned. ironically the number of crypto users in Nigeria skyrocketed almost immediately after the ban.

In what appears to be a desperate attempt by the CBN to inject and maintain the foreign exchange market into the economy through any means possible, crypto exchanges like Remitano, Binance, Okex, Kucoin and others launched and fine-tuned a new P2P option for Nigerians, and as a result, Bitcoin transactions in P2P lending have increased by nearly 16%. Trust in government institutions has also deteriorated. Many young Nigerians, who are faced with a predicted unemployment rate of more than 30% in 2021, have expressed dissatisfaction and speculated that the government is attempting to tighten its grip and strangle their means of subsistence.

How the Nigerian Youths Are Using Cryptocurrency to Solve Unemployment

In a country where it is difficult getting a job, crypto has become a beacon of hope. Nigerians work for a range of global and local crypto and blockchain companies as CEOs and resource employees. Writers, educators, forensic scientists, reporters, attorneys, moderators, programmers, reporters, researchers, software developers, journalists, and others have evolved in the area of blockchain and encryption, fostering an atmosphere of creativity, collaboration, and growth. Nigeria touts Africa’s largest economy, a population of more than 200 million people, and one of the continent’s youngest and most technologically sophisticated populations. Nigeria has the greatest Bitcoin trade volume, according to statistics from Usefultulips.org.

Many of the issues that Nigerians who do not have a bank account have in international trading can be solved with cryptocurrency. With the introduction of bitcoin, a slew of young people have taken use of this innovation and the tools underlying blockchain technology to generate and sustain a consistent income in the same way that traditional employment does.

Cryptocurrencies have also aided small-scale trade to assist the unemployed in the global market. Cryptocurrency permits these events to promote merchandise in trade for Bitcoin and a “boycott” of conventional e-commerce systems, which frequently entails having a user account with conventional banks, and this comes with several charges.

With the growing interest of young people in cryptocurrency, companies such as Remitano, Binance, Bundle, BuyCoins, Luno, and Quidax have intensified their efforts to assist them in gaining market knowledge and becoming specialists. In 2020, there were (online and offline) attendees from around 40 nations, many of them were from Africa. A private crypto masterclass may cost up to $200 per student on average.

Remitano is on a mission to ensure as many Africans as possible are crypto-educated. Thousands of Africans are glued to the resource materials that are being uploaded frequently on their platforms. Remitano also has measures in place to reward users that are actively engaging with these contents. Remitano has also conducted massive learning efforts in the market. During the lockdown, Remitano used an additional digital strategy to encourage customer involvement by organizing a series of buying and selling seminars as part of their aim to educate thousands about crypto and its benefits. As a result, Nigerians have developed a more keen interest in crypto and blockchain technology owing to its educational and professional benefits – for both investors and non-investors.

As an independent currency, digital money has had a significant influence on Nigeria’s unemployment rate. The ricochet effect has been enormous for competent, enterprising, and persistent professionals – improving financial inclusion is the most important and developed advantage of cryptocurrencies for Nigerians.

What Needs to be Done?

  • For those who wish to assure the value of foreign money as a means of payment, investment, and transaction instrument, it is becoming increasingly difficult for Nigerians to carry out crypto transactions.
  • The CBN’s prohibition on cryptocurrency transactions effectively bans market participants from using credit/debit cards issued by Nigerian banks to purchase or sell cryptocurrencies, or from receiving the results of business transactions through exchanges that facilitate the buying and selling of cryptocurrencies.
  • The move to P2P trading allows users to sell and buy crypto from individual traders rather than through exchanges, thereby removing the requirement to obtain “permission” from the Nigerian regulator. Rather than disregarding the enormous effect of cryptocurrency in the nation, the CBN could oversee crypto exchanges by requiring them to implement a new set of Know Your Customer (KYC) standards similar to those employed by banks. Because they utilize a system that holds customer deposits, the CBN must establish a minimum asset basis before issuing a license to trade cryptocurrencies.
  • Needless to say, CBN must work with the SEC to chart a course to foster the sustainable use of cryptocurrencies in Nigeria’s quest to advance its digital economy agenda.

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