Nigeria has the highest GDP out of all the African countries, but 40% of its population lives in poverty. The country’s struggling economy primarily relies upon oil exports, accounting for more than half of government revenue. Lacking transport and energy infrastructure as well as neglecting to diversify the economy results in a disadvantaged population of impoverished people. The use of cryptocurrency in Nigeria is proving to be a beneficial solution to help lift people out of poverty.
Boosting Supplemental Income
The 2016 recession caused a significant strain on Nigeria’s economy and the country is still struggling to recover. In the second quarter of 2020, the country reported a 27.1% growth in unemployment. Average incomes have been declining for six years straight and experts predict there will be less than a 2% rise in income during 2021. The value of the country’s national currency, the naira, fell by 24% in 2020. This economic downturn caused some Nigerians to seek supplemental income.
A 2020 survey indicates that 32% of Nigerians participate in buying and trading cryptocurrency. In 2020, Nigeria accounted for $400 million worth of cryptocurrency transactions, ranking it third globally in trading volume. Cryptocurrency in Nigeria has so far positively enriched the lives of impoverished citizens. For example, a Nigerian cryptocurrency investor, Tola Fadugbagbe, credits cryptocurrency for lifting him out of poverty. Initially struggling to survive on minimum wage odd jobs, Fadugbagbe now earns enough money from cryptocurrency trading to build his own house and purchase a farm.
Ease of Banking
Approximately 60 million Nigerians do not possess a bank account. People who do have bank accounts can only withdraw less than the equivalent of $100 due to local bank restrictions. The hurdles have led to a shift toward mobile banking and cryptocurrency investments. In 2017, reports showed that 71% of Nigerians use mobile phones for communication and internet access. Mobile platforms, including Xend Finance, allow Nigerians to transform their funds into cryptocurrencies. One cryptocurrency that has become popular is stablecoin, which has minimal transaction fees. Stablecoins provide the added benefit of protecting funds from devaluation.
Providing Educational Opportunities
Cryptocurrency in Nigeria is also bringing about educational opportunities. In September 2020, the #BuiltWithBitcoin campaign, led by the bitcoin marketplace Paxful, began construction of a new school in the Nigerian area of Sanga. Paxful is a cryptocurrency exchange platform that operates on a peer-to-peer basis. Nigerians use the platform to make nearly 1.1 million monthly blockchain transactions.
The new school expects to serve 100 to 120 children from ages 3-6. During the evenings, it will function as an adult education facility. Additionally, features of the school will include a water well and solar power. The water from the well can also be sold to the community at a low cost. Paxful will cover all costs needed to run the school such as school uniforms, educational resources and salaries.
The upsurge in cryptocurrency transactions has had a profound effect on many Nigerians seeking a way out of poverty. Nigerians are capitalizing on the educational opportunities and supplemental income cryptocurrency brings. The unexpected benefits of cryptocurrency in Nigeria bring hope to citizens living in poverty.
– Tiara Tyson