The Central Bank of Nigeria (CBN) directed banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems. This is according to a circular released to deposit money banks (DMBs), non-bank financial institutions (NBFIs), and other financial institutions (OFIs) on 5 February. In January 2017, CBN had said digital currencies such as bitcoin, litecoin, and others are largely used in terrorism financing and money laundering, considering the anonymity of virtual transactions. It had also said that such currencies are not accepted as legal tender in Nigeria. In February 2018, the apex bank also issued a warning to people who invest in cryptocurrencies, saying they would be unable to seek legal redress in the event of collapse because they are not protected by the law. “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited, ” the circular signed by Bello Hassan, director for banking supervision, and Musa Jimoh, director of the payment system management department, read. This comes as Isa Pantami, Minister of Communications and Digital Economy, says there are plans to replace the Bank Verification Numbers (BVN) with the National Identity Numbers (NIN). The BVN was launched in 2014 by the Central Bank of Nigeria (CBN) to protect customer’s transactions. Speaking on 8 February in Abuja, the minister said the NIN is the primary and legal identity of all Nigerians, which should be included in their bank accounts, saying the BVN is not established by law. He added that President Muhammadu Buhari is satisfied with the ongoing NIN registration across the country. “The challenge is that the BVN records may not be 100 percent the same with NIN but what is most important is that the NIN is the primary identity of each and every citizen, including legal residents,” Pantami said. “BVN is a policy of a bank and has not been established by law, NIN is the only mandatory number and the primary identification of our citizens and every other identification is secondary,” he added.

At least 400 residents of Foreshore Road, Lekki in Lagos have been displaced after men of the Lagos State Task Force on Environmental and Sanitation (Enforcement) Unit demolished and burnt their houses on Wednesday. The Punch reported that the team also included policemen from the Maroko division. An unnamed member of the community told the paper that they were only given 24 hours to remove their properties. He said the officers claimed that the houses were being destroyed over the Lekki shooting incident. This comes as one of the youth representatives in the Lagos Judicial Panel of Inquiry and Restitution for Victims of SARS Related Abuses, Rinu Oduala, has threatened legal action against the Central Bank of Nigeria after a Federal High Court in Abuja ordered the regulator to unfreeze the accounts of 20 #EndSARS promoters. The bank targeted the accounts in 2020 in the wake of the #EndSARS protests, which demanded an end to police brutality and bad governance in the country. The order was issued on Wednesday by the judge, Ahmed Mohammed, following an agreement by the legal teams of the CBN and the defendants to end the case. In reaction to the order, Oduala whose account was among those frozen by the CBN said on social media that she has informed her lawyers and that she will take legal action against the apex bank. She tweeted, “It’s time to sue CBN for the unlawful freeze of my accounts. “I was accused of money laundering & terrorism but no investigations were done in the past three months. This was purely an act of intimidation! “I have informed my lawyers, Falana and Falana Chambers and we will be suing!”

Auwalun Daudawa, the alleged mastermind of the abduction of some students from a secondary school in Kankara, Katsina state, has “repented”. Daudawa and five of his lieutenants surrendered 20 AK 47 rifles, ammunition and a rocket-propelled grenade (RPG) launcher. In December, over 300 schoolboys were abducted from their school. The students regained their freedom after spending a week in captivity. Bello Matawalle, Governor of Zamfara, had said the boys were rescued through the help of Miyetti Allah Cattle Breeders Association of Nigeria (MACBAN) and that no ransom was paid. Speaking after he took an oath of repentance on Monday at the government house in Gusau, Zamfara capital, the repentant bandit said his gang voluntarily surrendered and are not seeking money from any individual or government. “We have voluntarily repented and seek no single kobo from any government, group or individual for that,” he said. “I was convinced by the state government approaches on peace reconciliation with armed bandits, I learnt from those repented before me that, there was not single plan by the governments through the use of security agencies to harm me and my boys, therefore, we are now back for normal lives like other peace-loving Nigerians.” On his part, Matawalle said the development is as a result of his administration’s efforts to ensure that there is peace in Zamfara. “The development will not only gradually paste the name of Zamfara unto the list of most peaceful places in the country, but will facilitate the return of the lost commercial enterprising to the state,” the governor said. The governor said his administration is working to ensure that farming and cattle rearing would be the only activities in the state’s forest.

Following the rise of Nigeria’s urban population, the current system of herding conducted mainly through open grazing is no longer sustainable, northern governors have said. The Northern state governors spoke during a virtual emergency meeting, which they held on Monday to discuss issues affecting the region and the country. In a communiqué released in Jos on Tuesday after the meeting by the Chairman of Northern Governors Forum (NGF) and Plateau Governor, Simon Lalong, the governors expressed concern over the tension generated by the eviction order issued to herdsmen in some parts of the country. They noted that the situation was heating the already fragile security atmosphere with threats of reprisals which the Northern Governors are working assiduously to contain. They also stressed the urgent need for the Nigerian Governors Forum to meet and discuss the issue holistically with a view to resolving all areas of misunderstanding and conflicts arising from these threats and suspicion for the sake of national unity. The communiqué read in part, “Consequently, Forum resolved to aggressively sensitise herdsmen on the need to adopt new methods of herding by ranching or other acceptable modern methods. It appeals to the Federal Government to support States with grants to directly undertake pilot projects of modern livestock production that will serve as springboard and evidence for breaking resistance to the full implementation of new methods of livestock production. “Forum resolved to engage elders and youths in a robust discussion with a view to dousing the tensed security environment in the north. Accordingly, a four-person committee was put in place to be headed by the Chairman of the Northern Governors Forum.” The communique equally called for restraint from leaders including those in the Southern parts of the country “where passion is high” and urged “all the citizens of the north to continue to live in peace with all Nigerians irrespective of their origins and backgrounds”.

Commentary

  • While forward thinking countries are looking to create legislations that ensure that cryptocurrencies are incorporated into the formal financial system, Nigeria’s central bank is effectively locking them out. For one, many flocked to bitcoin and other digital currencies because of the CBN’s FX regulations. The implication of this, of course, is that in the face of subsisting regulation, demand for the crypto use case remains high in Nigeria, and CBN has only succeeded in driving bitcoin into less formal channels such as peer to peer (P2P). By locking the door on cryptocurrency trades without broad consultation with stakeholders, Nigeria – which is the third largest cryptocurrency market after the United States and China according to Baker McKenzie – has continued to show investors that the country is unsafe to invest in, as policies swiftly change and affect any hope for a positive return on investment. In addition, the CBN’s directive has also created a bottleneck for entrepreneurs within the financial technology sector, who now have to find innovative ways around this regulation. Whereas countries like China, Ecuador, Senegal, Singapore, Tunisia, and soon, Estonia, Japan, Palestine, Russia and Sweden are looking to launch their own national crypto or digital currencies, Nigeria has put up walls to prevent the growth of this sector. Undoubtedly, while the decentralised nature of cryptocurrencies make them unattractive to many regulators, as they pose security risks as avenues for sponsoring terrorism, illicit trade, moneylaundering and fraud owing to operations which occur outside the bounds of regulation or taxation; the same can be said of any fiat money. On the other note, the decision to replace the BVN with NIN is a bit problematic. For one, the Bank Verification Number is much harder to obtain than the National Identification Number, as all banks are required to perform a know your customer (KYC) on every account holder. With respect to NIN, there is still no clear way to know who is really a Nigerian citizen or the status of a person’s residency as the current registration effort relies too much on self-recognisance. Furthermore, the desire to replace the BVN with an NIN shows a lack of synergy among government agencies, a trend that has become prominent in the Buhari administration. At SBM, we think the best (and common sense) approach would be to create a harmonised database for all identification numbers starting from the BVN, NIN and then the sim card registration.
  • This is one of the most consequential weeks for the fight against police brutality since the Lekki Massacre of 20 October, 2020, with the authorities signalling that it is time to move on. The Lagos Judicial Panel voted to return control of the Lekki Toll to the LCC on 6 February, even before releasing an official report of their findings, and weeks after the army – the chief suspect in the deadly sequence of events that night – decided it would no longer participate in the proceedings. The clearing of the Foreshore Road communities in Ikoyi, some of whom were eyewitnesses to the massacre, is another pointer to this new effort at erasing 20 October. There is also no indication that the CBN will obey the court ruling ordering it to unfreeze bank accounts, as the country’s Attorney-General, Abubakar Malami, has recklessly indicated that the Federal Government will not be “intimidated” into complying. This disjointed state of affairs has stoked Nigeria’s largest city and biggest economy, with protest calls on both sides of the political divide set for tomorrow, 13 February, at the Lekki Toll Gate. While we think the protests won’t happen tomorrow, apart from the likelihood of confrontation between both groups, attempts by security agencies to disperse crowds could easily turn violent in what might end up being a reprise of 20 October. Reopening the toll gate should not be the state government’s top priority despite the obvious economic implications of the continued closure. Justice must be done – and seen to be done – for those who lost their loved ones both to SARS and the Lekki Massacre. The haste to return to business as usual will prove counterproductive in the long term, because it will firmly illustrate the authorities’ lip service to upholding human rights abuses, deepening the growing distrust in governance and setting the stage for violent confrontations in the future.
  • While non-violent approaches to restoring peace and security to the North-West are encouraged, the ‘repentance’ of Mr Daudawa is also an indictment on the state for its inability to apprehend and bring non-state actors who have engaged in violence to justice. This is not the first “repentance” exercise by armed groups or amnesty offered by state governments in the region. In June 2020, the Katsina State Government pulled out of a peace deal it had made with bandits in the state alongside Sokoto and Zamfara over what it termed as the bandits reneging on the deal by continuing to attack citizens. As always, these peace deals are often poorly conceived and do not carry along the communities who are most affected by the violence and remain vulnerable to the bandits. Also, there is very little effort put into the disarmament, demobilisation and reintegration (DDR) of the bandits, making it likely that these same bandits could continue to attack communities and travelers. Sadly, this type of courtesy is not extended to other dissenting, often non-violent groups. As we highlighted last week, there has been a more aggressive approach from the government towards members of the Indigenous People of Biafra (IPOB) and peaceful protesters. The discrepancy is partly rooted in the ethnic colour which the conversation around insecurity has acquired in Nigeria during the Buhari era. It is also a product of the breakdown in the criminal justice system’s ability to charge, prosecute and sentence violent actors. Justice, however, cannot happen in a vacuum of political laxity. The carrot of amnesty deals, used in other countries as part of wider effort at building consensus and fostering reconciliation, has morphed into a mechanism by which armed groups are pacified and rewarded with political and economic relevance. At this rate, the cycle of violence and social weathering will not be broken.
  • This is a continuation in messaging from Northern political leaders who appear to have realised that open and nomadic grazing is no longer sustainable as clashes between herders and farming communities over land and water resources, which consistently assume ethnic, regional and religious dimensions, persist and intensify. Such ranches or grazing reserves will be developed such that they can provide adequate water and food for the livestock, and can lead to a more streamlined growth of the livestock value chain while producing higher-quality animal products such as meat, milk and hides, and skin. There is, sadly, a very conspicuous silence from the FG on the need to accelerate the shift from the current system of livestock rearing to a ranching model, particularly through its National Livestock Transformation Plan (NLTP), which has so far remained only a document with no indications that implementation is on the cards. The position of the Northern governors provides an excellent opportunity to commence implementation of the NLTP as the tide is in its favour and will go a long way in not just eliminating regional tensions, but also increasing Nigeria’s food security. However, there is a gap in terms of policy design. This gap will not encourage the set up of ranches or grazing reserves by commercial interests or the state governments themselves, as all lands are owned by state governments with the minor exception of communal lands. The implication then is that for ranching to really take off, Nigeria will need to abrogate, or at least modify, the Land Use Act. A tall order considering that no one, not even under fire Northern governors, are talking about this obvious elephant in the room.