E-Financial
Impact of Free-Falling Naira on Technological Development in Nigeria
The continuous slide of the Naira, the Nigeria currency, to less than 50% of its value since April 2015 is spelling serious technological development concerns and consequence for Nigeria.
It is such a worrying moment for businesses, technology and technology firms operating in Nigeria.
Although many Economists and Financial Analysts have, from their various academic perspectives, debated the effects and impact of the free-falling currency on the country as a whole, it appears very few have given much consideration to the enormous loss of Naira power and the dire consequence on Nigeria’s technological development.
The treacherous slippage of the currency down the slope and alleyway of technology stagnancy or backwardness is to state mildly the resulting disaster or catastrophe that awaits technology stakeholders at all levels of the economy.
The issue, if not checked in time, may exacerbate and further send the country backwards from what is already an ‘eggshell’ fragile technology development onto a banana skin retrogression which could make other nations leave Nigeria further way behind.
The precarious state of the Nigeria economy in the recent months, which many commentators attribute to be the aftermath of maladministration of past administrations, is almost unprecedented.
The free-fall of the Naira has definitely surpassed the currency devaluation shocks of the late 1980s – 2010 which fuelled the exodus of thousands of young, intelligent and enterprising human resources in droves for better lives, new hope and new beginnings to the Western world.
In between the ‘mass exodus’ of the last two to three decades, the world has witnessed the advent, rise and boom of the internet technology which had turned out to be a blessing to a large number of Nigerians in diaspora who seized the opportunity to retrain into new careers in IT.
Over the last two decades, Nigerians living in the West have become one of the best sets of people that have great technology expertise, second only to Asians.
While many Nigerian technology experts and professionals in diaspora have done very well for themselves and for their adopted countries, most were no longer contemplating return to motherland until about 5 years ago when the country began to open its doors for their return through the attraction of fairly stable exchange rate and business’ willingness to pay fairly decent wages in return for the expertise provided which made returning return home a bit more attractive.
The availability of such indigenous experts in the country, no doubt, amplified implementation and technology delivery success rates which were the values they gave in return. To a large degree, businesses, local resources and Nigeria as a whole benefited from the arrangement that saw indigenous professionals back into the country.
No doubt Nigeria has made more strides in the technology space in the last 5 years than the previous 15 years, largely due to the ‘Returnees’ coming back home with cutting edge skills, knowledge and enhanced work ethics, which to a large extent was made easier by the equilibrium struck between knowledge and reward.
However, this stability is now being threatened by the disruption that has been rocking Naira since last year, 2015.
Recent decisions made by the government to stem the foreign exchange outflow from the economy, reduced crude oil prices and the alleged misappropriation of funds are few of the many factors causing unwillingness of technology professionals to return to Nigeria in the recent months. And, where they are willing to come to Nigeria, they are asking for 200%+ of the usual 2015 earnings and in many cases demand to be paid in foreign currencies, which employers are finding harder to come by.
Arguably, the economic cycle in which Nigeria finds herself has yielded more cons than pros such that business and technology development have been slowed down considerably as the exchange rate saga plays out.
More and more technology professionals are returning to Europe and America to ply their trade as the loss of Naira value is no longer justifying their stay in the country nor able to maintain their life styles. In a number of cases, many of them have immediate families living abroad and therefore have foreign exchange commitments which cannot be met on their current Naira income.
For example, a technology professional engaged in April 2015 when the rate was $1: N150 is now effectively earning half of the wage in 2016 when unofficial rate from banks is $1: N320. With mortgage, education and other commitment abroad, the professional may be left with no option but contemplate a return to a place where s/he can meet her/his obligations.
Unfortunately, ‘home coming’ dream of many technology professionals willing to make a difference is being put on hold, rather the ones that came in earlier are returning to their adopted countries, just as it was in the 1990s and early 2000s.
Needless to say that recruiting technology professionals from Europe or USA in the last 12 months has been painful and almost impossible or where this has been achievable, the brave or selfless professionals recruited are easily getting distracted and saddened at the rate at which their agreed remuneration gets eroded by the fall in Naira value. It is getting to a stage where most are requesting their employers to hedge their income against stable currencies, but the conundrum is that most employers do not seem to have foreign exchange to pay the professionals for their services unless they turn to the black market.
Delivering technology is becoming more challenging and very expensive once again as skilled technologists are becoming rarer in Nigeria, by the day. Even the local resources that were shadow-learning or understudying ‘Returnees’ are beginning to find their out of the country for pastures anew.
is a new level of attrition amongst technology personnel, especially those with less than 5 years of experience, most of whom either find ways to travel overseas or hop to another local employer to double their earnings.
Yes, many are beginning to head for the exit door, driven with the fear of tomorrow and focus on themselves as against the bigger picture, the development of Nigeria.
But can anyone blame them? The biggest winners in the technology/currency quagmire are the Western countries who open their doors to skillful Nigerians and provide them with the platform and reward for greater productivity in their countries. And the biggest loser is Nigeria. Certainly, Nigeria need these experts to develop her potentials.
Michael Ogunjobi is Senior Manager at Accenture
Nigerian banks have resumed processing international tuition payments from Naira accounts through the Central Bank of Nigeria (CBN)’s Form A portal.
Form A is an application form designed by the Central Bank of Nigeria to pay for service transactions (invisible trade).
The form allows customers to purchase foreign exchange at the CBN or interbank rate to make payments for eligible services as predetermined by the foreign exchange manual.
This development comes a month after commercial banks announced the resumption of international transactions on their naira cards.
In an email to customers, Guaranty Trust Bank Limited (GTBank) and Lotus Bank announced that the service is now available for applicants paying undergraduate and postgraduate tuition fees abroad.
“Pay international tuition fees directly from your Naira account,” the notice from GTBank read.
To access the service, customers are required to register and submit their applications via the Trade System Portal at www.tradesystem.gov.ng.
GTBank explained: “Select the ‘Form A’ application for Educational Fees. Choose GTBank as the processing bank, attach required documents, and submit the application.”
Similarly, Lotus Bank stated, “Register on the Trade System Portal. Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application.”
In a similar notice, Lotus Bank also informed customers of processing international fees using its facility.
“Register on the Trade System Portal (www.tradesystem.gov.ng). Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application,” the bank said.
In 2022, Nigerian banks said international school fees and upkeep requests via Form A will be processed within 120 days due to forex scarcity at the time.
Safaricom, M-PESA and PayPal have announced a strategic collaboration to enable account linking and seamless fund transfers across their networks.
This collaboration aims to empower more than 35 million M-PESA customers and two million businesses and micro traders in Kenya to access PayPal’s global network.
By first linking their PayPal and M-PESA wallets, users can easily transfer funds from their PayPal accounts into their M-PESA wallets, and vice versa. This service is designed to enhance the experience for customers and businesses transacting between the two platforms.
The solution is currently available to Safaricom M-PESA customers in Kenya, with plans to roll out the service to the other M-PESA markets in the future.
“As globalization and digitization continue to reshape how people and businesses connect, our partnership with PayPal is a bold step forward in enabling seamless, worry-free, safe, secure, and inclusive digital payments.
“This collaboration empowers over thirty-five million customers and two million businesses and micro-entrepreneurs across Kenya to participate in the global digital economy by conveniently sending and receiving payments across more than 200 markets. It’s part of our commitment to unlocking opportunities and transforming lives through the power of M-PESA,” said Esther Waititu, Chief Financial Services Officer, Safaricom PLC.
“Building seamless connections between the global economy and local financial ecosystems is crucial to expanding digital financial inclusion,” said Otto Williams, Regional Head and General Manager for the Middle East and Africa, PayPal. “We are thrilled to enable millions of M-PESA’s customers across Africa connect more easily to PayPal’s international customer base.”
For 18 years, M-PESA has driven financial inclusion and bridged the digital divide. With M-PESA Kadogo, introduced in 2016, Safaricom waived fees for transactions of Kshs 100 and below, making digital payments more accessible. Now, through Ziidi MMF, customers can invest from as little as Kshs 100, promoting a culture of saving and financial wellness.
The partnership will tap into the emergence and growing popularity of the gig economy that has seen a rise among Africans accepting online jobs for clients across the world.
It equally marks a growing trend of interoperability between fintech providers with a goal of providing customers with a digital financial ecosystem that meets their needs by combining different capabilities.
PayPal is a leading global payment processor with more than 400 million active PayPal accounts operating across 200 markets, while M-PESA is Africa’s leading mobile money service connecting more than 50 million customers across Africa, 2 million businesses and micro traders, with more than $1.1 billion transacted daily.
Federal government has mandated banks and financial institutions to begin reporting monthly transactions exceeding N25 million for individuals and N100 million for firms to the tax authorities.
Under the new provisions of the Nigerian Tax Act, financial institutions are required to submit quarterly returns to the Federal Inland Revenue Service (FIRS).
The agency will be renamed to the Nigeria Revenue Service (NRS) from January 2026, when the new tax system will take effect.
“Every person who has an obligation to deduct and remit tax under this Act or any other Returns for tax legislation shall render monthly returns to the appropriate tax authority, as specified deduction of tax in the regulation issued for that purpose,” the Act reads.
“Without prejudice to section 142 of this Act, every bank, insurance company, stock-broking firm, or any other financial institution, shall prepare, with or without demand be delivered by the relevant tax authority, quarterly returns to the relevant tax authority specifying the names and addresses of new customers;Nigerian fashion trends
“…and existing customers in the case of (i) an individual, all transactions where the cumulative transactions in a month amount to N25,000,000 or more, or (ii) a body corporate, all transactions where the cumulative transactions in a month amount to N100,000,000 or more.”
Prior to the new tax law, banks were mandated to report deposits of N5 million — a measure intended to curb illicit financial flows, according to TheCable
Experts said the shift is part of efforts to tighten anti-money laundering reporting in the financial sector.
In 2023, Nigeria was listed on the grey list by the Financial Action Task Force (FATF) over deficiencies in tackling money laundering and terrorism financing.
Since then, the country has been making efforts to exit the grey list, which subjects it to increased monitoring by the FATF.
In November 2024, Hafsat Bakari, chief executive officer (CEO) of the Nigerian Financial Intelligence Unit (NFIU), said Nigeria has achieved upgrades in five key recommendations from the FATF.
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