👨🏿‍🚀TechCabal Daily – Flip the crypto coin

Persona non grata is a Latin phrase that translates to “unwelcome person” and is used to describe someone who is officially declared undesirable or unwelcome by a government. 

This dictum may explain the Nigerian government’s stance on crypto. 

Crypto regulation in Nigeria has been a rollercoaster. After lifting a two-year crypto ban in December, the government had a change of heart. In the following months, it showed signs that it still frowned against digital assets. 

The government blocked the websites of crypto exchanges and warned against P2P trades. Executives of Binance who had come into the country to resolve the blocked access were arrested, with one executive still in detention. Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC) also froze 1,000 bank accounts linked to crypto trade. 

If you’ve followed till now, you’ll get a sense that crypto may not be fully welcomed in the country. And while the SEC may have issued its first crypto licences to Quidax and Busha, banks and fintechs across the country are playing it safe.

While the Nigerian SEC has released new guardrails for crypto transactions in the country, banks claim that they are unclear and difficult to follow. While the newly licensed entities are optimistic about a good rapport with banks and fintech, the banks have made their point clear that they’ll only engage when they receive instructions from the CBN.

Since Nigeria started scapegoating crypto company Binance in February over claims that it allowed currency traders to manipulate FX rates, not much has changed. On September 3, the naira continued a week-long slide, settling at ₦1,590/$1. 

While the Central Bank’s search for stable pricing remains elusive, the case against Tigran Gambaryan, the Binance compliance executive arrested in February 2024 has continued. On Monday, a video of Gambaryan being denied the use of a wheelchair by prison officials went viral. His family has repeatedly asked for his release on health grounds. 

On Tuesday, Binance also asked the Nigerian government to release Gambaryan. Its CEO Richard Teng posted on X that Gambaryan’s treatment is “inhumane”, and that he must be allowed to go home to his family. US lawmakers have since petitioned President Joe Biden to secure his release.

However, Nigeria is not budging in its stance that Gambaryan and his employer are allegedly complicit in laundering money. To this day, Nigeria has yet to show how it will hold any water to this claim, as it never tracked or regulated crypto transactions.

Moreover, in 2021 when Nigerian banks were freezing crypto-related accounts, Binance’s peer-to-peer (P2P) platform allowed crypto trading to continue under the radar, drawing Nigeria’s ire.

Again, this is not Binance’s first money laundering case; the US Department of Justice sued the company for $4.3 billion on similar charges in 2023. Nigeria is likely sensing an opportunity here. If this messy affair plays out longer, all indications point toward Binance eventually settling.

Shortly after the Nigeria National Petroleum Company Limited (NNPC) opened up about its “financial strain” and debts owed to petrol suppliers, Nigerians braced themselves for the inevitable. 

Since the subsidy removal in 2023 by President Bola Tinubu, citizens still managed to buy fuel cheaply at NNPC stations. Compared to private filling stations that sold higher to gain profits, the government-owned NNPC sold fuel at ₦610 ($0.38) per litre—shielding Nigerians from the landing cost of ₦1,200 ($0.75) per litre in imports.

However, on September 3, after succumbing to its financial reality, NNPC increased the price of fuel by more than 40%. Some of its stations sold fuel yesterday at ₦897 ($0.56) per litre. Worse, other parts of the country sold higher at ₦910 ($0.57).

While the long queues Nigerians have been witnessing these past three weeks will likely continue, fuel-dependent businesses like gig drivers will be feeling the heat.

When we spoke to a Bolt driver in Owerri, he expressed frustration yesterday. “When I got to NNPC to buy fuel this morning, they were adjusting the pump price to ₦885 ($0.56) per litre. It was shocking. There was a queue so I was unable to buy fuel after waiting for 5 hours. I left and went to another [private] filling station, and bought fuel at ₦995 ($0.63) per litre.”

With increased fuel prices, gig drivers will spend more money fuelling their cars. Yet, low fares and high commissions could eat into their daily earnings. They’ve been lobbying ride-hailing apps like Uber and Bolt via protests to increase base fares and reduce commission from the average 25% to 5%. But these apps have been understandably hesitant. Commissions make up about 50% of Uber’s earnings. An 80% reduction could see these companies lose one-tenth of their revenue.

While Uber says it has been “constantly monitoring” the local dynamics to understand the impact on the marketplace, it is possible that Nigerian gig drivers and their welfare unions will intensify efforts to lobby ride-hailing apps for better working conditions.