More cryptocurrency trading takes place in Nigeria than almost anywhere else in the world, reflecting a loss of faith in more traditional forms of investment, as Ijeoma Ndukwe reports.
Tola Fadugbagbe remembers moving to Lagos from her small southwestern town 10 years ago with dreams of better prospects. Instead, the 34-year-old ended up in a string of odd jobs earning the minimum wage to survive, a typical story of many young Nigerians who are just trying to survive. It wasn’t until 2016 that online Bitcoin ads piqued his interest and he began his cryptocurrency journey.
I was spending hours every day watching YouTube videos and reading articles about Bitcoin. I didn’t have a lot of money, so I started with $ 100 to $ 200.” At the time we spoke, Mr Fadugbagbe, who now trades full time and teaches budding investors, said that he had cryptocurrencies worth more than $ 200,000 (£ 140,000) in his possession.
I’ll be moving into my own house soon, which I’m building. I have a farm, a very large one, courtesy of cryptocurrency,” he laughs cheerfully, free of worry that he may be inflating an investment bubble that one day burst. No Nigerian ever gets into cryptocurrencies and wants to look back. It’s a great opportunity. Success stories like Fadugbagbe’s have drawn millions of Nigerians to digital currencies like Bitcoin.
A 2020 online survey by data platform Statista found that 32% of Nigerians who participated used cryptocurrencies, the highest proportion of any country in the world. Estimates show that of the 10 countries with the highest volume of trade, Nigeria ranked third after the US and Russia in 2020, generating more than $ 400 million worth of transactions.
Although Nigeria has emerged from its second recession in less than five years, the challenging economic climate persists, making alternative sources of income and alternative currencies attractive. The Central Bank of Nigeria devalued the currency, the naira, by 24% last year. There are fears of a further decline in value of up to 10% this year. Meanwhile, prices continue to rise, with food inflation rising to its highest point since July 2008.