Kashifu Inuwa, Director General of the National Information Technology Development Agency (NITDA), has urged a collaborative effort between industry professionals, government officials, and experts to fully explore the potential of blockchain technology in asset management and Nigeria’s economic growth. Speaking at the Tokenised Economic Conference and Exhibitions, the event focused on the theme “Tokenised Economy 2024: Real-World Assets Tokenisation,” and was organized by Cyberchain in partnership with Baze University and NITDA.
Blockchain as a Catalyst for Economic Transformation
The conference served as a platform for discussions on how blockchain can transform various sectors by facilitating the tokenization of physical and digital assets. Inuwa stressed that the integration of this technology could revolutionize the management, exchange, and security of assets, which would in turn stimulate economic development. He underscored blockchain’s role as a major enabler for the growth of Nigeria’s GDP, with specific focus on the sectors of digital assets finance, capital markets, real estate, commodities, and fractional ownership.
Inuwa, represented by Engr. Salisu Kaka, Director of e-Government and Digital Economy Development at NITDA, highlighted the significance of converting traditional assets into digital tokens recorded on blockchain networks. By doing so, assets such as real estate or securities can be tokenized and represented digitally, enhancing both their liquidity and accessibility. This conversion, according to Inuwa, enables assets to be traded, sold, or held in a digital format, making the process more efficient and secure.
Benefits of Tokenizing Physical and Digital Assets
Inuwa explained that tokenization offers several advantages, particularly in sectors where processes are often slow and inefficient, such as real estate. Traditional methods of transferring property ownership or maintaining accurate records are often cumbersome and prone to errors. Tokenization, he noted, automates these processes, increases transparency, and improves liquidity by lowering investment barriers. The ease of automation and the potential for greater investment accessibility make tokenization an attractive prospect for real estate financing.
Additionally, Inuwa applauded Lagos State’s initiative to tokenise real estate, viewing it as a model for other states in Nigeria to follow. He suggested that the same concept could be applied across other sectors, including agriculture, oil and gas, bonds, and derivatives, where tokenization could play a critical role in wealth creation and economic growth. The move would not only simplify investment in these sectors but also offer enhanced transparency and security through blockchain technology.
Positioning Nigeria as a Leader in the Tokenised Economy
Inuwa emphasized the importance of positioning Nigeria as a frontrunner in Africa’s tokenised economy. He indicated that for this vision to be realized, it would require the establishment of clear regulatory frameworks to boost investor confidence, as well as the development of robust infrastructure to support the growing tokenised economy.
He also discussed NITDA’s ongoing efforts in promoting blockchain adoption across various sectors in Nigeria. Since the launch of the National Blockchain Policy and the formation of its steering committee, NITDA has been actively working with the blockchain ecosystem to facilitate the integration of this technology into the country’s financial landscape. Inuwa concluded that real-world asset tokenization could serve as a critical avenue for Nigeria to unlock its economic potential, create wealth, and improve the quality of life for its citizens.
Democratizing Investment Opportunities
In a related address, Dr. Emomotimi Agama, Director General of the Securities and Exchange Commission (SEC), discussed how tokenization democratizes access to traditionally exclusive markets, such as real estate and art. He explained that the digitalization of these assets enables individuals from all financial backgrounds to participate in investment opportunities that were previously limited to a select few. By lowering the barriers to entry, tokenization promotes diversification in investment and encourages broader participation in wealth-building sectors.
Agama further elaborated that the tokenization of assets such as real estate makes them more accessible to a wider range of people, effectively democratizing wealth. This transformation not only benefits investors but also fosters financial inclusion by allowing more individuals to engage in markets that were once out of reach.
Building a Foundation for the Future
In summary, both NITDA and SEC officials expressed optimism about the future of blockchain and tokenization in Nigeria. As these technologies continue to gain traction, they hold the potential to unlock new opportunities in asset management, financial inclusion, and economic growth. The collaboration between public and private sectors, along with the establishment of a supportive regulatory environment, will be key to ensuring the successful adoption and implementation of tokenized assets across various industries in Nigeria.
By investing in education, infrastructure, and regulations, Nigeria could lead the continent in embracing the tokenised economy and driving long-term economic progress.