Nigeria has elected Bola Tinubu as its new president in a hotly contested presidential election, that took place amidst a backdrop of crippling cash shortages and high inflation.
Outgoing President Muhammadu Buhari’s term was marred with nationwide anti-police brutality riots, rising inflation, and protests over cash shortages resulting from complications of a plan to swap old banknotes for new ones. Buhari, having served the maximum of two terms, could not run for a third term.
Opposition parties in the country have disputed the results of the election, which saw Tinubu, from the same political party as Buhari, emerge as the new leader of the West African nation.
The Central Bank of Nigeria, under Buhari’s administration, issued a digital naira in October 2021 to encourage electronic payments and rival the adoption of private cryptocurrencies in the country.
Nigeria’s tech-savvy, young population made the nation one of the fastest crypto adopters in the world, despite attempts by the government to put a damper on use.
However, uptake in the eNaira use has been slow, and people have not been turning to the digital currency, partly due to a lack of merchants accepting it as payment.
The value of the naira continued to fall, and local demand for the U.S. dollar may have risen, as indicated by the black market exchange rates for the currency in Nigeria.
Under the Buhari administration, the central bank also prohibited local banks from offering services to crypto companies. It remains unclear what Tinubu’s position on crypto is, but he plans to boost the country’s private sector to uplift an economy struggling with 21.8% inflation, fuel shortages, and a cash shortage.
Tinubu’s election comes at a crucial time for the country, which is experiencing economic challenges amidst a global pandemic.
The Nigerian government must address the cash shortages and inflation plaguing the nation to foster a stable economic environment.
Additionally, addressing the use of cryptocurrencies in Nigeria is another challenge that must be addressed to enable the country to keep pace with the rest of the world. It remains to be seen what measures Tinubu will take to tackle these issues, but his election presents a new opportunity for Nigeria to forge ahead in its economic recovery.
