A former Deputy Governor of the Central Bank of Nigeria (CBN) and former presidential candidate, Prof. Kingsley Moghalu, has said that cryptocurrency has become attractive to kidnappers and terrorists who demand to be paid a ransom in the virtual currency because it is not easily traceable and is also uncontrolled by governments and central banks.
He said at the Cybertech Global 2021 conference on cybersecurity in Dubai that sub-Saharan Africa has emerged as the world’s leader in mobile financial services.
Besides Moghalu, other speakers included former Director of the Central Intelligence Agency (CIA), General David Petraeus; Director-General of Israel’s National Cyber Directorate, Yigal Unna and the former Supreme Commander of NATO Forces in Europe, General Wesley Clark.
He added that the booming fintech sector could accelerate the continent’s post-COVID-19 economic recovery.
Moghalu said the extraordinary growth of the sector presented new security challenges, which should be addressed to ensure that public confidence in emerging technology remained high.
According to him, the rise of cryptocurrency, in particular, has heightened awareness of fintech security risks, “with kidnappers and terrorists increasingly demanding that ransoms are paid in it.”
Moghalu stated that the Central Bank of Nigeria (CBN) barred cryptocurrency platforms and bank accounts from its banking system.
He, however, added that despite the restrictions, Nigeria remained one of the world’s highest traders in cryptocurrency, in particular Bitcoin, coming in third behind only the United States and Russia with over $400 million in trades in 2020.
“Overall, African countries suffer from an under-qualified cybersecurity workforce. The level of investment in cybersecurity in the fintech sector is still relatively low, although it is rising, and African banks are still vulnerable to cyber-attacks.
“There is inadequate protection of ICT infrastructure and relatively weak cybercrime laws. There is a strong need for educational campaigns for fintech users and the private sector, which hosts most fintech networks, needs to work more closely with governments in Africa to prevent and combat cybercrime.
“There is also significant opportunity for peer-to-peer exchange of best practices in cybersecurity between market players in technologically advanced countries and African countries that lead the world in fintech, but not necessarily in fintech security or regulatory technology,” he stated.
He said Africa could be proud of its world-leading role in mobile financial services, which left it well-placed to take advantage of the fintech revolution – with appropriate regulation.
“Over 50 per cent of 282 mobile money services in the world today are operating in Africa. The fintech sector in the continent has exploded over the past two decades, enabling Africa to leapfrog into the digital age as it became the world’s fastest mobile telephone market in the 2000s.
“The continent jumped from severely inadequate landline telephone infrastructure to 750 million mobile phone lines in a continental population of one billion people. Nigeria, for example, had less than 100,000 landlines in 2001, managed by the Nigerian Telecommunications Ltd. (NITEL), an inefficient and corruption-ridden state monopoly.
“Today, 20 years later, the country has 160 million mobile phone lines for its population of 200 million, following the introduction of the Global System for Mobile Communications (GSM) with licences given to private sector companies after the deregulation of the telecommunications sector,” Moghalu added.
Citing reports by the World Bank and the African Development Bank, he stated that in some African countries, more people have access to mobile phones than to clean water, electricity, or a bank account.
According to him, the fintech sector in Africa is almost entirely driven by home-grown innovation, after the innovation the M-Pesa mobile payment system in Kenya and the development of numerous payment platforms in Nigeria.
He added that few economic phenomena have demonstrated the continent’s potential the way fintech has done.