The paper, released on Tuesday, warns that without decisive reforms, the region could see AI-driven economic growth of just 0.2% over the same period, leaving it on the margins of the global AI revolution.

According to the IMF, Sub-Saharan Africa ranks lowest on its AI Preparedness Index and trails every other region except South Asia in AI adoption, with inadequate infrastructure, limited digital skills and weak regulatory capacity identified as the main barriers.

Martin Schindler, Deputy Division Chief and Mission Chief in the IMF’s African Department and the report’s lead author, said policy decisions made now will determine whether the region can fully benefit from AI.

“Policy changes will be key to whether further growth can be unlocked from AI,” Schindler told Reuters, adding that a 0.2% growth outcome would be “a rounding error.”

The report said the region’s biggest challenge is not the disruptive impact of AI but its ability to adopt and scale the technology quickly enough to remain competitive.

“For Sub-Saharan Africa, the central concern is not the risk of technological disruption, but whether countries will be able to adopt, adapt, and scale AI quickly enough to capture its benefits and avoid falling further behind,” the report stated.

Co-author Andrew Tiffin said reliable electricity remains the foundation for AI adoption, noting that investments in data centres could also help accelerate broader electrification across the continent.

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A few years ago, cryptocurrency occupied the fringes of Nigeria’s financial system. It was associated largely with traders, technology enthusiasts, and some young risk-takers willing to experiment with emerging financial tools. Today, that reality has changed dramatically.

I have associates who are freelancers who receive salaries in stablecoins, entrepreneurs who pay foreign suppliers through digital assets, and young professionals who quietly keep part of their savings in USDT rather than in naira accounts. For many of them, stablecoins are no longer speculative investments. They have become practical financial instruments for everyday life.

This growing adoption explains why the International Monetary Fund’s recent recommendation that Nigeria place stablecoins and other crypto assets under formal regulatory oversight deserves serious attention. The IMF’s call is not simply another warning about cryptocurrency. It is recognition that digital assets have become significant enough to warrant inclusion in discussions about financial stability, monetary policy, and economic governance.

The IMF’s concerns are coming at a time when Nigeria’s cryptocurrency market has become one of the largest in the world. Over the years, the country has consistently ranked among the leading nations in global crypto adoption. According to blockchain analytics firm Chainalysis, Nigeria recorded $95.5 billion in crypto transaction volume between 2020 and 2026.

The reasons behind this growth are not difficult to understand.

For much of the past decade, Nigerians have navigated periods of high inflation, foreign exchange shortages, and currency depreciation. Businesses have struggled to access foreign currency for imports. Freelancers working for international clients have often faced payment challenges.

In response to these challenges, stablecoins emerged as a practical solution for many users.

Unlike cryptocurrencies such as Bitcoin, whose prices fluctuate significantly, stablecoins are designed to maintain a relatively stable value by being pegged to assets such as the United States dollar. To many Nigerians, a stablecoin wallet effectively functions as a digital dollar account that can be accessed without the restrictions associated with traditional banking systems.

As a result, adoption has expanded far beyond the small community of early crypto enthusiasts.

Recent surveys have highlighted just how widespread this trend has become. Studies by BVNK, Artemis, and YouGov found that around 80 percent of Nigerian crypto users already hold stablecoins, and 95 percent of respondents expressed a preference for receiving payments in stablecoins rather than local currency. Such findings suggest that digital dollar-denominated assets are no longer niche products. They are increasingly becoming part of everyday financial activity.

Yet the IMF’s concerns are not without merit.

As stablecoin adoption expands, so too do potential risks. Large-scale movement of funds into dollar-backed digital assets could reduce the effectiveness of monetary policy and increase currency substitution. Regulators also worry about money laundering, terrorist financing, consumer protection, and the possibility of illicit financial flows moving beyond the reach of traditional oversight mechanisms.

Importantly, these concerns are not unique to Nigeria.

Across the world, governments are grappling with how to regulate an industry that evolves faster than conventional policymaking processes. The European Union has introduced comprehensive crypto regulations through its Markets in Crypto-Assets framework. The United States is actively debating stablecoin-specific legislation. Financial centres in Asia are also developing dedicated regulatory structures for digital asset providers.

The global conversation has therefore shifted. The question is no longer whether stablecoins should be regulated. The real debate is how to regulate them without undermining the benefits that have driven adoption in the first place.

Although Nigeria itself has not been standing still, the country’s approach to cryptocurrency has evolved considerably since the Central Bank of Nigeria’s controversial restrictions on banking relationships with crypto businesses in 2021. Those measures did not eliminate crypto activity. Instead, peer-to-peer transactions flourished as users sought alternative ways to access digital assets.

The lessons from that period appear to have influenced subsequent policy decisions.

Since then, regulators have gradually moved toward a more structured approach. The Securities and Exchange Commission has developed frameworks for digital asset operators, while initiatives such as the cNGN stablecoin project demonstrate growing interest in creating regulated alternatives within the digital finance ecosystem.

This shift reflects a broader recognition that outright resistance is unlikely to succeed in a technology-driven environment. Innovation tends to find pathways around restrictions when there is strong demand. Effective regulation, therefore, requires engagement rather than prohibition.

However, creating an effective regulatory framework will require more than the involvement of financial regulators alone.

The conversation is often framed as purely a central bank or securities commission issue. That is incomplete.

The National Information Technology Development Agency (NITDA) plays a critical supporting role in shaping Nigeria’s digital ecosystem. While it does not regulate financial assets directly, it influences the infrastructure and governance environment in which digital finance operates.

This is important because the challenge before policymakers is not merely financial. It is technological. Understanding blockchain systems, stablecoin architecture, cybersecurity risks and digital identity requirements demands expertise that extends beyond traditional financial supervision. Collaboration between financial regulators, technology agencies and industry stakeholders will therefore be critical.

At the same time, policymakers must avoid a common mistake that has affected technology regulation in many jurisdictions. Excessive restrictions can push legitimate activity into informal channels, making oversight even more difficult. Nigeria’s experience following the 2021 restrictions offers a useful lesson.

Ultimately, the stablecoin debate is about trust.

Millions of Nigerians did not adopt stablecoins because regulators encouraged them to do so. They adopted them because these digital assets addressed real economic challenges. They offered easier access to international payments, faster cross-border transfers, and a perceived hedge against currency volatility.

That reality is precisely why policymakers must approach regulation with care.

The IMF is right to argue that a rapidly growing segment of the financial system cannot remain outside regulatory oversight indefinitely. Consumer protection, financial integrity, and systemic stability are legitimate public interests that governments must safeguard.

However, regulation alone will not determine the future of stablecoins in Nigeria.

The greater challenge is creating a framework that protects users without stifling innovation, combats illicit activity without discouraging legitimate use, and strengthens confidence without undermining the technological progress that has made Nigeria one of Africa’s leading digital economies.

Nigeria is no longer deciding whether stablecoins matter. That question has already been answered by millions of users.

The real test now is whether regulation can catch up with reality.

Shuaib S. Agaka is a tech journalist and digital policy analyst based in Kano.

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The recommendation was contained in the IMF’s latest Article IV Consultation report on Nigeria, released following the Executive Board’s review on June 1.

According to the Fund, expanding oversight of digital assets is becoming increasingly important as Nigeria’s cryptocurrency market continues to grow, driven by retail adoption, cross-border transactions and demand for inflation hedging tools.

The IMF warned that crypto assets could pose risks to the wider financial system if left outside existing supervisory frameworks. It urged Nigerian authorities to strengthen regulation and monitoring of stablecoins and related digital asset activities.

Beyond crypto regulation, the Fund recommended maintaining a tight monetary policy stance until inflation is firmly under control and encouraged the Central Bank of Nigeria to continue its transition toward an inflation-targeting framework.

The IMF also supported Nigeria’s flexible exchange rate regime, called for the gradual removal of remaining foreign exchange restrictions and urged regulators to accelerate the implementation of Basel III banking standards.

The report highlighted other areas requiring attention, including rising non-performing loans, sovereign debt exposure, infrastructure development, governance reforms and improvements in macroeconomic data collection.

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IMF Managing Director Kristalina Georgieva raised the concern in a blog post citing new IMF analysis of millions of online job vacancies across advanced and emerging economies.

According to the Fund, one in 10 job postings in advanced economies and one in 20 in emerging market economies now require at least one new skill, highlighting how employability is increasingly tied to continuous learning and reskilling.

The analysis shows that technological change is no longer limited to factory floors or back-office functions, with professional, technical and managerial roles accounting for the bulk of demand for new skills. The information technology sector alone represents more than half of this requirement.

“For workers, finding or keeping a job will increasingly depend on the ability to update skills or learn new ones,” Georgieva said.

Sector-specific skills are also on the rise, with healthcare roles increasingly demanding telecare and digital health capabilities, while marketing jobs now require social media expertise.

The IMF found that employers are willing to pay more for workers with emerging skills. In the United Kingdom and the United States, job postings requiring at least one new skill offer wages around 3% higher, while roles demanding four or more new skills can pay up to 15% more in the UK and 8.5% more in the US.

However, the employment impact is uneven. While high- and low-skilled workers benefit, middle-skill roles such as routine office jobs are under increasing pressure. Regions with high demand for AI skills recorded 3.6% lower employment in AI-vulnerable occupations after five years.

The IMF warned that without proactive policies, AI could widen inequality, noting that nearly 40% of global jobs are exposed to AI-driven change.

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In a recent call to action, the International Monetary Fund (IMF) has emphasized the urgent need for national cybersecurity strategies following staggering losses incurred by global banks due to cyberattacks.

According to the IMF’s April 2024 Global Financial Stability Report, released just days ago, financial institutions have suffered a collective loss of $2.5 billion over the past four years alone.

The report highlights that this figure is part of a larger trend, with a total of $12 billion lost to cyberattacks over the past two decades.

The IMF underscores the necessity for central banks and regulatory authorities to develop robust cybersecurity strategies, coupled with effective regulations and supervisory capacities to mitigate risks effectively.

One of the key recommendations outlined in the report is the periodic assessment of the cybersecurity landscape by financial institutions, with a focus on identifying potential systemic risks stemming from interconnectedness and concentrations, including those arising from third-party service providers.

Moreover, the IMF advocates for an emphasis on enhancing cyber hygiene practices within financial institutions, encompassing measures such as bolstering online security, implementing anti-malware solutions, adopting multifactor authentication, and instituting comprehensive training and awareness programs.

Recognizing the critical role of governance in cybersecurity risk mitigation, the IMF urges financial institutions to ensure board-level access to cybersecurity expertise, as enhanced governance structures have been shown to significantly reduce cyber risks.

Additionally, the report stresses the importance of robust data reporting and incident sharing mechanisms among financial sector participants to bolster collective preparedness against cyber threats.

Financial firms, which handle vast amounts of sensitive data and transactions, remain prime targets for cybercriminals aiming to steal money or disrupt economic activities.

The IMF warns that such attacks could undermine confidence in the financial system, disrupt critical services, and potentially trigger spillover effects to other institutions.

Notably, the report highlights disparities in cyber incident exposure between advanced economies, particularly the United States, and emerging markets and developing economies.

This call for action comes in the wake of alarming findings from the Financial Institutions Training Centre, revealing a significant surge in financial fraud within the Nigerian banking sector.

The report for the second quarter of 2023 recorded a staggering increase of 276.98% in fraud cases, with losses amounting to N5.79 billion, representing a rise of 1,125% compared to the preceding quarter.

As cyber threats continue to evolve in complexity and scale, the IMF’s call for immediate action underscores the imperative for concerted efforts to fortify cybersecurity frameworks and safeguard the stability of the global financial system.

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Artificial Intelligence can amplify some of the benefits of the eNaira and other Central Bank digital currencies, the International Monetary Fund has disclosed.

It stated that those benefits include improving financial inclusion through the provision of rapid, accurate credit scoring based on various data.

According to the Washington-based lender, the benefits of CBDCs will depend on how technologies evolve.

The IMF Managing Director, Kristalina Georgieva, revealed this during her keynote address at Singapore Fintech Festival.

She said, “AI, for instance, could amplify some of the benefits of CBDCs. It could improve financial inclusion by providing rapid, accurate credit scoring based on various data.

“It could provide personalised support to people with low financial literacy. To be sure, we need to protect personal privacy and data security, and avoid embedded biases, so we don’t perpetuate inequality, but aim to reduce it. Managed prudently, AI could help.”

She stated further that the tokenisation of financial assets, such as bonds issued on blockchains will open another door to CBDC, potentially in wholesale form, to pay for these assets.

Georgieva stressed that the benefits of CBDCs would stem from what happens in the payments’ environment, and that would depend on how many other countries adopt CBDCs, and to what extent would cash become obsolete.

She argued that many countries were investigating CBDCs and were developing regulations to guide digital money developments.

However, she noted a lot of work still needed to be done and there was still so much more space for innovation because of the plenty of uncertainty over use-cases for CBDCs.

She declared that the public sector must keep preparing to deploy CBDCs and related payment platforms in the future.

Noting what the success of CBDCs would be hinged on, the IMF MD said, “The success of CBDCs will rely on policy decisions and how the private sector responds. The actions of many of you here today will matter. Country authorities wishing to introduce CBDCs may need to think a little more like entrepreneurs.

“Communication strategies, and incentives for distribution, integration, and adoption, are as important as design considerations.”

She further announced the launch of a CBDC Handbook by the IMF, noting that the handbook was intended to collect and share knowledge on CBDCs for policymakers around the world.

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TECHDIGEST – Since its launch in 2021, the usage of the eNaira — Nigeria’s digital currency — has refused to pick up, the International Monetary Fund has disclosed.

According to the fund, only about eight per cent of eNaira wallets are in use, with an average transaction value of N53,000.

It stated that as of November 2022, total eNaira wallet downloads amounted to 942,000.

It revealed this in its ‘Staff Report for the 2022 Article IV Consultation: Key Issues’ and ‘Nigeria: Selected Issues’ reports.

The IMF said, “Despite some initial technical glitches (Coincu, 2022), no major risk factors (e.g., a large-scale cybersecurity event) have materialised.

“However, the adoption of eNaira by households and merchants has been rather slow. After a strong initial uptake, wallet downloads have slowed, reaching 0.8 per cent of bank accounts, and merchant wallet downloads amount to about 10 per cent of merchants with Point-of-Sale terminals.

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“Similarly, wallet activity is low, with most wallets appearing inactive. The average number of weekly eNaira transactions since the launch amounts to only eight per cent of wallets, with an average transaction value of N53,000 (about $120).”

When Nigeria launched its central bank Digital Currency, it became the second country after The Bahamas to launch a CBDC.

At the launch, the President, Major General Muhammadu Buhari (retd), noted that the eNaira would help more people and businesses move from the informal to the formal sector.

He said, “Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of and concerns of the economy.

“The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country.”

According to IMF, the eNaira is supposed to increase financial inclusion. It noted that for this goal to reach, the CBN needs to allow those without bank accounts but with mobile phones access the digital currency.

It also noted that the use of digital currency could lower remittance fees in the country.

Commenting on how the country can drive increased usage of the eNaira, the Washington-based lender noted the apex bank needs to create the right relationships with mobile money operators and engage in public and private partnerships.

It said, “Setting the right relationship with mobile money.

“A well-designed public and private partnership are required to ensure the proper safeguard of e-money/mobile money, considering that the private financial sector’s contributions to financial inclusions could be negatively affected depending on the design of eNaira’s use for financial inclusion.

“eNaira could be usefully integrated into the existing mobile payment system by (i) functioning as a safer store of value for mobile money users through an integrated mobile-CBDC wallet.”

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TECH DIGEST – As the Central Bank of Nigeria prepares to launch its own digital currency, the International Monetary Fund (IMF) has warned against countries adopting cryptocurrency.

October has been chosen as the date of the launch, but the IMF said any country that adopts cryptoassets as national currency will have economic challenges.

Why is IMF against cryptocurrency?
The IMF stated that the decision will cut government-generated revenue and have an adverse effect on macroeconomic, while domestic prices could become unstable due to widespread adoption.

Nigeria’s adoption of a national cryptocurrency won’t be good for the banks and the country’s economy according to IMF report

It also noted that massive fluctuations in cryptocurrency prices could negatively impact banks and other financial institutions. This was contained in a blog post on Monday.

IMF said the adoption of cryptocurrencies as national currency is an “inadvisable shortcut”, and could result in legal issues and a weak monetary policy.

In the post, IMF opined that the risks and costs outweigh potential benefits while admitting that some cryptocurrencies are indeed secure, easy to access, and cheap to transact.

Can cryptocurrency become store of value?
The international credit body explained that cryptocurrency will most likely only serve as vehicle for unbanked people to make payments, but struggle to be relevant as a store of value because investors will be quick to cash in.

IMF buttressed its point with the crash of bitcoin which was selling for about $65,000 in April before crashing in June to less than half of the value.

It stated that the crypto assets will struggle to penetrate countries with stable inflation and exchange rates, as well as credible institutions.

“Even in relatively less stable economies, the use of a globally recognized reserve currency such as the dollar or euro would likely be more alluring than adopting a cryptoasset.

The North American country adopted bitcoin as its official national currency, adding it to the US dollar which it had been using for over ten years.

El-Salvador said the cryptocurrency will help deepen financial inclusion and increase their remittance inflow. This makes the country the one nation to adopt bitcoin officially.

Businesses in El-Salvador now accept bitcoin for transactions, and the country’s central bank said it will be zero risks to businesses.

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