In addition to inflation, “prolonged exchange rate risk is also at the core of [the adoption of] these dollar-denominated products,” says Temitope Omosuyi, an investment analyst at Afrinvest. “As a matter of fact, there is an adaptive expectation that the naira exchange rate will certainly stay under water.”

So even while Nigeria’s central bank (CBN) devalues the naira and creates a single exchange rate to attain stability, Nigerians do not trust that the currency will be strong in the future. One dollar has grown from 155.7 naira in June 2011 to N404 this June—and those are the official inter-bank rates. When the bank said it would restrict dollar sales to money traders in the parallel market, rates shot past N500 this August and have remained high.

Determined to fight on, the bank has sharpened its sword against aspects of the economy that are supposedly working against its mission by driving up demand for dollars—beginning with these fintechs.

A license might be the middle ground 

After issuing statements to reassure users, the affected startups have largely continued with business as usual. None of them confirmed if the court order has been implemented, but legal and compliance teams are in talks with CBN representatives for solutions.

Licensing by the CBN could be one resolution, since the suit accused the startups of operating without an asset management license. That would mean another license requirement to add to the digital sub-broker license created by Nigeria’s Securities and Exchange Commission (SEC) this year. Chaka was the first (and so far the only) startup to acquire that, an achievement it rode to a $1.5 million pre-seed raise in July.

But another reason why this suit has been controversial is that it is the SEC, not the CBN, that normally issues asset management licenses in Nigeria. Cowrywise, a company that offers savings and mutual funds services in naira, received a SEC license this year.

For Uche Aniche, an investor in Trove, the bank’s action is “depressing” and shows a failure to be strategic in managing Nigeria’s fledgling innovation ecosystem: “They are losing the big picture and are failing to leverage the opportunities these innovations avail us.”

Some have observed that additional licensing would be an undue burden for these startups. “These are tiny companies. There is no guarantee at all that they will be successful or even still alive in 10 years,” says Feyi Fawehimni, an accountant and author of a new book on Nigeria’s history. “But success or not, at the time you’re still trying to figure out your business model and survival, you have to deal with hostile regulators. That is a disadvantage.”

In a clash of big pictures, the CBN’s heavy weaponry will likely come out on top. In a world where digital technology enables money to move rapidly between markets, developing countries with less competitive financial markets are vulnerable to a significant exodus of investment to advanced economies, says Omosuyi.

But he believes Nigerians will continue hunting foreign financial assets as long as the local market remains shallow. For startups, that is both an opportunity to be grabbed and a dilemma to be defined.

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