Nigeria among countries with most-attacked ID documents

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By Ifeoluwa Adebayo & By Bunmi Bailey

Nigeria is among the 10 countries with the most-attacked ID documents by fraudsters in Africa, a new report by Smile ID, an African digital ID verification platform, has said. The latest 2024 report of digital identity fraud in Africa shows that identity fraud in West Africa is largely dominated by two countries, Nigeria and Ghana. “Due to the broad adoption of digital and biometric ID verification in Nigeria, the use of physical documents is less common than in other markets,” the report said.
It said Ghanaian ID documents have a higher fraud rate and that the Ghanaian Social Security and National Insurance Trust, in particular, has the highest fraud attempt rate of 20%. “In the last two years, a large number of fraud attacks were directed at National ID cards, which accounted for 80 percent of all document fraud attacks. However, 11 out of the top 19 most attacked document types were also National IDs, with the Kenyan ID being the most vulnerable at a 25 percent fraud rate.”
According to the report, Nigeria is among the top 19 countries that has two most-attacked ID documents, which are National ID card with fraud rate of 18 percent and Voter ID card with fraud rate 12 percent. “With more national ID documents in circulation than ever before, the chances of them getting lost or stolen get increasingly higher by the year, exposing holders to potential document fraud,” it said. Out of the top five most attacked ID documents in the East African region, four are national IDs and Kenya’s ID has the highest rate of fraud in the region.
“There are several contributing factors, one of which is the continued prevalence of old National ID cards, which are constructed of black and white paper images, laminated in plastic,” authors of the report said. “The newer Huduma Namba cards have faced several challenges to adoption, beginning with opposition in the courts to how the data were collected. The current government in Kenya has announced more investment in, and consolidation of, existing ID systems in 2024,” they added. Tanzania’s National ID emerged as the second most attacked with a 32 percent attempted fraud rate, while Kenya’s National ID ranked third at 26 percent.
In a related development, The Central Bank of Nigeria (CBN) recently gave a directive to deposit money banks and Other Financial Institutions (OFIs) to accept Machine Readable Travel Documents (MRCTD) and Refugee Identification Card, as means of identification for bank transactions.
This followed the challenges encountered by refugees and asylum seekers concerning means of identification during financial transactions. Analysts said allowing refugees’ identification cards for transactions would enhance financial inclusion. A circular signed by Kevin Amugo, Director, Finance Policy Regulation Department, referred all banks and OFIs to the provisions of the CBN AML/CFT Regulations 2013 (as amended) on customer due diligence.
The CBN noted that the MRCTD issued by the Nigeria Immigration Services; and the Refugee Identity Card issued by the National Commission for Refugee, Migrants and Internally Displaced Persons, are adequate means of identification for banking transactions. Banks and other financial institutions are also required to continue to ensure that effective customer due diligence policies and procedures are implemented to combat money laundering, financing of terrorists, as well as the proliferation of weapons of mass destruction.
Some of the challenges to be considered before issuing a Central Bank Digital Currency, ICDC, highlighted in the report involve the ability of governments to improve access to digital infrastructures such as a phone or internet connectivity. While the region has made significant strides, more investment is needed.
Central banks will need to develop the expertise and technical capacity to manage the risks to data privacy, including from potential cyber-attacks, and financial integrity, which will require countries to strengthen their national identification systems so know-your-customer requirements are more easily enforced, the report said.
There is also a risk that citizens pull too much money out of banks to purchase CBDCs, affecting banks’ ability to lend. This is especially a problem for countries with unstable financial systems.
It concluded that Central Banks will also need to consider how CBDCs affect the private industry for digital payment services, which has made important strides in promoting financial inclusion through mobile money.
At a recent IMF webinar, Kingsley Obiora, deputy governor, Economic Policy Directorate of the Central Bank of Nigeria (CBN) said that having a digital identity, technology, the right laws, clarity, and public awareness of the benefits of having a digital currency are some tips to consider when adopting or intruding digital currencies.
“You cannot stress the importance of having a digital identity for consumers because if you don’t have that, once you introduce a digital currency you might have a problem,” Obiora said. Obiora also said a lot of countries may need to review their laws to be able to even issue a digital currency. Nigeria did not enact news to enable its digital currency operation since the CBN was already empowered to issue any form of currency subject to the approval of the president and the bank’s board.
Last year, the CBN launched the e-Naira as a legal tender, making Nigeria the first African country to launch a CBDC. According to President Muhammed Buhari, a properly managed e-Naira could add more than $29 billion to Nigeria’s GDP over the next 10 years.

The Central Bank of Nigeria


A recent Global CBDC Index by PricewaterhouseCoopers (PwC) ranked Nigeria, Bahamas, China, Jamaica, Eastern Caribbean, Ukraine, Uruguay, Thailand, Sweden, and the Republic of Korea in the top 10 category of countries leading the race in digital currency.
Andrew Nevin, the chief economist at PwC Nigeria noted that CBDCs will transform the payment system, as low value-added transactions become possible in a costless and secure way for everyone.“The success could also catalyze more complex and transformative CBDC uses, including blockchain identity management, land registry, and supply chain verification. As each of the use cases develops, we can bring more people into the economic and financial system and lift tens of millions out of poverty,” Nevin said.
The report further highlighted that as of December 2021, about 666,000 eNaira speed wallets had been created followed by 700,000 speed wallet App downloads, more than 35, 000 total transactions, 90 percent of transactions are the person to business and business to person and 160 countries downloaded the e-Naira speed wallet App.
“The digital currency is expected to support the country’s target to raise the level of financial inclusion from 64 percent to 95 percent. By making the E- Naira platform part of the financial ecosystem, the CBN hopes to grow new private-sector use cases to support the uptake of the CBDC,” the report states.

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