“The adoption of the central bank digital currency and its underlying technology, called blockchain, can increase Nigeria’s gross domestic product by $29 billion over the next 10 years.”
Those were the words of Nigeria’s president Muhammadu Buhari at the launch of the country’s — and Africa’s first — national digital currency, eNaira, by the Central Bank of Nigeria (CBN) on October 25, 2021. Nigeria, at the time, was one of the five countries in the world to develop a central bank digital currency (CBDC).
Being a novel idea, the eNaira was conceived, as part of the apex bank’s cashless policy — to make financial transactions easier and seamless for every stratum of society and as the president stated, boost Nigeria’s struggling economy.
Exactly one year after, the question on the lips of many is: how has the eNaira fared? The answer lies in the numbers, and they have shown that the digital currency is yet to be fully embraced by Nigerians, thanks to the relatively low adoption despite efforts by the CBN to achieve a critical mass of users.
To put into context, the eNaira recorded ₦4bn transactions in 10 months, which experts believe is underwhelming.
The problem with the eNaira
That Nigerians are in love with virtual currencies is a known fact. The astronomical growth of cryptocurrency is a pointer to this.
Last year, Nigeria ranked sixth in the 2021 Global Crypto Adoption Index published by blockchain analytics organization Chainalysis. According to a recent report, 27 per cent of Nigerian Internet users own cryptocurrency data.
But when the CBN introduced eNaira, about seven months after it banned cryptocurrency transactions in the country, Nigerians were quick to express displeasure with the digital currency, despite its heavy promotion by the authorities.
Even the ‘Same Naira, More Possibilities’ tagline wasn’t enough to convince citizens who appeared to have lost faith in the apex.
“I am still at a loss on what eNaira is meant to solve other than helping the government print money,” Victor Asemota tweeted two days after eNaira’s launch.
Like a crypto-user friend told me, “You don’t ban cryptocurrency and expect us to jump on a government-owned digital currency. It isn’t possible.” That said, the features of the eNaira had also come under fire.
Bad reviews forced the eNaira Speed wallet to be taken off Playstore, barely 72 hours after it went live. Though the app later got restored, that single event reflected the seeming distrust in the apex bank and its policies.
On the other hand, experts equally believe the eNaira hasn’t sufficiently addressed setbacks in payments. In other countries where CBDCs have been adopted, they are used for cross-border payments, but the same can’t be said of the eNaira yet due to certain concerns.
Still, the CBN wants a ‘totally cashless’ economy
For the CBN governor, Godwin Emefiele, the destination with the eNaira is to achieve a ‘100 per cent cashless’ economy.
How the apex bank intends to pull this off remains unstated, considering the fact that almost half of Nigeria’s population lives in poverty and many Nigerians still don’t operate bank accounts. It’s fair to say cash is still king. However, there is a brighter side to this situation.
Per recent data from the Nigeria Inter-Bank Settlement Systems (NIBSS), e-payment transactions hit ₦32.8 trillion in September. This means one thing: Nigerians are gradually going cashless.
Speaking at an event to mark the one-year anniversary of the digital currency on Tuesday, Emefiele disclosed that the eNaira has recorded 700,000 transactions worth ₦8 billion in the one year since its launch.
While this may be considered a remarkable improvement in the numbers in just two months when compared with the ₦4 billion earlier reported, achieving a totally cashless economy will require a lot more on the part of the CBN.
“It [the introduction of eNaira] is deliberate. The journey has been to make Nigeria a predominantly cashless economy where people will conduct banking and financial services with little or no cash,” Emefiele added.
Inclusion is key
If there is anything experts and even stakeholders agree on in resolving the eNaira debacle, it has to be the need to make the eNaira more attractive to everyday Nigerians especially small business owners; many of which are still unaware of the digital currency and its offerings.
The CBN governor had said the apex bank hopes to “deepen the integration of the eNaira with the existing national payment infrastructure” as the next phase of adoption targets about 8 million unbanked users.
With roughly one million customers successfully onboarded, the eNaira undoubtedly has a long way to go.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!