Ghana’s e-Cedi project and lessons from Nigeria’s e-Naira

As the global financial landscape evolves with the rise of digital currencies. African nations are increasingly exploring Central Bank Digital Currencies (CBDCs) to modernise their economies, enhance financial inclusion, and stay competitive in a digital world. Ghana’s e-Cedi project and Nigeria’s e-Naira represent two pioneering efforts on the continent. 

While Nigeria launched the e-Naira in October 2021, becoming the first African country to introduce a CBDC, Ghana has taken a more measured approach, with plans to roll out the e-Cedi by the end of 2025 after years of preparation.

The Bank of Ghana (BoG) first announced its exploration of a CBDC in 2019, with the e-Cedi project gaining momentum in August 2021 through a partnership with German firm Giesecke+Devrient (G+D) to develop its infrastructure. The project has moved through feasibility studies, pilot phases, and technical refinements. After delays attributed to economic instability, the BoG has signalled its intent to launch the e-Cedi by the end of 2025, positioning Ghana as a leader in Africa’s digital currency race.

Goals of the e-Cedi

1. Financial Inclusion: Ghana aims to bring its unbanked and underserved population, estimated at over 30% of adults, into the formal financial system. By leveraging offline transaction capabilities via contactless smart cards and digital wallets, a critical feature for underserved communities tested in rural areas like Sefwi Asafo, the country sees a real chance at boosting financial inclusion.
2. Cost Efficiency: Printing physical banknotes is expensive for the BoG, costing 325 million cedis in 2022 alone. A digital currency could reduce these expenses while streamlining liquidity management.
3. Digital Transformation: With mobile money penetration already high (over 58% of Ghanaians had mobile money accounts by 2017), the e-Cedi seeks to complement existing platforms like MTN Mobile Money and Vodafone Cash, rather than competing with them. This will position the BoG as a relevant player in an increasingly digital economy.
4. Cross-Border Payments: The e-Cedi has been tested for interoperability with international partners, such as Singapore, highlighting its potential to streamline remittances, a critical lifeline for Ghana’s economy, which received $4.7 billion in remittances in 2022.
5. Innovation Ecosystem: The e-Cedi is designed to support third-party fintech development, fostering new financial products tailored to Ghana’s needs.

Nigeria’s e-Naira: a pioneering effort marred by weaknesses

Nigeria made history as the first African nation to launch a CBDC, the e-Naira, on October 25, 2021. The digital currency was launched in partnership with fintech firm Bitt Inc. Touted as a tool to boost financial inclusion, enhance monetary policy, and grow GDP by $29 billion over a decade, the e-Naira aimed to serve Nigeria’s 200 million-plus population.

Yet, nearly four years later, the e-Naira has struggled to gain traction, with significant weaknesses exposed, offering valuable lessons for Ghana.

Weaknesses of the e-Naira:

1. Low Adoption Rates: By March 2024, the e-Naira accounted for just 0.36% of Nigeria’s money in circulation, with fewer than 1 million users, and less than 0.5% of the population. The International Monetary Fund (IMF) reported in 2023 that 98.5% of e-Naira wallets, approximately 13.7 million of the 14 million created, had never been used.
2. Limited Public Awareness: Many Nigerians remain unaware of the e-Naira or its benefits. Surveys in Abuja revealed that both customers and merchants found it impractical, with little differentiation from existing mobile money services like OPay and Paga.
3. Infrastructure Gaps: At launch, the e-Naira relied on a mobile app, excluding feature phone users and those in areas with poor internet connectivity; 37.3% of Nigerians accessed the internet via mobile devices in 2022. Although a USSD feature was later added, it came too late to reverse early setbacks. 
4. Lack of Clear Use Cases: Unlike mobile money platforms offering interest on wallets or seamless peer-to-peer transfers, the e-Naira mirrors physical cash without added incentives, leaving consumers questioning its value.
5. Trust Issues: Public scepticism about government surveillance and a history of financial mismanagement eroded confidence. Many Nigerians saw the e-Naira as impractical or redundant compared to established alternatives.
6. Bank and Fintech Resistance: The Central Bank of Nigeria (CBN) issued the e-Naira directly, bypassing traditional banks and fintechs, which saw little incentive to promote it. Banks feared losing deposits to e-Naira wallets, while mobile money operators viewed it as a competitor rather than a complement.

The e-Naira’s rollout was top-down and state-controlled, with insufficient public education and engagement. Its pivot to a token-based model involving mobile money operators came too late to reverse early setbacks. Moreover, Nigeria’s economic instability, marked by inflation rates exceeding 30% in 2024, undermined confidence in a digital naira tied to a weakening physical currency.

Ghana’s e-Cedi, still in its formative stage, can learn from these missteps to chart a more successful course.

Recommendations for Ghana to avoid e-Naira pitfalls

To ensure the e-Cedi succeeds where the e-Naira failed, Ghana can adopt the following strategies:

1. Robust Public Education: Launch a nationwide campaign to build trust and awareness, emphasising the e-Cedi’s benefits, such as offline use and remittance savings, over physical cash and mobile money. Address cybersecurity concerns proactively, drawing on human-centred research showing Ghanaians’ wariness of digital systems.
2. Incentivise Adoption: Offer small interest rates or transaction discounts for e-Cedi users, distinguishing it from mobile money and encouraging uptake. Partner with merchants to provide cash-back incentives for early adopters.
3. Leverage Existing Infrastructure: Deepen collaboration with banks, fintechs, and mobile money operators to distribute e-Cedi wallets, avoiding the e-Naira’s initial isolation of key stakeholders. Ensure seamless interoperability to enhance user experience.
4. Prioritise Offline Access: Scale up offline functionality to reach rural populations, where internet access remains below 45% (per Ghana Statistical Service, 2020). This could set the e-Cedi apart as a truly inclusive tool.
5. Start Small, Scale Smart: Nigeria’s nationwide e-Naira rollout exposed logistical flaws. Ghana should expand gradually from pilot regions, refining technology and addressing feedback before a full launch.
6. Monitor Economic Stability: Time the launch to avoid periods of acute economic distress, ensuring the cedi’s value supports confidence in its digital counterpart. Coordinate with fiscal policies to mitigate inflation’s impact.
7. Learn from Nigeria’s Pivot: Incorporate mobile money operators from day one, avoiding the e-Naira’s delayed shift to a token-based model. Test cross-border functionality early to capitalise on remittance flows.

Ghana’s e-Cedi project holds immense promise to transform its financial landscape, building on lessons from Nigeria’s e-Naira experience. While Nigeria pioneered the CBDC space in Africa, its struggles with adoption, infrastructure, and trust highlight the importance of a well-executed rollout. As the e-Cedi nears its 2025 launch, Ghana has a unique opportunity to set a new standard for CBDCs in Africa, one that delivers on the promise of financial inclusion and digital empowerment.