By: Bola Sobola.
The Central Bank of Nigeria's (CBN) version of digital currency called eNaira, the first of its kind in Africa was unveiled by President Muhammadu Buhari on October 25th, 2021in Abuja. The initiative signalled the readiness of Country's Central Bank to kick start its digital currency just like China's commitment to Yuan digitalisation.
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The eNaira is a Central Bank digital currency being regulated by the Central Bank of Nigeria, denominated in Naira with the theme; "same naira more possibilities" to serve as both a medium of exchange and store of value with a prospect of offering better payment in retail transactions when compared to cash.
Expert says successful implementation of eNaira will bring great prospect with huge capacity to promote nation's economic development. A report from Reuters revealed that President Muhammadu Buhari opined that Central Bank innovation could grow Nigeria's economy by 29billion dollars in the coming decades. This may invariably surpass the estimated crypto transactions worth 566 million dollars within five years in Nigeria, all things being equal.
It is therefore worrisome that the digital version of Nigeria's electronic naira, the first attempt in Africa had very low acceptability among Nigerians considering its poor starting. Some App reviewers explained that the Mobil wallet of eNaira which has same value and interchangeable with the physical naira has multiple faults, difficult to operate and download . For example, the two eNaira wallets the Central Bank made available on the Google and Apple stores, one for individuals and the other for merchants were barely working as expected. The persistent irregularities were corroborated by Mr. Fisayo Fosudo, a Nigerian YouTuber who reviewed gadget and apps, said Central Bank has merely jumped into the project without putting its house in perfect shape.
While trying to unravell the factors behind the poor acceptability of eNaira, some experts submitted that Nigeria Central Bank should have taken time to under study the feasibilities and challenges of operating CBDC in China. Citing CBDC plan in South Africa, which is another large economy for taken its times to launch out its digital economy. And instead of rolling out its citizens' intra- country transactions, it only enters a trial of its CBDC project with other banks for international settlement by teaming up with other countries Central Banks like , Australia, Singapore, and Malaysia.
Even the success recorded so far by the Central Bank Digital Currency (CBDC) that was applauded in some quarters as a growing success was hinged on the few number of its active subscribers who are merely willing to explore the new digital technology. While others say eNaira was poorly publicised, as about 85 percent of Nigerians were said to be ignorant of eNaira digital wallet transaction. Those that were highly informed about CBDC only saw it as a replacement for cryptocurrency which is a digital asset designed as a medium of exchange where individuals coin ownership records are stored in a ledger existing in a form of computerised database with a decentralised control system that was banned in 2017. The prohibition caused great resentment and elicited varied protest among huge numbers of Nigerian youths who were said to have technically kicked against eNaira acceptability.
Some experts said, CBN should have carried out aggressive media publicity to assuage the negative perception of the youths when it's prohibited and warned about the excesses, danger of decentralised control system created in 2009 by presumably pseudonymous developer called, Satoshi Nakamoto, which exposes investors to high risk and that Bitcoin was not legal tender and unprotected in Nigeria by using both conventional and new media platforms to create massive public awareness before unveiling its digital currency.
Moreso, the reminder of the prohibition on February 5, 2021 further escalated the battle against eNaira acceptability by the youth as they perceive it as anti livelihood of young Nigerians using cryptocurrency to escape poverty and unemployment in the nation.
Although the apex bank later explained through its Deputy Governor, Adamu Lamtek, that Apex bank did not ban cryptocurrency in the country to destroy the youth livelihood but that it only prohibited the transaction of cryptocurrencies in Nigeria banking sector to curb its excesses and protect unsuspecting investors from fraudulent activities.
The main concern after the
launch of the programme in October,2021, was that the Apps only recorded over 900,000 downloads within 95 days compare to the estimated population of 250 million people living in the country.
Although,The CBN Governor, Godwin Emefiele expressed optimism over acceptability of eNaira over time considering the four years of thorough and painstaking consultations with relevant stakeholders and succesfull efforts put in place to integrate 33 banks into the eNaira platform with 500m successfully minted by the apex bank for the take-off of the programme.
The regulator said while 200m was issued to financial institutions,over 2,000 customers had also been on-boarded as at the
time of the launch.
While 87 countries were reported to be currently exploring the CBDC as Nigeria has joined the league of countries that have so far launched their CBDC projects globally, including China and South Korea.
The national set target on eNaira has not been met, as reports indicated that several merchant and retail stores in the country are yet to accept digital currency as a medium of exchange.Some analysts noted that most rural areas and regions of Nigeria, are still faced with network challenges where the network penetration is still heavily dependent on 2G and 3G networks, which spells difficulty for eNaira transactions on the internet.
Financial analysts categorically stated that"success of the eNaira is largely dependent on the number of active users,rate of merchant adoption and the value-added services available on the app".
Nevertheless,the eNaira has so many opportunities that are beneficial to the people.The analyst noted that"the eNaira has potential to unlock new opportunities for the industry".
The eNaira would increase remittances, foster cross-border trade,improve financial inclusion, enable the government to make welfare payments easily among others. It is therefore not debatable that wide acceptability of CBDC will in no small measure improve economic activities and also boost the nation's GDP. Some of the eNaira functionality delivers speedy,safe and simple trading transactional opportunities to customers and end-users. It is also easily transferrable through peer-to-peer formats, and practically programmable for any use, as it was pegged at a flat currency.
This lofty initiative of Nigeria digital currency should not be allowed to go down in flames. Federal Government should wade into the situation and embark on aggressive awareness campaign to enlighten the citizens through the use of jingles and placement of adverts on the billboard emphasising on huge economic values inherent in eNaira transaction across the nation. Adverts must also run on the media stations that would enlighten people more on economic values of CBDC.
In preparation for the nation's digital currency, the Ogun state Governor, Prince Dapo Abiodun established TechHub where different categories of people were being trained on Information Communication Technology (ICT), exposing its citizens to digital technology, particularly on website designing among other professional certifications. Records showed that about 49 percent population have received training in website designing, internet operation among other areas in computer core applications with beneficiaries ranging from civil and public servants, students from various schools, proffesional bodies, individuals as well as corporate organisations across the state.
Ogun state government has made the people more computer savvy by exposing them to higher digital technology.
Other State governments can take a cue from Ogun state in preparing their citizens for the growing digital world that has come to stay.
As a matter of fact,
Central Bank of Nigeria should make the Apps easy to download for active users and improve on its website so as to make eNaira digital wallet feasible and easy for the youths to use in building enduring livelihood that will transform into socio- economic development of the nation.
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