CBN unveils plan to revamp eNaira

Joy Onuorah
Joy Onuorah
CBN unveils plan to revamp eNaira

The Central Bank of Nigeria is taking steps to revitalize its digital currency, the eNaira, in a bid to boost adoption and usage.

This marks the latest update in the country’s ongoing efforts to enhance its Central Bank Digital Currency and attract more users to the innovative financial system.

In a recent statement posted on the CBN’s official Twitter account, the acting governor, Folashodun Shonubi, announced the forthcoming changes to the eNaira model.

The apex bank aims to encourage greater participation and increase transaction volumes through these strategic modifications.

The CBN is actively amending the current model of the Central Bank Digital Currency, the eNaira, with a focus on expanding the number of active wallet holders.

Since its launch in October 2021, the eNaira has faced challenges in garnering widespread acceptance and utilization among the Nigerian population.

Despite efforts by the former CBN governor, Godwin Emefiele, to promote its adoption, the eNaira’s appeal and usefulness among Nigerians have been limited.

On October 25, 2021, under the leadership of the now-embattled ex-Governor, Godwin Emefiele, Nigeria made history by being the first African country to introduce a CBDC with the launch of the eNaira.

However, almost two years later, the digital currency continues to struggle for relevance, with public reception remaining largely underwhelming.

Earlier this year, the CBN engaged in talks with new “technology partners” to develop an enhanced system for managing the government-backed digital currency.

The objective was to create an independent software solution for the eNaira, providing the CBN with full control over its operation.

During the peak of the nation’s cash crunch in February-March, there was a brief resurgence of activity for the eNaira, with transactions surging by 63% to 22 billion Naira ($47.7 million) since its launch. The number of eNaira wallets also witnessed a significant increase, reaching 13 million.

Former CBN Governor highlighted the eNaira’s role as the preferred electronic payment channel for financial inclusion and social interventions.

However, despite these promising developments, the International Monetary Fund noted that adoption of the eNaira remained notably low, with a staggering 98% of digital wallets unused.

The IMF revealed in their research paper titled ‘Nigeria’s eNaira, One Year After’, “The average number of eNaira transactions per week amounts to about 14,000, representing only 1.5% of the total number of wallets available. This indicates that 98.5% of wallets have not been used even once.”

Given the region’s financial inclusion and remittance challenges, the IMF observed that the adoption rate fell disappointingly below expectations.

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