As the Central Bank of Nigeria celebrates one year since the launch of its CBDC, we look at its success and future.
On its launch on 25 October 2021, Nigeria became the first country in Africa to enable the use of a legal tender digital currency for daily financial transactions. One year on from the launch of Nigeria’s digital currency eNaira, it is clear that it has not been a complete success.
One of the largest issues currently facing the eNaira is the lack of adoption among citizens. A recent Bloomberg report found that less than 0.5 per cent of Nigerians are using the digital currency. This means less than one in 200 people in Nigeria are active users of the eNaira. This is despite having a year to promote and encourage the adoption of the CBDC.
During a ceremony held by Nigeria’s central bank, to celebrate one year of the eNaira, its governor Godwin Emefiele spoke on its use. He explained that eNaira had recorded around 700,000 transactions worth over ₦8billion.
Despite this seemingly positive statistic, Bloomberg also reported that around one million Nigerians had downloaded the eNaira digital wallet. This suggests that over 300,000 wallets have been opened but are not used.
The future of the eNaira
As Nigeria’s central bank looks to tackle problems with adoption, it has turned to the nation’s popular three-wheeled taxi service. Drivers and passengers of the motorised tricycles, locally known as ‘Keke Napep’, who use eNaira will receive a five per cent discount.
The aim of this initiative is to get a much larger proportion of Nigerian citizens to use the CBDC. Such incentives may be required to turn opinions of the currency around. Many Nigerian citizens remain confused following a ban on cryptocurrency followed by the launch of crypto-like eNaira.
The main technology and service provider for eNaira, Bitt, has outlined its upcoming plans for eNaira. The digital currency solution provider explained its plans for the next phase of the CBDC:
- Onboarding of Nigerian Trade and Exchange platform
- Sector-specific tokens for grants and subsidies
- Programmable payments for eNaira payment scenarios
Brian Popelka, CEO of Bitt offered his thoughts on the digital currency’s first year. He explained: “This year has been full of firsts for Africa. Being the first provides the opportunity to become the first to find solutions and chart the course for others to follow.
“[eNaira’s] one-year milestone is an exceptional achievement for both the Central Bank of Nigeria and Bitt. We look forward to continued partnership on this CBDC deployment journey and providing additional features to expand eNaira’s value to all Nigerians and everyone, everywhere.”
Bitt also explained its efforts to ensure that Nigerians have a role to play for eNaira. It has expanded its global team, including Nigerian engineers, product managers and executives.
Imran Khan, EVP of partnerships at Bitt, said: “Utilising local talent cements our commitment to Nigeria and to the entire African continent as we endeavor to lower infrastructure cost and improve the access and user-experience of receiving and sending money, thereby promoting financial inclusion throughout Africa.”