How Nigerian Central Bank Seeks To Revive eNaira As Digital Currency Hits N18.32billion Transactions

The Central Bank of Nigeria (CBN) has rolled out fresh plans to conduct a “comprehensive review of the eNaira’s implementation to enhance its effectiveness and broaden its economic impact” in the country.

According to the CBN governor, Olayemi Cardoso, the review of the eNaira will identify and address key barriers to adoption, with a focus on fostering trust, usability, and widespread acceptance of the digital currency.

The CBN review comes as a result of several media reports including SaharaReporters’ story on how despite its launch in 2021, millions of Nigerians are yet to explore the usage of Africa’s first digital currency.

SaharaReporters in November 2024 reported that as of March 2024, the currency in circulation stood at N3.87 trillion, out of which CBN Digital currency (eNaira) stood at N13.8billion representing a merely 0.36% of the total currency in circulation.

SaharaReporters had gathered that one of the challenges listed against the use of eNaira is that cash is the prevailing method of transaction in Nigeria.

The eNaira is a Central bank digital currency issued and regulated by the Central Bank of Nigeria. Hence it was the first of its type in Africa.
 
SaharaReporters had reported that in October 2021, the Nigerian government launched the eNaira, which is otherwise termed as Africa’s first digital currency.

According to the Nigerian government under former president, Muhammadu Buhari, in 2021, launching eNaira was going to be pivotal and key to enabling more remittances and growing Nigeria’s economy.

The eNaira is a digital currency issued and regulated by the Central Bank of Nigeria. Hence it was the first of its type in Africa.

Meanwhile after several media reports, the CBN said it had adopted “innovative technologies, enhancing cybersecurity, and aligning with global standards to improve the efficiency and security of transactions.”

The CBN also released a report that the value of  eNaira rose by 78.8 percent year-on-year (YoY) to N18.32 billion in the first ten months of 2024 (Q3’24) from N11.66billion in the corresponding period of 2023.

The analysis of data from the Central Bank of Nigeria (CBN), Monthly Economic reports for the review period showed that the value of eNaira was stable   in Q1’24 at N13.98 billion in 2024 from the previous quarter Q4’23.

The value grew by 31 percent YoY to N18.38 billion in Q2’24 but fell by 0.16 percent to N18.35 billion in Q3’24.

However, Month-on-Month, MoM, the value of eNaira fell by 0.16 percent to N18.32billion in October.

The CBN Governor, Cardoso, also revealed the apex bank’s Payment System Vision 2025, adding that a comprehensive review of the eNaira implementation would be made to enable broad and positive economic impact.

Speaking at the 59th Annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria, CIBN, Cardoso said, “To further enhance confidence in the payment system, our Payment System Vision 2025 initiative will drive initiatives to encourage quick and affordable cross border payment, a critical step toward unlocking trade , investment and economic growth.

“Additionally, the eNaira, our CBDC, holds significant growth potential.
“We will therefore undertake a comprehensive review of its implementation to optimise broad and positive economic impact.”

The Central Bank of Nigeria (CBN) also said it had launched a new naira payment solution aimed at enhancing payment turnaround time for Ministries, Departments, and Agencies (MDAs) by 70%.

Enabling a digital payment currency or payment systems would help to deepen the digital public infrastructure (DPI) in any country, which is the reason behind the eNaira initiative.

The Digital Public Infrastructure (DPI) is a foundational system that supports public services like digital identity systems, payment platforms, and broadband networks.

SaharaReporters had sampled the awareness of Nigerians on eNaira; only two of the 15 persons sampled have an idea of what eNaira, depicting a challenge of abysmally low awareness among Nigerians on eNaira.

POS operators who conversed with SaharaReporters also showed lack of knowledge of what eNaira is or how to use it for transactions.

This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa (MFWA) and Co-Develop.  (SaharaReporters)