The launch of Africa’s first digital currency, eNaira, has cast some doubt of hope on West Africa’s single currency.
According to the Economic Community of West African States, the introduction of the Eco, a new currency for the entire area, would help remove trade and monetary barriers, promote economic activity, and enhance living standards in the community of 385 million people (ECOWAS).
In West Africa’s 15 countries, seven currencies are now in use, with CFA francs being used by eight largely French-speaking countries.
The countries that remain have their own currencies, none of which are readily convertible. Following several postponements (in 2005, 2010, and 2014) following its creation in 2003, a realistic date for the Eco’s debut was set for January 2020, but it never transpired, as expected.
Meanwhile, the Central Bank of Nigeria (CBN) announced Africa’s first Central Bank Digital Currency (CBDC) in October, generating widespread national and international interest in how effectively the electronic currency will work and what problems it will answer in the banking and finance sectors.
In just over a month after activation, eNaira was used to complete 37,810 transactions, increasing the total amount of transactions to almost N208.91 million. The supply of eNaira in circulation as of November 29, 2021, was N62.46 million.
After initial delays owing to the country’s independence anniversary celebrations, the eNaira became live on October 25, 2021. Both merchant and consumer wallets went live on the same day, although consumer wallets have been activated in greater numbers than merchant wallets.
The CBN, Payment Service Banks (PSBs), and other financial institutions forecast higher uptake in 2022, with over 500,000 downloads in the first month and 114,900 active wallets trading over the platform.