Six months after making its debut, the impact of the eNaira and its attendant benefits should be felt, otherwise the Central Bank of Nigeria (CBN) and the banking sector community should take the steps to drum more support for its widespread use and application, writes Group Business Editor, SIMEON EBULU.
At its launch on October 25, last year, the glee, at least from the Central Bank of Nigeria’s (CBN’s) perspective and public expectation, was palpable. It was meant to be yet another milestone accomplishment of the apex bank given its many success stories and undertakings by its leadership.
The eNaira, otherwise known as the Central Bank Digital Currency (CBDC), came to offer succour and an alternative transactional currency to Nigerians, especially to those who had embraced trading in cryptocurrencies, an enterprise which the CBN frowned at and refused to endorse as a legal tender in the country.
Within the period that cryptocurrency transactions lasted, it permeated the financial transaction space and was embraced in business intermediation and payments even after its proscription by the regulator.
The extent to which crypto transactions had gained acceptability in the nation’s banking and financial industry, either in form of bitcoins or other variants, can best be appreciated when you consider that some banks continued to offer the service through their platforms to customers in violation and defiance of the banking sector regulator’s expressed position.
The heavy fines imposed by the CBN on the offending financial institutions underscored this. However, the continued engagement in the practice in the face of the ban, equally demonstrates how gullible and susceptible the financial institutions can be when profit considerations and the bottom line figures come to the fore.
To erase any doubt about its resolve to take crypto transactions out of financial system, the CBN, at the CBDC unveiling, brought to bear the weight of the Federal Government, first by taking the eNaira launch to the State House and secondly, by inviting the President to kick it off.
The birth of the CBDC was so well orchestrated at its launch that its success thereafter, was presumably taken for granted.
Digitalisation, no doubt, is the way to go as the CBN Governor, Godwin Emefiele, remarked at one of his Bankers Committee meetings. The apex bank should receive credit and commendation, and not condemnation for this step. Emefiele had said the building of a robust payment system that would provide cheap, efficient and faster means of conducting payments for most Nigerians has always been the focus of the apex bank. He’d pointed out that the growing pace of digitisation globally makes it essential that we leverage digital channels in fulfilling this objective.
As proof, he said transaction volumes using digital channels more than doubled between 2018 and 2020, as volumes rose from N1.3 billion to over N3.3 billion financial transactions in 2020. The recognition of this development should, therefore, put a systemic burden on the CBN over the eNaira, it being not only the driver of the project, but, more importantly the owner of the product.
The apex bank, evidently has initiated, pursued and warehoused many projects. Some of these pioneered by the CBN for which it has provided financial backing, include the Anchor Borrowers Programme (ABP), which has earned itself almost a household name among rice farmers in many northern states.
The various interventions across many industries, including power, manufacturing, aviation, the entertainment and film sectors, and very recently, the Infraco, which is aimed at redressing the parlous and comatose infrastructure, are cases in point.
The CBN’s focus, in collaboration with the banking sector community and other interest groups on the rehabilitation of the National Arts Theatre, Iganmu, now renamed Lagos Creative and Entertainment Centre to create an environment for film making and the entertainment industry, is commendable.
Having garnered so much proven experience in helping to transform the economy, in furtherance of its role as a development finance institution, its foray, therefore, into the digital space cannot be termed hasty. It is just engaging, or in a sense, playing in its assigned space.
The question then is, how much attention the bank has given to this very essential digital segment, especially in the promotion of the eNaira to meet the goal of its creation! Not much, some might say. Given that the launch aroused so much interest, and that in itself by design and not by accident, more attention ought to have been directed at driving the product and its application more than five months, or more down the line.
Although Emefiele affirmed that in less than four weeks after its unveiling, the eNaira app witnessed almost 600,000 downloads (an appreciable feat, no doubt), six months away since then, the success story ought to have been more transparent and more traction gained given the initial hype and interest recorded at its launch.
“In less than four weeks since its launch,” Emefiele said, “almost 600,000 downloads of the e-Naira applications have taken place. Efforts are ongoing to encourage faster adoption of the e-Naira by Nigerians who do not have smartphones.”
To accomplish this, he stated, “the support of the financial industry will be critical in the ongoing deployment of the e-Naira,” stressing the need for continued partnership between the CBN and stakeholders in the financial sector.
Since then, the eNaira, which is Africa’s first digital currency, has been ranked number one in the global retail CBDC space, while the app downloads have increased to 756,000 from 700,000 as at last December.
The data, which emanated from PwC ranking in its 2022 CBDC Global Index and Stablecoin Overview, also indicated that over 35,000 transactions have been conducted on the platform. The PwC report also gave Nigeria’s eNaira a retail index value of 95, while the country was ranked number one in Africa. The research also examined the current level of CBDC project development, taking into consideration central bank views and public interest, a statement on PWC’s website stated.