E-Naira: Simplifying Financial Inclusion for the Downtrodden By Abdulrahman Abdulraheem

E-Naira: Simplifying Financial Inclusion for the Downtrodden By Abdulrahman Abdulraheem

When President Muhammadu Buhari came to power in 2015, he made it clear from day one that fixing the economy was one of the three key responsibilities he would priortise. He meant fixing the economy and expanding it to accommodate more local and foreign investments to create jobs and reduce poverty.

While building and fixing infrastructure like rail lines, roads, bridges, plants, factories, airports, refineries etc and hoping that they will solve the problem of poverty in the long run, the President and his team thought about how to deal with poverty situations that could not wait for that long run.

Poverty is in different grades and classes. There are millions of Nigerians whose poverty is at an extreme level and who can barely feed at all and this kind of situation can’t wait for the long term investments in infrastructure and macro-economic policies to begin to yeild fruits.

The government therefore came up with the Social Intervention Programmes (SIPs) like Conditional Cash Transfer (CCT), Trader Money, Market Money, N-Power etc to cater for poor and jobless Nigerians and give them that sense of belonging, so they can know that the country has not completely abandoned them.

Despite government’s best efforts however, the World Poverty Clock turned in 2018 and Nigeria became the World’s Poverty Capital with over 100 million of it’s population said to be living below the poverty line.

The situation is now being brought under control by more comprehensive measures taken by the federal government.

The e-Naira Era

As part of measures to simplify financial inclusion for the disadvantaged Nigerians, President Buhari launched the e-Naira in October, 2021. Since its launch, the e-Naira has proven to be a multi-dimensional digital currency that operates as a better alternative to the physical currency.

According to the visioner, the CBN governor, Godwin Emefiele, the e-Naira was introduced to act as a store of value and a medium of exchange that is easier, faster, cheaper and less cumbersome to send and receive money.

The e-Naira has demonstrated incredible capacity to do all things and solve all problems at micro and macro levels. The e-Naira platform enhances payment of bills, airtime recharge, health insurance, tax collection, diaspora remittances etc.

The Ministry of Humanitarian Affairs, Disaster Management and Social Development has also been taking advantage of the e-Naira platform to simplify the process of reaching out to the poorest Nigerians with life-saving funds.

The Permanent Secretary in the Ministry, Dr Sani Gwarzo, in a recent chat with Economic Confidential revealed that his Ministry, in collaboration with the CBN, registered about 1.9 million beneficiaries of their social intervention schemes on the e-Naira platform.

He said long before the CBN recently started a robust campaign to promote the e-Naira, the Ministry had deemphasised doling out cash to the beneficiaries of their interventions and embraced internet banking.

He added that after the CBN introduced the e-Naira as a form of digital currency, it approached the Ministry with a proposal to take advantage of it to pay its beneficiaries, adding that so far, the e-Naira has been the biggest discovery of the Ministry since its establishment.

“When the CBN approached us on this issue of e-Naira, we listened to them and held a series of meetings with them. There were lots of back and forth and arguments and counter arguments but since we got started our experience so far has been huge. In fact, I have been asking myself why didn’t this idea of e-Naira come to Nigerians long before now?

“Within a period of one month, we were able to register about 1.9 million of our beneficiaries on the e-Naira platform and we will do more,” he said.

He continued: “Nigerians are only complaining about the cashless system because they have not fully embraced the e-Naira but the time will come that everyone will be on it and we will start asking ourselves why didn’t we do this decades earlier?”

According to him, the e-Naira has a lot of advantages for which Nigerians will be grateful to the CBN when they fully embrace the idea.

Listing some of the advantages, he said it is easier and cheaper to operate, no bank charges, bottlenecks and intermediaries and unlike commercial banks there is no chance of depositors losing their monies since the CBN cannot fold up. And with all the above advantages, the poorest Nigerians who mostly live in the hinterlands where the infrastructure necessary for physical and internet banking may not be present, are the biggest beneficiaries of the e-Naira revolution.

Corroborating the Permanent Secretary, the CBN governor told journalists after the Monetary Policy Committee (MPC) meeting last week that part of the fundamental reasons for the e-Naira innovation was the need to get more poor people into the financial system, in collaboration with the Ministry.

“We have seen good progress in the adoption of the e-Naira. We are happy that as we try to move more and more towards financial inclusion, and get people away from being excluded in the financial system, the e-Naira remains one of the very portable options for all to adopt.

“The e-Naira has emerged as the electronic payment channel of choice for financial inclusion and targeted social intervention programmes. The Ministry of Humanitarian Affairs, Disaster Management and Social Development therefore expressed keen interest in the e-Naira product and adopted it for payment,” Emefiele said.

Consequently, Emefiele said as at March 20, 2023, approximately four million wallets had been created for social intervention payment representing about 30 per cent of total wallets created so far.

He said: “These wallets were created in response to a request from the Ministry as part of plans for the next tranche of conditional cash transfer programme by the second quarter of 2023.”

There is no doubting the fact that as Nigerians get more and more used to the e-Naira and continue to explore it’s features, more discoveries will be made on its usefulness and viability. Meanwhile, beneficiaries of the Ministry’s activities are in for interesting times with the collaboration with the CBN and the progress of the e-Naira.

Abdulrahman Abdulraheem is Managing Editor, Economic Confidential. editor@economicconfidential.com