E-Naira: Remarkable Milestones in Adoption, Spread & Acceptance

E-Naira: Remarkable Milestones in Adoption, Spread & Acceptance

By Abdulrahman Abdulraheem

The Central Bank Digital Currency (CBDC), popularly called e-Naira, is travelling far and wide, growing and spreading to every nook and cranny of the nation faster than envisaged by pundits.

When the digital currency was launched in October 2021, it was greeted with a lot of confusion and scepticism. Confusion because Nigerians were wondering what the e-Naira was all about when internet banking had already been part of our monetary system. Many Nigerians didn’t know that e-Naira, which is also a digital currency, is different from internet banking. People were also confused about if the e-Naira was not the same as a digital currency like crypto, which the CBN had repeatedly warned Nigerians to stay away from.

This confusion led to skepticism and Nigerians just grimaced at the announcement of the arrival of an innovation on the country’s national currency. Economists, scholars and other knowledgeable people therefore expressed doubt regarding the quick acceptance of the e-Naira by Nigerians. Some experts just concluded that this was another failed government project in the making. But the CBN had other ideas.

The first thing the CBN did was to educate Nigerians on the difference between cryptocurrency and e-Naira. They also educated people on the difference between internet banking and a digital currency like e-Naira and how the latter is easier and cheaper to operate than the former.

Through its various channels of communication, the apex bank informed Nigerians that the e-Naira revolution is different and better than internet banking as it is cheaper to send and receive money and that it is also immune from the network problems associated with internet banking.

On the issue of similarities with cryptocurrency, the CBN has repeatedly said that crypto is unregulated and risky, and advised Nigerians not to go near it. But the e-Naira is a Nigerian project which has official backing and carries absolutely no risk. In fact, monies kept in the e-Naira wallets are safer than the ones kept in conventional accounts with commercial banks. This is because the banking system or a particular bank can collapse and depositors may lose their monies in commercial banks but the CBN cannot crash, therefore the e-Naira is completely safe.

The apex bank also used the whole of 2022 and the first quarter of 2023 to carry out robust marketing of e-Naira to make sure as many Nigerians as possible get on board. The CBN e-Naira advocacy teams moved round all the nook and cranny of the country and met Nigerians in different fields of endeavour to demonstrate how the e-Naira works and why they need to get on board.

The result of the various sensitisation workshops held for artisans, drivers, market women, teachers etc was the impressive progress report reeled out by CBN governor, Godwin Emefiele, while briefing journalists after the last Monetary Policy Committee (MPC) meeting held last week.

In what analysts see as a remarkable improvement and wider adoption of the e-Naira, the value of transactions according to Emefiele hit N22 billion indicating a 68 per cent increase since the beginning of this year.

“With over N10 billion of it minted, and about N3.429 billion of the naira currently in circulation, the number of wallets created so far also rose to 13 million.

“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,” Emefiele said.

Giving more details about the success story of e-Naira, Emefiele said that the 13 million wallets created in the last 18 months were categorised based on their level of usage with 12.6 million at Tier Zero and 11,354 at Tier 1. A total of 367, 000 were at Tier 2, while the remaining 9,649 were at Tier 3 usage level.

While assuring that everything would be done to make sure that the e-Naira continues to improve, the CBN boss noted that the adoption rate of the digital currency had continued to increase.

While marking the one year anniversary of the introduction of the CBDC in October last year, Emefiele had said that more than one million e-Naira App downloads had been recorded, which showed evidence of instant success. It is that instant success that has been massively improved upon to get us where we are today.

In recent reports, the Economic Confidential pointed out that the CBN is doing an impressive job at selling the idea of e-Naira and making an otherwise sceptical population to adopt such a strange but very beneficial concept. The apex bank deserves more accolades considering the fact most of the individuals and groups they convince these days to adopt the currency are at the lower rung of the ladder in terms of education and financial resources and they are supposed to be the difficult groups of people to convince.

The success story of the e-Naira so far is, therefore, due to the ingenuity and versatility of the concept. The e-Naira is an excellent idea which is easy to sell but the job is made easier by the fact that the people in charge of the advocacy know exactly what they are doing and they know how to strike at the right time and in the right places.

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