eNaira: Much Ado About High Expectations, Hasty Conclusions
By Abdulrahman Abdulraheem
The rate of adoption, acceptance and spread of eNaira has come under attack in recent times over what looks like the failure of critics to understand monetary system in Nigeria, Nigerians’ sentimental attachment to physical cash and other social problems like illiteracy.
In October 2021, Nigeria recorded a milestone by being the first African country to launch an official digital currency named eNaira. The then Governor of the apex bank, Godwin Emefiele, was clear in his reason for introducing the digital currency. He said eNaira would serve exactly the same purpose the physical cash was serving but with advantages like saving the business man the risks of holding plenty cash which include armed robbery, theft, fire incidents etc.
While the existent conventional banking was supposed to take care of the above risks, the unreliable network and the exorbitant charges the customers had to pay still created gaps for the eNaira to come and fill. While the eNaira platform has no such thing as network failure, transfer from one eNaira wallet to another attracts no charge at all, thus making transactions free for Nigerians. This is at micro level.
The eNaira came with massive promises and prospects on the macro level too. That was why it was launched with pomp and pageantry by ex-President Muhammadu Buhari. It has capacity to boost and ease payment of bills, health insurance, diaspora remittances and financial inclusion for the downtrodden.
By the time eNaira becomes the prime choice for transactions in Nigeria, it will boost and hasten the country’s transition into cashless economy which helps in curbing inflation, tracking money laundering and saving the country billions of naira it spends in printing physical cash.
The beauty of having a platform with the above ingenuity may have however intoxicated some stakeholders both within and outside the country into expecting that after six months, all Nigerians are supposed to be on the platform.
Such high expectations are however inconsistent with the reality of the Nigerian situation. Nigeria is a country of nearly a million square kilometres which is one of the most difficult countries in the world to govern.
A typical Nigerian farmer, herder, hunter, trader etc would prefer to sell and buy in cash and even the wealthy ones among them would prefer to keep their millions of naira in the drawers and wardrobes, and be seeing it every morning and night, rather than have the money in one so-called bank account or e-wallet that they can neither see nor touch. For them, there is absolutely no feeling of being wealthy if the money cannot be seen in physical cash.
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Nigeria is a country of about 206 million people out of which 76 million, representing 37 percent, are said to be illiterate and 160 million, representing 78 percent, have no smart phones. Out of the population also, about 73 million, representing 35 percent, are said not to have bank accounts.
Nigeria has 774 Local Government Areas, out of which more than 300 are said not to have bank branches or cash centres at all.
Even though the eNaira platform is accessible and usable for people with no bank accounts and smart phones because the CBN came up with the idea of USSD code through which people with any phone at all can join, the message will still take years to sink properly. Even though the eNaira platform is built in such a simple manner that people with minimal education can make use of it, they will still need guidance by CBN officials who have to take their time to go round such a massive country like ours to meet different categories of Nigerians in clusters and groups.
Talking about eNaira advocacy and publicity, a lot of investments and work have gone into this. The CBN has a massive eNaira advocacy team that moves round the country to meet market people, youth groups, women groups, drivers, tricycle operators etc and also students who they meet in university campuses.
The Bank has also engaged several individuals and organisations as partner-agents across the country for the purpose of recruiting, training other agents for the purpose of ultimately spreading the gospel of eNaira.
The progress the eNaira acceptance rate has recorded is largely due to the painstaking work the apex bank has done as well as the viability and versatility of the eNaira platform itself.
On the other hand, the ‘slow’ pace of the progress being recorded – according to the harsh and hasty judgement of some critics – is not in reality due to any fundamental defect in the entire Central Bank Digital Currency (CBDC) idea. There is also nothing wrong in the CBN’s implementation strategy for its digital currency. The only factor that can possibly be responsible for that is the huge size of Nigeria and the fact that a lot of more work needs to be done on the side of enlightenment.
Criticisms without contexts, without indepth understanding of situations and circumstances, is the bane of intellectualism in this part of the world. The eNaira project cannot be dubbed a failure just because it has failed to arrive at its destination as quickly as you erroneously envisioned. It is work in progress. It will get there.
Critics and analysts seem to be seeing the implementation of eNaira as a 100 metre dash that must start and end with good results in split seconds. In reality, the pursuit of success for the eNaira is a marathon that will take time, efforts and more investments in publicity and advocacy. The CBN knows this.
Abdulrahman Abdulraheem is the Managing Editor of PRNIGERIA and ECONOMIC CONFIDENTIAL.
