eNaira paves the way to cashless economy in Nigeria: Central Bank chief

Nigeria must become a predominantly cashless society, and can act as a knowledge hub for the world on central bank digital currencies, says Godwin Emefiele, governor of the Central Bank of Nigeria (CBN).

Emefiele made the remarks at a workshop on October 25 entitled “Leveraging Innovation for Inclusive Growth and Development: The eNaira Advantage”, celebrating a year since the launch of the African country’s central bank digital currency (CBDC), the eNaira.

“We have provided all the necessary infrastructure that should enable us to make a cashless nationwide journey,” he said.

Emfiele also said that with the experience that it is gaining, Nigeria could become a knowledge source for the world on CBDCs as central banks develop their plans to launch digital currencies.

Africa’s first central bank digital currency

The eNaira was launched on 25 October 2021, making it one of just four CBDCs in the world and the first in Africa.

CBDCs differ from cryptocurrencies, such as bitcoin, as they are issued and backed by states. They also differ from mobile money apps, as they operate on a peer-to-peer basis – a customer can make a payment to a merchant using the eNaira directly without the need to go through an intermediary.

In addition, the value of the eNaira is exactly the same as that of the cash naira – it does not rise or fall independently in relation to other currencies.

Boosting inclusion is one of the principal aims of the digital currency. It is aimed at integrating millions of unbanked Nigerians – some 55% of the adult population – into the banking sector by providing a means to make payments directly from an e-wallet on their phones, without needing to go through intermediaries.

Users can also receive direct payments for welfare programmes.

At the time of the launch, Emefiele forecast that the digital currency could boost GDP by as much as $29bn over 10 years. Amongst other advantages is expected to boost commerce by making retail transactions more seamless in places such as petrol stations and supermarkets.

It was also designed to facilitate cross-border trade and in-bound remittances from Nigerians in the diaspora by providing a cheaper and easier way of making payments.

Source: African Business

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