Big things expected from eNaira in 2022
Adoption and usage of Nigeria’s Central Bank Digital Currency (CBDC), the e-Naira is expected to pick up this year as Fintechs offer support platforms and modalities, say tech experts, along with the warning also warning that the app for the digital unit of exchange needs to be upgraded.
Nigeria launched a CBDC in 2021, paving the way for others to follow, such as Ghana which forged ahead with its own eCedi digital currency.
In the first three weeks of launch, the e-Naira attracted approximately 500 000 users, according to Bloomberg.
Dimieari Von Kemedi, CEO of Angala Fintech, a financial services provider for small businesses in Nigeria, told ITWeb Africa that “uptake of the e-Naira will definitely pick up as the Central Bank of Nigeria continues public enlightenment and Fintechs play their role” in support of the digital currency.
Kemedi believes several other African countries, including Ghana, Kenya and Morocco, taking a cue from Nigeria through introduction of their own respective CBDCs.
The e-Naira is the Nigerian central bank’s response to increased use of cryptocurrencies in the West African country after banks were banned from processing crypto transactions.
According to Bloomberg about 60,215 Bitcoins have been traded in Nigeria since 2017 at a total value of nearly US$4-billion.
“A large amount of young Nigerians are unwilling to embrace the e-Naira due to lack of confidence in the ability of officials to secure transactions and prevent additional exposure” to online risks such as fraud, said Murega Mungai, the trading desk manager at AZA Finance, a frontier markets Fintech provider of treasury and FX services.
Mungai added, “For the CBN to realise the potential benefits, a lot of work needs to be done including remove bugs from the app and making it user friendly and efficient. Citizens - especially the youth - must be warmed to the benefits of the e-Naira and the pool of users’ needs to be broadened to include the unbanked and under-banked.”
And to be deemed useful, the e-Naira “must make business transactions easier, reduce the cost of financial transactions, and improve payment efficiency” in the Nigerian economy.
Nigeria has battled for foreign currency in the past two years while its fiat Naira currency has also been volatile. Although its economy recovered last year from its recession in 2020, Nigeria has struggled to return to pre-pandemic levels, in part because of inflation and rising unemployment.