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Why e-naira ‘ll not deepen financial inclusion – experts

E-naira, Nigeria’s Central Bank Digital Currency (CBDC) may not deepen financial inclusion as hoped despite offering the advantage of cheaper and more efficient financial transactions, experts in the financial sector have said.

According to the experts, the e-naira, which the Central Bank of Nigeria (CBN) is set to launch in October, is primarily transactional and does not appreciate or attract interest unlike crypto currencies like bitcoin, adding that the average Nigerian may not be interested in it.

They spoke at third quarter industry forum of the Committee of e-business Industry Heads (CeBIH) with the theme, “digital currency and the prospects of central bank digital currency in Nigeria”, held in Abuja on Tuesday.

Adeyemi Atanda, chairman, CeBIH explained that there must be an attraction for people to keep money in naira, but the e-naira has no attraction.

He, however, said that can be compensated with the fact that transactions done using e-naira come at near zero cost, which can help the end user save some money.


“When you hear e-naira, think transactional not investments. That is where a lot of people are mixing it up, you can’t compare it with crypto. Crypto is not primarily transactional, it is investments primarily. e-naira is primarily transactional,” he said.

Read Also: CBN’s e-naira raises speculations about sustainability

The chairman stressed that the e-naira, however, has more benefits than negatives. He argued that the platform can bring a lot of cash circulating outside the banking sector, which is about 85 percent, into the financial sector.

On the down side, Atanda said there are fears that banks will lose some of the liabilities (deposits). According to him, “the liabilities that we sit on today will be moved from naira where we can use it easily to digital currency, so we lose liability, but, again, it is a function of how creative we get as bankers.”

Rakitya Muhammed, director, information and technology, CBN, said the introduction of the e-naira can catalyze Nigeria’s digital economy, boost cross border trade and enable better macroeconomic policy formulation.

“If people adopt more of the usage of e-naira, then we will be able to have more data to formulate better macroeconomic policies”, she said.

“And when countries come on board and create their own digital currencies, then we will be able to have faster exchange of currencies and therefore we might be able to boost cross border trade at a much lower cost.

“Of-course payment efficiency, even though we know that Nigeria has one of the best payment systems in the world, we will still be able to improve on that,” she added.

Muhammed stressed that the e-naira will be a catalyst for the digital economy because the people who are outside the formal banking sector will be integrated.

Speaking on the e-naira design, Muhammed disclosed that the design would soon be revealed as the apex bank has concluded its development.

The e-naira, she noted, will be a legal tender like the fiat naira, it will not replace but complementary the naira and anonymity of transactions is guaranteed.

She further informed that e-naira will be non-interest for now and that could change later.

Chimezie Chuta, coordinator, block chain Nigeria User Group also stressed that the e-Naira will not solve the problem of financial inclusion in the country.

“I personally don’t think it will drive financial inclusion, it won’t drive that. You need to have money, a source of income to have a bank account. An average Nigerian will not buy into e-naira because of banking services”, he said.

According to him, CBN introduced the digital currency to address the encroachment of private e-currencies, but said the solution is weak as the e-naira does not address the key drivers of private e-currencies.

Chuta however said the e-naira will save the huge cost on printing, management and distribution of the naira.

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