President Muhammadu Buhari Monday officially launched Nigeria’s Digital Currency, the eNaira, expected to boost the nation’s Gross Domestic Product GDP, by $29b in the next ten years.
With the launch of the eNaira, Nigeria officially blazes the trail as the first country in Africa, and one of the first in the world to introduce a Digital Currency to her citizens.
Alongside digital innovations, the Central Bank Digital Currency, CBDC is expected to also foster economic growth through better economic activities.
According to the President “ some estimates indicate that the adoption of CBDC and its underlying technology, called blockchain, can increase Nigeria’s GDP by US$29 billion over the next 10 years.
“ CBDCs can also help increase remittances, foster cross border trade, improve financial inclusion, make Monetary Policy more effective, and enable the government to send direct payments to citizens eligible for specific welfare of Nigerians
The Central Bank Governor, Godwin Emefiele, who noted that Nigeria has one of the most advanced payment systems in the world and certainly the best in Africa, said the apex bank has created a financial window that will support 100 firms in the next 100 days
“Today, in addition to all policies and actions of the CBN to support the economy especially through the trying times of COVID-19, the apex bank is announcing a new financial instrument titled “The 100 for 100 PPP – Policy on Production and Productivity”, which will be anchored in our Development Finance Department under my direct supervision.
Under the policy, the CBN will advertise, screen, scrutinize, and financially support 100 targeted private sector companies in 100 days, beginning from 01 November 2021, and rolling over every 100 days with new set of 100 companies, whose names will be published in National Dailies for Nigerians to verify and confirm.
Read also: Buhari to unveil eNaira on Monday says CBN
The CBN Governor disclosed that the financial instrument will be available to their customers to boost production and productivity and to immediately transform and jumpstart the productive base of the economy.
“After these 100 projects by companies in the first hundred days from November 1, we will take the next 100 companies/projects for another 100 days beginning February 1, 2022, and then another 100 companies for another 100 days beginning from May 1, 2022.
“The purpose of this instrument is to take further steps to reverse our over-reliance on imports. We believe that if we target and support the right companies and projects, we will see a significant, measurable, and verifiable increase in local production and productivity, reduction in certain imports, increase in non-oil exports, and improvements in the FX-generating capacity of the economy. This, in my view, is the best and most sustainable way to address Naira’s value – whether in hard currency or digital eNaira – through production, production, and more production.
Emefiele debunked fears over the falling state of the Naira, adding that as custodians of the national reserves, “ there is no cause for alarm. Our FX reserves are strong and indeed getting stronger by the day, crossing the 40 billion USD mark, and is one of the highest in Africa – and growing. But we cannot fritter our reserves away on cheap imports and currency speculators”
“We must return to an employment-led growth anchored on productivity and rewarding producers of local goods, services, innovation, and new technologies. If you consume cheap imports and export our jobs, we will make you pay dearly; but if you produce locally – with little or no foreign inputs beyond machinery, we will support you, and the markets will reward you abundantly.”
He disclosed that the CBN had in 2017 embarked on research to establish a compelling case for the adoption of a digital currency in Nigeria to enable a more prosperous and inclusive economy for all Nigerians.
“Following the completion of the preliminary work, the researchers and experts at the CBN were able to clearly establish that a digital currency will drive a more cashless, inclusive, and digital economy and will complement the gains of previous policy measures and our fast-growing payments platforms. As such, the CBN decided to implement its own CBDC and to name the digital currency, the eNaira.
The CBN believes the eNaira will make a significant positive difference to Nigeria and Nigerians, including, Supporting a resilient payment system ecosystem! Encouraging rapid financial inclusion! Reducing the cost of processing cash! Enabling direct and transparent welfare intervention to citizens! Increasing revenue and tax collection! Facilitating diaspora remittances, as well as reducing the cost of financial transactions, and improving the efficiency of payments
The eNaira is Nigeria’s CBDC and it is the digital equivalent of the physical Naira. As the tagline simply encapsulates, the eNaira is the same Naira with far more possibilities. The eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN. The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 eNaira.
To de-risk the process, the CBN has given careful consideration to the entire payments and financial architecture and has designed the eNaira to complement and strengthen these ecosystems, and has implemented security safeguards and policies to maintain the integrity of the financial system. Specifically, there will be strict adherence to the anti-money laundering and combating the financing of terrorism (AML/CFT) standards in order to preserve the integrity and stability of Nigeria’s payment system.
Since the eNaira platform went live, it has enjoyed over 2.5 million daily visits to the website with 33 banks fully integrated and live on the platform.
Emefiele disclosed that N500 million has been successfully minted by the Bank, N200 million has been issued to financial institutions, Over 2,000 customers have been onboarded, Over 120 merchants have successfully registered on the eNaira platform.
“ Today, customers who download the eNaira Speed Wallet App will be able to perform the following, Onboard and create their wallet! Fund their eNaira wallet from their bank account! Transfer eNaira from their wallet to another wallet! Make payment for purchases at registered merchant locations
“As with most digital revolutions, the eNaira is a journey that starts today. It is not a one-off event. It is a journey of possibilities. We will continue to refine, fine-tune and upgrade it.
Nigerians are expected to see additional functionalities in the coming months, inaccessibility and onboarding of customers without BVN, and the use of the eNaria on the phone without the internet will further drive financial inclusion, making Nigeria one of the first countries in the world to deploy the CBDC via USSD on phones without relying on internet connectivity.
Other features expected include the Onboarding of revenue collection agencies to increase and simplify collections! Creation of sector-specific tokens to support the Federal Government’s social programmes and distribution of targeted welfare schemes in a bid to lift millions out of poverty by 2025