- Nigeria is amending its eNaira model to encourage increased use of the central bank digital currency, according to the Central Bank of Nigeria (CBN).
- Despite a substantial increase in eNaira wallets, adoption remains limited in a country of 224 million, prompting efforts to enhance service offerings and improve user experience.
In a bid to encourage greater adoption of the central bank digital currency (CBDC), Nigeria is modifying its eNaira model, according to a statement by the Acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi.
Breathing Life into the eNaira
Introduced in October 2021, the eNaira saw a twelve-fold increase in wallet numbers, jumping to 13 million between October 2022 and March 2023. However, for a nation nearing a population of 224 million, these figures represent only a fraction of potential users. To address this, the CBN is focusing on enhancing its offerings and creating a more user-friendly experience.
Earlier in July, reports surfaced that the CBN upgraded the eNaira application to facilitate contactless payments, as per local news outlet The Sun. However, the bank remained silent on the specific alterations planned for the eNaira model and had not responded to requests for further information at the time of reporting.
The usage of eNaira, as it stands, presents challenges for many citizens. By March, the recorded value of eNaira transactions for the year amounted to 22 billion naira, equivalent to approximately $48 million at that time. In comparison, Nigeria boasts a $220 billion informal economy that primarily relies on cash transactions.
This robust cash-based economy, combined with an insufficient number of merchants and inadequate infrastructure for eNaira deployment, paints a clear picture of the barriers to widespread adoption.
By reengineering the eNaira model, the Central Bank of Nigeria is proactively responding to these challenges. The bank’s actions signify a strategic shift, underlining their commitment to nurturing a digital economy. However, successfully instigating change will necessitate not only technical advancements but also addressing the socio-economic factors hindering CBDC adoption.