The path to a cashless economy in Nigeria continues with the introduction of eNaira, the country’s official digital currency. Launched in October 2021, eNaira aims to serve the same purpose as physical cash while offering advantages such as reducing the risks associated with handling large amounts of cash. However, the rate of adoption, acceptance, and spread of eNaira has faced criticism, largely due to a lack of understanding of Nigeria’s monetary system, sentimental attachment to physical cash, and social issues like illiteracy.
The conventional banking system was supposed to mitigate the risks associated with physical cash, but unreliable networks and high transaction charges created gaps that eNaira aims to fill. With its robust platform, eNaira eliminates network failures, and transactions between eNaira wallets are free. These benefits extend to both micro and macro levels, promising to streamline bill payments, enhance health insurance coverage, facilitate diaspora remittances, and promote financial inclusion among marginalized populations.
Transitioning to a cashless economy with eNaira has the potential to curb inflation, track money laundering, and save significant costs incurred in printing physical cash. However, some stakeholders have been overly optimistic about the speed of adoption, considering the challenges prevalent in Nigeria. The country’s vast size, diverse population, and low literacy rates pose obstacles to widespread adoption of eNaira. Many Nigerians, including farmers, herders, traders, and even affluent individuals, prefer cash transactions and find a sense of wealth in physically holding their money.
It is essential to consider the Nigerian context, where approximately 37% of the population is illiterate, and 78% do not own smartphones. Furthermore, about 35% of Nigerians lack bank accounts, and many local government areas have limited access to banking services. Although the Central Bank of Nigeria (CBN) has made efforts to promote eNaira through advocacy and publicity campaigns, the message will take time to resonate. CBN officials must travel across the country, engaging with different groups to provide guidance and education on eNaira usage.
The acceptance rate of eNaira owes much to the diligent work of the CBN and the versatility of its digital platform. However, critics must recognize that the perceived slow progress does not signify a fundamental flaw in the concept of a Central Bank Digital Currency (CBDC) or the CBN’s implementation strategy. The primary hindrance is the sheer size of Nigeria and the need for extensive awareness campaigns.
Misguided expectations view the implementation of eNaira as a short sprint, demanding immediate results. In reality, making eNaira a success requires a marathon-like approach with a focus on time, effort, and continued investments in advocacy and publicity. Despite the initial challenges, the CBN remains committed to achieving the goals of the eNaira project. Consequently, it is premature to label eNaira a failure solely based on the pace of its adoption. With ongoing efforts, eNaira will reach its desired destination.
Abdulrahman Abdulraheem, the Managing Editor of PRNIGERIA and ECONOMIC CONFIDENTIAL, emphasizes the importance of considering various perspectives when assessing eNaira’s progress. Criticisms lacking context or an in-depth understanding of Nigeria’s unique circumstances hinder intellectual discourse. By embracing a balanced view and acknowledging the ongoing nature of the eNaira project, it becomes evident that success will require time, patience, and further investments in awareness-building endeavors.
