The Central Bank of Nigeria (CBN) digital currency, eNaira, has continued to attract the interest of Nigeria’s banking public at home and across the world, with its total downloads hitting 694,000 exactly 95 days after it was unveiled.

A breakdown of the figures obtained by This Day showed that as of January 28th, total downloads via iPhone Operating System (iOS) stood at 136,000, while that of Android was 558,000.

In terms of consumer wallets, the data showed that at 33%, Guaranty Trust Bank was ahead of others, while Ecobank was presently leading in terms of merchant wallet downloads at 22%.

“Downloads have continued to increase to almost 700,000. ENaira wallets were downloaded from North America to Australia and all over Africa,” the analysis stated.

Furthermore, it showed that the app was also downloaded in South America, Europe, Asia, and in almost all the countries in Africa.

President Muhammadu Buhari launched the digital currency on October 25th 2021, saying that with the eNaira, the country’s Gross Domestic Product (GDP) was projected to rise by $29bn in the next 10 years. He had stressed that Nigeria was the first country in Africa and one of the first in the world to introduce digital currency.

The president said that the adoption of Central Bank Digital Currency (CBDC) and its underlying technology, called blockchain “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 programmes.”

Bit Coin Logo – Wikimedia Commons

CBN Governor, Mr. Godwin Emefiele, also said the eNaira would support a resilient payment ecosystem, encourage rapid financial inclusion, reduce the cost of processing cash, enable direct and transparent welfare intervention to citizens, and increase revenue and tax collection.  He added, “Therefore, 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 one naira to one eNaira.”

The International Monetary Fund (IMF) noted recently that the eNaira had been “drawing substantial interest from the outside world” since it was unveiled.  However, it pointed out that, like digital currencies elsewhere, eNaira carried risks for monetary policy implementation, cyber security, operational resilience, and financial integrity and stability. It noted that although the digital currency was expected to increase financial inclusion and facilitate remittances, CBN should be prepared to manage the potential risk associated with managing a digital currency.  (This Day, Abuja 31/1)

In February 2021 the NBC banned crypto-currencies making it clear that they are not the same as a digital currency and can be, and frequently are, used for money laundering, terrorism and other illegal activities.   Osita Nwanisobi the CBN’s Acting Director of Corporate Communications explained there is a critical difference between a Central Bank issued Digital Currency and cryptocurrencies. As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities. (Premium Times, Abuja 7/2/2021)

Central Bank of Nigeria – Wikimedia Commons

A Central Bank Digital Currency tracker from US think-tank, Atlantic Council shows that Nigeria is among nine countries, and the first outside the Caribbean, to have launched a central bank–issued digital currency. Over 80% of the world’s central banks are looking into some form of CBDC; 17 are now in the pilot stage, including South Africa.  Seven other African countries – eSwatini, Ghana, Kenya, Madagascar, Morocco, Rwanda and Tunisia – are doing research. 

Ghana is looking at allowing a digital currency pilot following the launch of a fintech regulatory and innovation live testing pilot. The pilot will also give preference to projects using blockchain technology from early in 2022. Ghana has christened the digital currency project, E-Cedi.

After a four-year ban, the Moroccan Central Bank has formed an exploratory committee to determine the positive and drawbacks of a regulated digital currency ecosystem to its economy.

Tunisia is exploring ways to advance its e-dinar, a blockchain-based digital version of the Tunisian dinar that has been on issuance through the government’s post office over the last five years.

The Central Bank of Madagascar has embarked on a two-phased project to study the issuance of a digital currency called e-Ariary that will entail analysis, design, and experimentation before implementation.

The “mushrooming of private cryptocurrencies” has also sparked interest in a regulated digital ecosystem in Kenya, with the country’s central bank saying it has initiated discussions with global players about central bank digital currencies.

The high cost of sending cash home from overseas—an important catalyst for development and social upliftment—has also emerged as a top motivator for the growing popularity and adoption of virtual currencies in Africa.

Blockchain data platform, Chainalysis, in its 2020 Geography of Cryptocurrency Report shows that Africa leads other regions in the world on retail-sized transfer of below $10,000. The need for remittances is a big part of this. In June 2020, Africa’s cryptocurrency volume retail share accounted for 29%, compared to Latin America and other regions in the developing world that scored below 20%.  

“Roughly $3.7bn worth of cryptocurrency was transferred to and from overseas addresses to ones based in Africa over the time period studied, with $562m of that coming in retail-sized payments under $10,000,” according to the report.  The U.K.-based crypto company Luno reports that 4.7 million of its 7 million global customers are in Africa, an amount that has doubled in just one year, from 2.3m in 2020.  (Quartz Africa 5/8/2021)

For further information about the Africa Research Bulletin:

Economic, Financial and Technical Series:  https://onlinelibrary.wiley.com/journal/14676346

Political, Social and Cultural Series: https://onlinelibrary.wiley.com/journal/1467825x