eNaira: Why Nigerians Aren’t Embracing Africa’s First Digital Currency
In October 2021, the Nigerian government launched the eNaira, which is otherwise termed as Africa’s first digital currency.
According to the Nigerian government under former president, Muhammadu Buhari, in 2021, launching eNaira was going to be pivotal and key to enabling more remittances and growing Nigeria’s economy.
The eNaira is a Central bank digital currency issued and regulated by the Central Bank of Nigeria. Hence it was the first of its type in Africa.
Denominated in naira, the eNaira serves as both a medium of exchange and a store of value and claims to offer better payment prospects in retail transactions when compared to cash.
Describing the eNaira launch, the International Monetary Fund (IMF), had noted that eNaira uses the same technology as Bitcoin and Ethereum and is stored in digital wallets which can be used for payment transactions.
The move to launch eNaira 2021 came few months after the country banned cryptocurrency trading by commercial banks in the country.
Nigeria had banned cryptocurrency trading in February 2021, which made the eNaira to ensure that digital currencies are still used for trading in the country.
There have, however, been concerns on the digital currency since its launch.
According to the United Nations outline, digital payments can help countries: to access essential services, grow their economies, be more competitive in the global economy, reduce inequalities and deliver essential services as well as foster social inclusion.
Enabling a digital payment currency or payment systems also helps to deepen the digital public infrastructure (DPI) in any country.
Despite Digital Naira, Nigerians yet to explore usage
As of March this year, the currency in circulation stood at N3.87 trillion, out of which CBN Digital currency (eNaira) stood at N13.8billion representing a merely 0.36% of the total currency in circulation.
SaharaReporters gathered that one of the challenges listed against the use of eNaira is that cash is the prevailing method of transaction in Nigeria.
Hence there is fluctuation in the penetration of digital currencies meant to ease the use of cash as a mode transaction.
In May 2023, the International Monetary Fund noted that 98.5% of the eNaira wallets were inactive.
Checks by SaharaReporters also showed that as of September 2024, the currency in circulation stood at N4.3 trillion out of which that which was outside the bank was estimated at N4 trillion representing 93% of the currency in circulation, which shows that Nigerians still prioritise cash as against Digital currencies.
Non-functional eNaira shortcode, Never-Arriving OTP
The activeness of the platforms created by the CBN for eNaira wallets use is also susceptible, for instance, a shortcode *997# was said to have been introduced for people without smartphones to create an eNaira wallet. However, checks by SaharaReporters as of Saturday showed that the code was inactive.
If shortcodes do not work, it would mean those with access to smartphones may be the ones that may have the chance of using eNaira.
A GSMA report noted that 68% of Nigerians in rural areas lack access to smartphones as of 2022. Only 58% of persons in Urban areas own smartphones, technically only 45% of Nigerians have access to smartphones.
SaharaReporters sampled different users to create wallets through the eNaira website, however accounts opening was unsuccessful, right from the step where a prospective user is asked to input phone number to get OTP.
The OTP actually never arrived.
Ten different persons were sampled by SaharaReporters to open accounts on the platform, https://mywallet.enaira.gov.ng/register-consumer/
However, none of them received OTPs to proceed with registration, nor a call or message on WhatsApp, as was the painted picture on the government website.
SaharaReporters used the eNaira speed wallet app to register an account, since the website link was not opening, it came back as same; the OTP which would have confirmed the opening of a wallet on eNaira never arrived.
“I have tried to open an account on eNaira, however after opening the link I did not receive any OTP, even after multiple trials” a prospective user, Emmanuel Olayemi, lamented.
Another respondent, Olugbenga Ayobami also noted that he tried all options on the website to no effect.
“When the OTP was not sent, I tried the option of call and WhatsApp but nothing came through. This denied me anyway to open a wallet on eNaira or use the platform,” he stated.
Poor Awareness Maims Use of eNaira
SaharaReporters also sampled awareness of Nigerians on eNaira; only two of the 15 persons sampled have an idea of what eNaira, depicting a challenge of abysmally low awareness among Nigerians on eNaira.
One of the aims of eNaira is financial inclusion.
However, one of the major tools of financial inclusion especially for rural areas in Nigeria is point of sale machines.
According to the CBN, one of its aims is to enable eNaira cash-in and cash-out through diverse touchpoints at financial institutions, including mobile and internet banking, POS and ATM, USSD, web platforms, agent networks, and third-party channels.
However, POS operators who conversed with SaharaReporters also showed lack of knowledge of what eNaira is or how to use it for transactions.
There were over 1.1 million POS terminals in the country as of 2022, most of whom were in rural areas, based on data from Statista.
There is a need for more Regulatory Framework, Infrastructure to Support Digital Currency Penetration- ED, PSLI
Speaking to SaharaReporters, the executive director of the Paradigm Leadership Support Initiative, Olusegun Elemo, noted that digitisation is an issue in not just Nigeria but Africa as a continent.
“When you have a case where even the penetrations of automated teller machines are a problem, you can imagine what that of that of eNaira would be”.
He noted that the regulatory framework for digital currencies in the country remains poor
“There is another issue of regulatory framework guiding digital currencies, just recently the securities and exchange commission (SEC) approved use of digital currencies but a lot still needs to be done around regulatory framework”
He also opined that in Nigeria ideas are built behind human not the systems.
“When an idea is built around human, once the human leaves office, the idea becomes less functional” he noted.
Olusegun noted that the Nigerian economy is controlled by the informal sector and as such, the issue of awareness on use of eNaira is an issue.
“You understand that the Nigerian economy is penetrated by the informal sector, the awareness on use of eNaira is an issue, also the infrastructure support needed is another issue to consider” he told SaharaReporters.
He stated that the issue of use of eNaira will take gradual phases in terms of development.
According to the State of Inclusive Instant Payment Systems in Africa (SIIPS 2024) report by Africa Nenda and done in partnership with the African Union and the World Bank, though seven countries (Egypt, Ghana, Kenya, Morocco, Nigeria, South Africa, and Tanzania) have multiple live IPS of different types, only Nigeria has a sovereign currency IPS.
The report said, “As for sovereign currency IPS, Naira in Nigeria remains the only one of this type on the continent. No other central bank digital currency (CBDC) is live, though several teasibility pilots are underway. Most countries have focused instead on implementing existing national payment systems projects or upgrades, leaving CBDC projects to compete for resources, especially from a regulatory perspective (Stakeholder Interviews, 2024), Ghana seems to be furthest along with its CBDC pilot at the time of writing this report, yet there is no official update on the pilot outcomes or whether a CBDC launch is imminent.”
Speaking on the West African regional bloc efforts on the Instant payment system, the report added that “ECOWAS has mandated the West African Monetary Agency (WAMA) to establish a regional payment and settlement system (including an instant retail payment systemi, as part of realising the roadmap for the ECOWAS single currency programme.
“The aim is to harmonise and interconnect existing payment system initiatives in the region, including the regional system that is being rolled out in WAEMU (which is a regional sub-group of ECOWAS). To realize this project, WAMA nas received funding from the African Development Bank and is in the process of recruiting a consultant for technical assistance (AFDB, 2024)
“WAEMU is developing a system for instant, interoperable payments between banks and non-bank providers The system has been in the works for many years and is nearing official launch: The Central Bank of West African States (BCEAO) announced on their website that they started piloting the system in July 2024 (BCEAO, 2024b). Moreover, the BCEAO recently published new instructions that set out the conditions for banks and non-banka to provide their services in the WAEMU zone (BCEAO, 20248; Muko, 2024).
“This provides a regulatory base to enable participation of different actors in the system. In addition to instant cross-border payments, the IPS will enable domestic payments interoperability within the eight member countries.”
Digital payment systems in Africa generally have continued to grow, reaching 37% in transaction volume over the past five years, reflecting a major shift in the continent’s financial ecosystem.
This was according to the 2024 SIIPS Report, launched in Accra on November 20, 2024.
The report also revealed that there were 31 operational Instant Payment Systems (IPS) across 26 countries, with 27 more nations preparing to roll out similar systems.
Despite this progress, the report highlights persistent challenges in achieving financial inclusion, particularly for women and other vulnerable groups, who face barriers such as fraud concerns and limited recourse mechanisms.
Commenting on the report, the Chief Executive Officer of AfricaNenda Dr. Robert Ochola said that: “AfricaNenda and its partners are calling for a collective push to expand IPS and deliver solutions that cater to every citizen, particularly those in rural and underserved areas. The goal is to ensure universal financial inclusion by 2030.”
While IPS transaction values have risen by 39%, the report emphasizes the need for more robust systems to address security and network reliability.
Jean Pesme, Global Director of Finance at the World Bank, reiterated IPS’s transformative potential.
“Access to safe, low-cost, and efficient digital payments can transform lives, close the gender finance gap, and foster resilience. While progress is remarkable, more needs to be done through fintech promotion and private sector involvement,” he said.
Speaking on the sidelines on the launch, Deputy Chief Executive Officer of AfricaNenda Foundation, Sabine Mensah also impressed on regulators within the financial space to enhance data transparency.
The report calls for accelerated innovation in fintech licensing, universal IPS adoption, and cross-border payment systems.
The report says these measures aim to create a more inclusive and interconnected digital payment infrastructure, driving Africa closer to universal financial inclusion.
