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Tag: E-Naira

  • CBN wants Nigerians to embrace E-Naira

    CBN wants Nigerians to embrace E-Naira

    By Ogenyi Ogenyi, Uyo

    The Central Bank of Nigeria (CBN) has called on Nigerians to embrace the e-Naira because of it’s safety features, ease and low cost of operation.

    The apex bank has also said that the payment system would help it in making monetary policy decisions because of the verifiable and authentic data it would provide.

    Speaking on Thursday during an advocacy visit to the Vice Chancellor of the University of Uyo, Prof Nyaudoh Ndaeyo, Branch Controller of CBN in Uyo, Mercy Ogbomonpaul said the sensitisation programme was to educate the University community on the system adding that though the e-naira platform started in 2021, it has not received wide publicity and acceptance as it should.

    Ogbomonpaul who was represented by an Assistant Director, Mr Isang Enya, said Nigeria was the seventh nation to introduce e-currency adding that other countries have gone beyond the physical cash payment and are now using the e-payment system.

    “We are here to partner with you on the e-naira. Globally, the economy is now going e-payment and not cash payment as it is known in our environment. The Central Bank in its wisdom, in line with best practices adopted the e-naira platform.

    “The e-naira is expected to help us to be in par with what other countries are doing. The unfolding trend now is that we use e-payment rather than the physical cash. The e-naira is an initiative of the Central Bank that would work in par with the physical cash.

    “It is the semblance of the naira that we could use in transaction rather than the physical cash because the naira as we know is very difficult and is costly to replace.

    “The e-naira would help us to handle those deficiencies that are noticed and experienced in the use of cash. The e-naira would also help us in our policy making, in terms of monetary policy decisions because decisions are made based on information we have.

    “If we are all in the e-naira platform, the Central bank would be able to ascertain how much has been transacted in the e-naira platform and able to make policy decisions for our monetary policy in the country.” She stated.

    Explaining that the e-naira system was more viable, simple, and easy to use, Ogbomonpaul said it would ease the payment of revenue and was in line with what is tenable in other advanced nations.

    “The e-naira would make our payment system more viable and bring in more people into the system. It is simple, it is easy and will allow the government to get its revenues in terms of payment very easily.

    “Other countries have gone beyond the physical cash payment and are now using e-payment and that is why Central Bank has introduced the initiative to ensure that everybody is able to do a business transaction without necessarily looking for cash in view of the cost of managing cash.

    “The initiative allows for tiers of implementation. As little as N20,000 you can key into the tier one system of the enaira. It is not until you have so much money or you have what to do before you can key into the system.

    “The system allows for you to enter into the system even without an NIM, which we know is very key in every banking operation. With this initiative, we are going to see a lot of people key into the system.” The controller stated.

    Ndaeyo in response said the institution was happy to be a part of the initiative and would partner with CBN on the e-naira.

    The VC who also expressed the willingness of the University to partner with the CBN in the area of agriculture encouraged the apex bank to go beyond the shores of the University, into the communities to sensitisie people on the e-naira.

  • CBN Unveils E-Naira USSD Code

    The Central Bank of Nigeria (CBN) has unveiled the *997# USSD (Unstructured Supplementary Service Data) code in Kano State as part of efforts to reduce the use of cash in commercial activities in the country.

    The Deputy Governor, Operations Directorate of the CBN, Mr. Folashadun Adebisi Shonubi unveiled the USSD code in Kano, saying it was another milestone in delivering digital financial services to Nigerians and enabling their participation in the global digital economy.

    He explained that the eNaira presents an opportunity to offer Nigerians endless possibilities in using financial services, adding that it was captured by the slogan: “Same Naira, More Opportunities.”

    “Today marks a significant milestone towards achieving the objective of the second phase of the project which is to drive financial inclusion by onboarding unbanked and underserved users leveraging the offline channels.

    “Specifically, we are here to launch the eNaira USSD channel using *997# for onboarding and transactions.
    “The choice of the USSD as the premium offline channel for the eNaira is founded in an understanding of the peculiarities of our economy,” Shonubi explained.

    He urged Nigerians to embrace the central bank digital currency, describing it as safe, saying it would help in reducing the number of the country’s unbanked population.

    “Approximately, 45 per cent of adult Nigerians do not have a bank account while 35.9 per cent are excluded from formal financial services.
    “However, around 81 per cent of the adult population in Nigeria (86 million out of 106 million) own mobile phones (EFInA, 2021), in addition, there are about 150 million Mobile Subscribers in Nigeria (NCC, June 2022).

    “Therefore, the eNaira seeks to leverage the huge opportunity mobile telecommunications presents as a distribution channel for the offering of digital financial services to the underserved and unbanked population” he stated

    In her address, the Director, Information Technology Department of the CBN, Hajiya Rakiya Muhammad, said they chose Kano to unveil the eNaira code because of its economic significance in the country.

    Muhammad said: “We believe if Kano accepts the eNaira, everyone will accept it all over the country.”

  • E-Naira Will Increase Nigeria’s GDP By $29bn – Buhari

    E-Naira Will Increase Nigeria’s GDP By $29bn – Buhari

    President Muhammadu Buhari has said Nigeria’s new digital currency, eNaira, will increase the country’s Gross Domestic Product by $29 billion over the next 10 years.

    The President said this on Monday at the unveiling of eNaira at the State House.

    According to the President, the launch of eNaira makes Nigeria the first country in Africa and one of the first few countries globally to introduce a digital currency.

    The new payment system, which took the Central Bank of Nigeria (CBN) four years to roll out, is expected to drive financial inclusion, serve as a backbone for electronic payment in Nigeria and also enable the movement of more people from the informal to the formal sector, hence scaling up the tax base of the country.

    President Buhari also expects it to enable the government send direct payments to citizens eligible for specific welfare programmes as well as foster cross-border trade, a statement signed by presidential spokesperson Femi Adesina said.

    ”Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of, and concerns of the economy,” the President noted.

    ”The use of CBDCs (Central Bank Digital Currencies) can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country.”

    The President also commended the Governor of the Central Bank, Godwin Emefiele, his deputies and the entire team of staff who worked tirelessly to make the launch of Africa’s first digital currency a reality.

    ”Work intensified over the past several months with several brainstorming exercises, deployment of technical partners and advisers, collaboration with the Ministries of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission (NCC), integration of banking software across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System, ” he said.

  • Nigeria Govt. Unveils E-Naira, Promises 90 days free Transactions on Platform

    Nigeria Govt. Unveils E-Naira, Promises 90 days free Transactions on Platform

    President Muhammadu Buhari on Monday unveiled the e-Naira.

    Buhari launched the country’s digital currency at the Presidential Villa, Abuja.

    The event had in attendance the Vice President, Yemi Osibanjo; Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele; Attorney General of the Federation, Abubakar Malami; among others.

    the Central Bank of Nigeria has said that all transactions conducted on the newly launched digital currency platform, eNaira will be free for 90 days.

    The bank, however, stated that it will revert to its guide on applicable charges by banks and other financial and non-financial institutions at the end of the stated period.

    The apex bank disclosed this in the framework titled, ‘eNaira Circular and Guidelines’ released on Monday.’

    The CBN said, “The charges for transactions that originate from the eNaira platform shall be free for the first 90 days commencing from October 25, 2021, and then revert to applicable charges as outlined in the Guide to Charges by Banks, Other Financial and Non-bank Financial Institutions.”

    The apex bank noted that Electronic Funds Transfer below N5,000 is charged N10; N5,001 – N50,000 is charged N25 and for above N50,000, a N50 charge is associated.

    The bank also said phone numbers without verified National Identification Number (Tier 0) will have a daily transaction limit of N20,000, while the maximum that the account can hold is N120,000.

    For phone numbers with verified NIN or Tier 1, CBN said they have a daily transaction cap of N50,000 and a maximum balance of N300,000.

    Tier Two accounts will have access to a daily transaction of N200,000, while N500,000 is the maximum balance that can be held.

    The Tier 3 account holder can transact a maximum of N1m daily, while the Maximum balance it can hold is N5m.

    However, the CBN noted that merchant accounts have access to unlimited transactions.

    According to the Bank, merchants are duly accredited individuals and non-individual (corporates) authorized to conduct business in Nigeria.

  • Ahead of October Launch, E-Naira Platform Goes Live

    Ahead of October Launch, E-Naira Platform Goes Live

    The official website of the upcoming Central Bank of Nigeria’s (CBN) digital currency, the eNaira, has gone live, exactly one week to the planned launch of the initiative.

    Remarkably, 24-hours after the website went live, it has recorded over one million hits, according to analytics.

    The development shows a reflection of the level of interest in the proposed digital currency.
    The website promises easier financial transactions for users of eNaira, offers opportunity for peer-to-peer payments which allows users to send money to one another through a linked bank account or card; allows customers to move money from their bank account to their eNaira wallet with ease; can monitor their eNaira wallet, check balances and view transaction history; and make in-store payment using their eNaira wallet by scanning QR codes.

    In addition, customers are allowed to scan the QR Code on the website to get started.
    CBN Governor, Mr. Godwin Emefiele, while speaking to a gathering of foreign investors in New York, recently, had told his audience that because of activities surrounding the country’s Independence celebration on October 1, the earlier planned launch of the eNaira on same date would likely be rescheduled to October 4, 2021.
    “The central bank would not want the event to take the shine away from the Independence celebration,” he said.

    “We are going to be the first country in Africa to launch a digital currency. It is a novel idea because we think it will facilitate trade, Nigeria being the biggest economy in Africa, this will set the tone to tell Africa that we are ready to lead and we would indeed lead in trade and we would make sure that happens.

    “Between all central bankers in ECOWAS, we are already working on certain collaboration to make trade, payment and banking system integrate in such a way to set example on the African Continental Free Trade Area (AfCFTA),” he added.

    In line with global trend, the CBN recently took a major step towards the launch of its digital currency with its formal announcement of its engagement of global fintech company, Bitt Inc. as its technical partner for the project. To choose the technical partner, the CBN went through a rigorous vendor selection process in line with the Public Procurement Act, conducted by seven departmental directors and a Deputy Governor whereby several companies were evaluated. The evaluation was based on the following criteria: technology ownership and control; implementation timeline; efficiency, ease of adoption; support for anti-money laundering and combating the financing of terrorism (AML/CFT); platform security; interoperability; implementation experience.

    Emefiele expressed optimism that the eNaira, would bring about increased cross-border trade, accelerate financial inclusion and lead to cheaper and faster remittance inflow. He said the digital money would lead to easier targeted social interventions, as well as improvement in monetary policy effectiveness, payment systems efficiency, and tax collection.

    According to him, after its unveiling, Nigerians should be able to download the eNaira app from either Google plays store or Apple app store, on board themselves and fund their eNaira wallet using their bank account or with cash at a registered agent location.

    “If you are a bank customer and you have say N10 million in your bank account, for your comfort of spending and making purchase, you can tell the bank to load N2 million out of your N10 million into your wallet.

    “So, your bank balance in physical cash drops to N8 million, while your e-wallet carries N2 million. With that you can make purchases both within and across the country.
    “There are so many variance of the eNaira. But this is where we would start because we are not going to pretend that there are not risks in opening your system up. We would look at the various products, determine the risk, determine the best way to mitigate the risk before we now open it up more and more,” Emefiele added.

    Also shedding more light on Bitts, he said, “we chose them as a partner. In some other climes where they are, they have their software and they earn their money. But we chose that they would establish their company in Nigeria. “The CBN will own substantially stake in that company. It is a company that will be established in Nigeria and majority holding will be the CBN,” he added.

    On his part, the CBN’s Director, Corporate Communications Department, Mr. Osita Nwanisobi, explained that the eNaira project had been a long and thorough process for the apex bank following its resolve in 2017, to digitise the local currency after extensive research and exploration.

    Meanwhile, China’s central bank last weekend announced that all transactions of crypto-currencies are illegal, effectively banning digital tokens such as Bitcoin.

    “Virtual currency-related business activities are illegal financial activities,” the BBC quoted People’s Bank of China to have said, warning it “seriously endangers the safety of people’s assets”. China is one of the world’s largest crypto-currency markets. Fluctuations there often impact the global price of crypto-currencies.

    The price of Bitcoin fell by more than $2,000 (£1,460) in the wake of the Chinese announcement.
    It was the latest in China’s national crackdown on what it sees as a volatile, speculative investment at best – and a way to launder money at worst. Trading crypto-currency had officially been banned in China since 2019, but had continued online through foreign exchanges. However, there has been a significant crackdown this year.

    In May, Chinese state intuitions warned buyers they would have no protection for continuing to trade Bitcoin and other currencies online, as government officials vowed to increase pressure on the industry.

    In June, it told banks and payment platforms to stop facilitating transactions and issued bans on “mining” the currencies – the trade of using powerful computers to make new coins.

  • CBN E-Naira and the fraught Fiat Naira

    CBN E-Naira and the fraught Fiat Naira

    By Adefolarin A. Olamilekan

    All things being equal, as the CBN eNaira launch date of October 1, 2021 set. Whether Nigerians are ready for the e-naira, and not doubting it technological efficacy is a question many contemplate on. However, as part of the apex bank enlightenment campaign and educating Nigerians on the e-naira. The Central Bank of Nigeria in a recent statement, as reported in the media, said “the CBN digital currency is not what every country has implemented. We are blazing the trail in Africa. Nigeria is the only country in Africa that is doing it. And so many advanced countries are not doing it,”

    It added that “Today, anywhere you present naira to pay, compulsorily it must be accepted because that is our fiat currency, in the same way naira is accepted that you can’t reject it, is the same way e-naira must be accepted. In addition, the apex bank said” similar to the fiat currency (naira), the CBN bears all liabilities for the eNaira. “The liability of the enaira money is directly on CBN, which is similar to the cash we hold. The liability of the cash we hold today rests with the CBN. So, it gives Nigerians the opportunity to bank with CBN,”

    On its benefits, the CBN said eNaira would save the cost of printing new naira notes. As the “minting of enaira is electronic and charges of transferring funds would be lower for those using the enaira”. Interesting, eNaira according to CBN is going to be a “game changer that would provide an alternative payment system and would radically transform the payment landscape”.

    Irrefutably, the CBN could be right on the issues of cost of printing fiat naira notes. Over the years, concerns around unwieldy portability, the acrimony associated with shortage of change for small transactions, the inflationary push associated with product pricing, the rapid deterioration of both paper and polymer notes. This are genuine take, however, far from the above reasons, the worries, about fiat naira’s purchasing power been affected by double-digit annual inflation rates, are equally significant challenges to the current Naira profile.

    Undeniably, some analysts have argued if the eNaira can enhance the value of fiat Naira? Especially going by current fraught performance of the naira. Regrettably, the travails of our national currency didn’t start today. it abysmal depreciation dated back to 1986 with the introduction of Second Tier Foreign Exchange Market, SAPs policies, our  import dependent economy, petrol dollar (mono-cultural economy),structural deficit productive sector lacking the integration of primary, secondary and tertiary of agrarian and mining sectors. All this are compounded by lack of visionary leadership that is not bold in action.

    Instructively, to enhance the value of the naira, diversifying our economy to produced more, earning additional export revenue and competitive against import substitutes have all been suggested. Appreciably, the creation of eNaira is a welcome development, especially as we witness the current mangers of the nation’s monetary policy take a bold and proactive steps.

    Conversely, if the root causes of our economy’s incurable double-digit annual inflation rate remain unresolved, the purchasing power of the eNaira would also be rapidly eroded, making our Naira a poor store of value. Incontrovertibly, we understand the monetary policy ideas behind eNaira; our task to bring back fiat naira to a more valuable national currency of pride is more tasking. The constant burden of supply deficit of the dollar, (which must be contained to restrain inflation); demand- supply facilitated by conscious manipulation of speculators and black marketers of undoubtedly creates this scenario.

    As a result, the systemic paradox of a weakening Naira despite increasing reserves, ultimately, makes our currency less desirable to hold as a safe store of value. This in the last couple of days the apex back has taking a stringent measures and it is laudable.

    The Naira has unexpectedly depreciated, as our dollar reserves climbed from less than $4bn in 1996 to over $50bn in recent years. Therefore, the appropriate re-positioning of the current fraught the of Naira exchange rate to other currencies is not the task to be left for the CBN alone.

    The Nigerian state and her Economic Team should have a short and snappy plan to revamp the economy, progressively but without doubt. The manner our economic diversification policy is been engage is not achieving the needed result. How come crude oil still accounts for 90 per cent of the total export despite abundance of mineral resources, cash crops and other commodities that are mega earners in other places?

    In retrospect, there is no sensible reason and explanation why the Nigerian state cannot launch simultaneous monetary and fiscal policies to redeemed the domestics’ economy. More importantly, the Buhari administration should have more than a passing interest in alleviating sufferings of the Nigerian masses. It is well noted that the critical function of the Central Bank of Nigeria (CBN) crisscrosses regulating interest rate, inflation and foreign exchange. 

    The Federal Government and its economic team should sit up and get real. Despite the enormous advantages and the positive impact said to be associated with liberalizing the welfare of the masses is still at hefty. For us, a hearten industrial capacity utilization and expansion would ensure a realistic and stabilize naira exchange rate and drastically check inflation.

    As foremost Nigerian Economist late Henry Boyo would say” I am a proud and patriotic Nigerian and the battle against the dollarization of the economy… is one that is aimed at nairanisingit” And this we stand for!

  • How far can CBN sustain E-Naira?

    How far can CBN sustain E-Naira?

    By Adefolarin A. Olamilekan

    The Central Bank Digital Currency (CBDC) digital e-naira comes on stream on October 1, 2021. With the benefit of hindsight the apex bank has been conducting research in regard to Central Bank Digital Currencies since 2017 and to understanding how Hyperledger Fabric Blockchain technology is being used globally. At a recent stakeholders meeting organized by the apex bank Information Technology Department. It explained that Hyperledger Fabric is an open source project that acts as a foundation for developing blockchain-based products, solutions, and applications using plug-and-play components that are aimed for use within private enterprises.

    The Nigerian monetary authority added that the importance of its digital currency will include macro management and growth, cross border trade facilitation, financial inclusion, monetary policy effectiveness, improved payment efficiency, revenue tax collection, remittance improvement, and targeted social intervention.

    Not envying this stride out by the Godwin Emefiele lead CBN. Some countries across the globe such as China (digital Yuan), Bahamas (sand dollar), and Eastern Caribbean (DCash) are among the few countries that have officially launched their own national digital currency. In the meantime, African countries taking part to develop its CBDC include South Africa (digital Rand), Tunisia (eDinar), Ghana (e-cedi), Sweden, Japan, South Korea, and Russia. Significantly, if the pilot scheme is eventually launched, Nigeria will join other countries

    In retrospect, earlier this year, CBN banned cryptocurrency transactions in the country and warned that cryptocurrencies pose the risk of loss of investments, money laundering, terrorism financing, illicit fund flows and other criminal activities. However, the ban was followed with a huge outcry from sundry financial experts and concerned citizens. This writer’s modest intervention comes in an opinion polemic title “CBN, cryptocurrency and monetary capitalist” at that time. The Central Bank of Nigeria, CBN, and stance on the banned however comes with a blueprint of going into digital currency. And the advice by the Vice President Yemi Osinbajo that “thoughtful and knowledge-based regulation not prohibition” did count at this point.

    According the CBN the e-Naira will be a legal tender for the entire country as a non-interest-bearing CBDC status issued by a Sovereign Authority. It has transaction limit for customers and a value-based transaction. It will not grow in value like Bitcoin or other crypto currencies but it will function the same way the Naira does. The e-Naira will be pegged to the Naira so their value remains the same like stable coins pegged to the dollar. There is an e-wallet of the apex bank called “Speed wallet,” to be issued to all users and customers.

    On the other hand, to use the e-Naira to transact, users will have to download the speed wallet, validate their account on the wallet by using either their phone number, National Identity Number (NIN) or Bank Verification Number (BVN). Once done, users can begin to use the wallet. Interestingly, all users will be able to send money using Peer-to-Peer (P2P) transactions through their wallets to other wallet holders, Person-to-Merchant/Business where e-Naira users can pay for items to merchants who have the e-Naira wallet and vice versa.

    According to the CBN, the e-Naira will aid financial inclusion and propel a cashless policy-Naira. Moreso, participation of Government Ministries, Departments and Agencies (MDAs) in transactions with e-Naira to do remittances to their staff and members of the public is one of its possibilities. This is in the form of citizens making payment to MDAs through the e-Naira.

    Furthermore, the e-Naira will be created independently of bank accounts; the wallet will be created by financial institutions that will create customer identification through an application product interface. Poignantly, the “Speed wallet” of the CBN will not compete with existing banks’ customers’ wallets. What’s more, is that e-naira as a strategic national interest would be a critical security infrastructure. That will be subjected to comprehensive security checks; all data and personally identifiable information (PII) will be kept off the ledger and will not be stored on the ledger. Technology enables non-counterfeitable CBDC as a digital bearer instrument which meets the scale, interoperability, instant settlement and other operational and policy requirements for use as legal tender. This CBN’s e-Naira system hopes to achieve.

    The point here is that with all the exciting developments about the CBN’s e-Naira, our case is for forethought and heed. However, fast forward to the same CBN policy of cashless, the success of that policy is in between. However, there are experts who believe e-Naira would better the implementation of CBN’s cashless policy.

    Ironically, CBN’s mandate drive for financial inclusion, through the e-Naira may have to contend with deficit internet infrastructure challenges. There are concerns also that a Nigerian CBDC will be too costly to implement when compared to other systems that exist.

    Grippingly, the apex bank has its duty cut out. Hence, whenever we celebrate CBN’s innovation as a monetary authority, we must recognize the need for policy sustenance against the process of accumulation of external reserves. We must show greater interest in the apex bank avoiding unfortunate, distortion, primitive and retrogression in Naira depreciation and destabilizing interest rates.

    As a result it must take measures to contain inflation. As it has been put forward elsewhere, the central bank is “better off spending its time and resources on pressing issues like how to combat double-digit inflation”. In consequence, this would help not to crowd out the real sector, from access to cheaper loanable funds that are necessary to drive lower inflation rates and boost economic growth with increasing job opportunities.

    The question therefore is: “How far can CBN sustain E-Naira? Nonetheless, as foremost Nigerian economist and monetary policy analyst Late Henry Boyo would say, “Nigerians do not interrogate the process through which CBN consolidates its policies”.

  • CBN Names Bitt Partner For E-Naira Rollout

    CBN Names Bitt Partner For E-Naira Rollout

    The Central Bank of Nigeria (CBN), has announced the formal engagement of the global finance technology firm, Bitt Inc., as the technical partner for the rollout of the digital currency e-Naira.

    The selection of Bitt Inc. from among highly competitive bidders is hinged on the company’s technological competence, efficiency, platform security, and interoperability and implementation experience, CBN stated.

    “In choosing Bitt Inc, the CBN relied on the company’s tested and proven digital currency experience, which is already in circulation in several Eastern Caribbean countries,” the bank’s director of corporate communications, Osita Nwanisobi, stated in a statement.

    “Bitt Inc. was key to the development and successful launch of the central bank’s digital currency (CBDC), pilot of the Eastern Caribbean Central Bank (ECCB), in April 2021,” he said.

    CBN listed the benefits of the digital currency to include increased cross-border trade, accelerated financial inclusion, cheaper and faster remittance inflows.

    Others are easier targeted social interventions, as well as improvements in monetary policy effectiveness, payment systems efficiency, and tax collection