Two Years After; Why are Nigerians not Using eNaira

February 18, 2023
Anusiem Ikenna
Technology,
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We all saw what we may refer to as a memorable moment in the history of Africa when the Giant of Africa, Nigeria, launched their digital currency eNaira.

President Muhammadu Buhari inaugurated the eNaira at the State House on Monday, October 25, 2021. In his address, he stated that it will enhance remittances, promote cross-border trade, expand financial inclusion, and allow the government to deliver welfare payments.

Together with innovation, he claims that the implementation of a CBDC may boost economic activity and raise Nigerian GDP by $29 billion over the following ten years.

"I am thrilled to formally unveil the Central Bank of Nigeria's digital currency, the eNaira," he said. As a result, we have become the first African country and one of the first in the world to introduce digital money to our population."

It’s been two years now since we saw that glimmer of hope towards technological migration in Africa, the question now becomes; what went wrong, is the eNaira project another scam, why are Nigerians not using eNaira?

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Why Are Nigerians Not Using eNaira

Don’t get it wrong, Nigerian citizens are crypto enthusiasts.

Notwithstanding the Central Bank of Nigeria's prohibition on cryptocurrency-related activities in the banking sector, a crypto platform said that over 33.4 million Nigerians trade or hold crypto assets.

Why did a country of crypto lovers suddenly turn its backs on its very own digital currency? Here are the reasons why Nigerians are not using eNaira.

CBN’s Crypto ban

When the Central Bank of Nigeria (CBN) prohibited banks from enabling crypto-related payments in February 2021, Nigeria crypto adopters interpreted the action as an attack on crypto users.

The introduction of the eNaira later that year gave crypto lovers the impression that eNaira is a rival, hence they should not interact with it; It looks more like a psychology thing to me.

Perhaps the CBN might have increased adoption and usage among the cryptocurrency community and, consequently, among the majority of Nigerians if they had invited these crypto stakeholders to participate in the execution of the eNaira initiative.

Central Bank Didn’t want Partnership

Going it alone on the eNaira initiative was a bad idea since the CBN is a regulator, not a consumer-facing institution.

Central banks are not well recognized for interacting with retailers. You can see the uproar that this Naira makeover has created.

The majority of individuals are now traveling to the Central Bank, although it is not equipped to serve consumers.

Instead of attempting to promote the eNaira, let others provide solutions that will boost eNaira's adoption.

Internet Access

The wallet's requirement for a smartphone and internet access is a hurdle, but consider the folks you're attempting to send money to; they must be quite poor, aren't they?

In order to get some of these things up and running, there are a number of obstacles, including the cost of the smartphone and the cost of the internet.

Though, With the eNaira, there have been some initiatives to increase infrastructure for digital payments. The currency was provided as a payment option for retailers in September 2022 by the well-known African payments platform Flutterwave.

To actually get it up and running, a lot of work needs to be done both on the consumer and merchant end. This is a challenge for Nigeria's next president.

Government Mistrust

Since the ban on Twitter and Crypto, followed by the subsequent embargo on crypto by the Nigerian government, there has been mistrust among the citizens towards any government innovation.

The so many inconsistencies in Nigerian politics have made so many lose faith in any government project in the country. So government mistrust is one of the factors that have hindered eNaira adoption.

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Conclusion

The adoption of eNaira is presently not one thing CBN is smiling about, but who knows what happens in the future.

With the present government leaving the seat for another generation of leaders, who knows, their numerous interventions may affect the acceptance of eNaira by its citizens.