The President, Major General Muhammadu Buhari (retd), on Monday, unveiled the Central Bank of Nigeria’s digital currency, also known eNaira, in a keynote event attended by top government functionaries at the State House, Abuja.
He said Nigeria’s Central Bank Digital Currency and its underlying blockchain technology could increase the nation’s Gross Domestic Product by $29bn over the next 10 years.
The event was attended by Vice-President Yemi Osinbajo; the Secretary to the Government of the Federation, Boss Mustapha; the Chief of Staff to the President, Prof. Ibrahim Gambari; members of the Federal Executive Council; top officials of the CBN and heads of relevant government agencies.
In his address, the President said the e-currency would 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.
According to him, the digital currency will help move many more people and businesses from the informal into the formal sector, thereby increasing the country’s tax base.
Buhari said, “In recent times, the use of physical cash in conducting business and making payments has been on the decline. This trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new digital economy.
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“Alongside these developments, businesses, households, and other economic agents have sought for new means of making payments in the new circumstances.”
Buhari lauded the CBN for coming up with the eNaira.
On his part, the Governor, CBN, Godwin Emefiele, said since the eNaira platform went live, there had been overwhelming interest and encouraging response from Nigerians and other parties across the world with over 2.5 million daily visits to the website.
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He said, “Thirty-three banks are fully integrated and live on the platform, N500m has been successfully minted by the bank, N200m has been issued to financial institutions, over 2,000 customers have been onboarded and over 120 merchants have successfully registered on the eNaira platform.”
The CBN governor also used the occasion to commend the President for “making history, yet again,” with the launch of the eNaira – the first in Africa and one of the earliest around the world.
Emefiele announced a new financial instrument titled, “The 100 for 100 PPP – Policy on Production and Productivity”, which he said would be domiciled in the Development Finance Department of the CBN under his direct supervision.
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He explained that under this policy, the CBN would advertise, screen, scrutinise and financially support 100 targeted private sector companies in 100 days, beginning from November 1, 2021.
The CBN also disclosed that all transactions conducted on the newly-launched digital currency platform would be free for 90 days. The regulator, however, stated that it would 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 also said that Ministries, Departments and Agencies could make payments and collect revenues using the eNaira wallet.
The CBN disclosed this in the framework titled, ‘eNaira Circular and Guidelines’, which was later released on Monday.
The central bank guide read in part, “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. MDAs may collect revenues or make payments in eNaira.”
But economic and financial experts have said that the eNaira will not change or affect the value of the naira in the foreign exchange market.
They also expressed concern over the risk of cyber attacks on the eNaira accounts of Nigerians.
They spoke against the backdrop of the unveiling of the eNaira by the CBN.
The immediate past Director-General of the Lagos Chamber of Commerce and Industry, Dr. Muda Yusuf, said there was no relationship between foreign exchange market and the eNaira.
He said, “There is no connection between the eNaira and the exchange rate. No relationship at all. Exchange rate is determined by the demand and supply fundamentals in the foreign exchange market.
“These are driven largely by imports, exports and the flow of capital across borders. The naira, whether digital or physical, is just a means of exchange and to some extent, a store of value.”
He, however, noted that the eNaira was consistent with current digitalisation trend across all sectors globally.
Yusuf, who is the chief executive officer, Centre for the Promotion of Private Enterprises, explained that digital applications typically came with efficiency, cost effectiveness, smartness in usage and convenience.
“But it is still not clear what the value proposition of the eNaira is, beyond the psychological satisfaction of joining the league of countries with digital currencies,” Yusuf stated.
The CPPE boss noted that transactions on these platforms were already in trillions of naira, and still counting, adding that it remained to be seen what additional value the eNaira would bring.
He said, “A great deal of sensitisation and awareness need to be undertaken to generate trust and confidence in this new payment system initiative.
“International investors typically would prefer a currency that is acceptable globally and convertible such as the dollar.”
He observed that many Nigerians were still trying to understand what the eNaira really entailed. A financial analyst and Senior Lecturer at the Pan Atlantic University and a financial analyst, Dr Olalekan Aworinde, said there was a need to do more sensitise the public more on the risks.
He said, “I think that the CBN should be aware of the fact that there is the risk of cyber attacks with the introduction of the eNaira.
“As a result, the CBN needs to properly educate the masses on how to use the eNaira in a way that would not put their safety and the safety of their funds at risk.
Another expert and the Chief Executive Officer of SD&D Capital Management Limited, Mr Idakolo Gbolade, also said there was the need to sensitive the public the more.
Some Reasons you should Use the Digital Currency
The fourth industrial revolution has ushered in Africa’s first Central Bank Digital Currency (CBDC), the eNaira, set to be launched by Nigeria. The eNaira is posed to benefit the everyday Nigerians and the country at large.
Hence, it would be prudent to understand why individuals should jump on the eNaira bandwagon.
The CBN stated earlier that the eNaira is meant to create a secure and cost-effective process for remittance inflow to the country, amongst other benefits.
When compared to FIAT, the eNaira has a lower cost. The account holder is not charged for daily transfers between accounts. The fact that traders will not be charged fees for withdrawals and deposits to and from their bank account is a huge incentive. Transaction fees are eliminated, lowering the cost of doing business while increasing security.
The apex bank also stated that eNaira’s usability would improve as Nigerians without internet-enabled phones would be able to transact without having to subscribe to data or having an internet-enabled phone.
The CBN has also said that the eNaira can serve as a medium for the government to send direct payments to citizens eligible for specific welfare programs.
What you should know about the eNaira
- The eNaira shall be administered by the CBN through the Digital Currency Management System (DCMS) to mint and issue eNaira.
- Financial institutions shall maintain a treasury eNaira wallet for holding and managing eNaira on the DCMS.
- The Financial institutions (FI) Suite is the primary application used by the FIs to manage their digital currency holdings, requests, and redemption with the CBN.
- The eNaira stock wallet belongs solely to the CBN and it shall warehouse all minted eNaira.
- Two-factor authentication and other measures shall be adopted to ensure the security of the eNaira wallet.
- The charges for eNaira transactions shall be in line with the Guide to Charges by Banks, Other Financial and Non-bank Financial Institutions.
- Financial Institutions are required to comply with the Money Laundering (Prohibition) Act 2011 (as amended), the Terrorism (Prevention) Act 2011 (as amended) and all subsisting anti-money laundering laws and regulations as may be issued by the CBN from time to time.
- The eNaira is equitant to the physical Naira, it is the official tender of Nigeria and is a liability of the CBN. The eNaira and Naira will always be exchanged 1:1, meaning it would only appreciate when the Naira is stronger.
Consumer Complaints concerning the usage of the eNaira shall be referred to the Helpdesk of users’ preferred FI Helpdesk. If unresolved by the FI Helpdesk, it shall be escalated to the eNaira Helpdesk via 0800myeNaira (0800 6936 2472) or [email protected] for resolution.
How Digital Currency Will Impact On Nigeria’s Economy
The adoption of the Central Bank Digital Currency (CBDC) and its underlying technology, called block chain, can increase Nigeria’s GDP by $29billion over the next 10 years, President Muhammadu Buhari said Monday in Abuja at the official launch of the eNaira.
The President also declared that the introduction of the eNaira would enable the government to send direct payments to citizens eligible for specific welfare programmes as well as foster cross border trade.
President Buhari said that alongside digital innovations, CBDCs can foster economic growth through better economic activities, increase remittances, improve financial inclusion and make monetary policy more effective.
”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 use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country,” he said.
The President said with the launch of eNaira, Nigeria has become the first country in Africa, and one of the first in the world to introduce a Digital Currency to her citizens.
He 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.
The President, who assured Nigerians of the safety and scalability of the CBDC system, said the journey to create a digital currency for Nigeria began sometime in 2017.
”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.
The President also used the occasion of the unveiling of the eNaira to painstakingly explain to Nigerians why he approved the use of the digital currency.
”In recent times, the use of physical cash in conducting business and making payments has been on the decline. This trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new Digital Economy.
”Alongside these developments, businesses, households, and other economic agents have sought for new means of making payments in the new circumstances.
”The absence of a swift and effective solution to these requirements, as well as fears that Central Banks’ actions sometimes lead to hyperinflation created the space for non-government entities to establish new forms of “private currencies” that seemed to have gained popularity and acceptance across the world, including here in Nigeria.
”In response to these developments, an overwhelming majority of Central Banks across the world have started to consider issuing digital currencies in order to cater for businesses and households seeking faster, safer, easier and cheaper means of payments.
”A handful of countries including China, Bahamas, and Cambodia have already issued their own CBDCs.
”A 2021 survey of Central Banks around the world by the Bank for International Settlements (BIS) found that almost 90 per cent are actively researching the potential for CBDCs, 60 percent were experimenting with the technology and 14 per cent were deploying pilot projects.
”Needless to add, close monitoring and close supervision will be necessary in the early stages of implementation to study the effect of eNaira on the economy as a whole.
”It is on the basis of this that the Central Bank of Nigeria (CBN) sought and received my approval to explore issuing Nigeria’s own Central Bank Digital Currency, named the eNaira,’’ he said.
Equally, the Nigerian leader noted that his approval was also underpinned by the fact that the CBN has been a leading innovator ‘‘in the form of money they produce, and in the payment services they deploy for efficient transactions.’’
He noted that Nigeria’s apex bank has invested heavily in creating a Payment System that is ranked in the top ten in the world and certainly the best in Africa.
”This payment system now provides high‐value and time‐critical payment services to financial institutions, and ultimately serves as the backbone for every electronic payment in Nigeria.
”They have also supported several private‐sector initiatives to improve the existing payments landscape, and in turn, have created some of the world’s leading payment service providers today,’’ he said.
In his remarks, the CBN Governor explained that 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 1 naira to 1 eNaira,” he said.
Emefiele added that the CBN has given careful consideration to the entire payments and financial architecture and has designed the eNaira to complement and strengthen these ecosystems and has implemented secure safeguards and policies to maintain the integrity of the financial system.
He pledged that there would be strict adherence to the anti-money laundering and combating the financing of terrorism (AML/CFT) standards in order to preserve the integrity and stability of Nigeria’s payment system.
According to Emefiele, since the eNaira platform went live, there has been overwhelming interest and encouraging response from Nigerians and other parties across the world with over 2.5 million daily visits to the website.
He listed the following milestones:
”33 banks are fully integrated and live on the platform, 500 million has been successfully minted by the Bank, N200 million has been issued to financial institutions, over 2,000 customers have been onboarded and over 120 merchants have successfully registered on the eNaira platform”.
The CBN governor also used the occasion to commend President Buhari for making history, yet again, with the launch of the eNaira – the first in Africa and one of the earliest around the world.
He also dispelled fears on the nation’s foreign reserves, saying the reserves are strong and getting stronger by the day.
”Mr. President, as you make ground breaking reforms, there have been continuing debate on the true value of the Naira. Rather than worry today on the direction of the exchange rate, let us take a step back and analyze how we got here in the first place.
”Please recall that since the advent of the International Monetary Fund (IMF) led Structural Adjustment Programme (SAP) in 1986, and the introduction of the Second Tier Foreign Exchange (SFEM) market, the Naira has been on a one-way free fall from parity to the US Dollar in 1984 to over N410/USD today.
”Some 35 years later, we have not been able to achieve the many promises and objectives of that programme.
”Instead, what we have seen is widespread import dependency, which has wiped out most of our production and manufacturing bases and exported all our jobs in the process.
”What has happened to the massive textile factories across our nation such that we import almost all cotton products when we are rich in cotton?
”What has happened to our vehicle assembly plants across the nation such that we import most vehicles and have become a massive dumping ground for dying second-hand vehicles?
”What has happened to our rubber plantations through which we made the best tyres and rubber products in the world? What has happened to our groundnut pyramids? What has happened to our Cocoa farms? What has happened to our palm oil mills?
”Under your leadership, Mr. President, we must stop this decline for good! We must return to massive homemade production; we must get our people working again. We must create the economic environment for massive domestic production and significant non-oil exports.
”As custodians of your national reserves, let me first assure you that there is no cause for alarm. Our FX reserves are strong and indeed getting stronger by the day, crossing the 40 billion USD mark, and is one of the highest in Africa – and growing.
”But we cannot fritter our reserves away on cheap imports and currency speculators. We must return to an employment-led growth anchored on productivity and rewarding producers of local goods, services, innovation and new technologies.
”If you consume cheap imports and export our jobs, we will make you pay dearly; but if you produce locally – with little or no foreign inputs beyond machinery, we will support you, and the markets will reward you abundantly,” he said.
In addition to all policies and actions of the CBN to support the economy especially through the trying times of COVID-19, Emefiele announced a new financial instrument titled “The 100 for 100 PPP – Policy on Production and Productivity”, which will be anchored in the Development Finance Department under his direct supervision.
He explained that under this policy the CBN would advertise, screen, scrutinize and financially support 100 targeted private sector companies in 100 days, beginning from 01 November 2021, and rolling over every 100 days with new set of 100 companies, whose names will be published in National Dailies for Nigerians to verify and confirm.
Step By Step Guide On How To Download And Open e-Naira Wallet
- Where to start is to download the e–Naira app from google store place or apple.
- Note that after requesting the app, you may be asked to verify your identity by entering your passcode or by using Touch ID or Face ID.
- From the Home screen, tap the App store. If the e-Naira Speed Wallet app isn’t available on your home screen, swipe left to access the App Library.
- To install apps, you must sign in with your Apple ID or create one.
- To browse the App Store, tap Apps.
- To search for apps by name, tap search (at the bottom) then type e-Naira Speed Wallet’s app.
- When the app appears, tap the app. Tap GET, then tap INSTALL.