Introduction
• Nigeria, the most populous African nation, has experienced a severe cash shortage which has increased the adoption rate of its CBDC, the eNaira.
• Nigeria is the first African nation to launch a sovereign digital currency and after launch, it suffered a low adoption rate from citizens.
• The recent cash shortage resulting from new financial policies and cash withdrawal limits has forced citizens to utilize digital solutions.
Godwin Emefiele’s Take on eNaira
Godwin Emefiele, Nigeria’s CBN governor, stated that the CBN minted over 10 billion eNaira and nearly 3.4 billion is already in circulation. Furthermore, the Nigerian government is fueling the adoption of this digital currency by using it for payments under Nigerian social schemes – This has contributed 4 million new wallets. Emefiele also highlighted his bullishness on digital currencies as they have become preferred electronic payment channels for financial inclusion and serve as social intervention plans in the Nigerian economy.
Adesoji Solanke’s View on eNaira
Adesoji Solanke, a Nigerian Director at Renaissance Capital shared his views on eNaira stating that although the government wants increased adoption from citizens, there are still limitations especially regarding requirements such as having to possess a smart device and internet connection. He believes that most people receiving transfers are poor and might find this scheme challenging since having to own both items can be cost-intensive for them. Despite this challenge; if smartphone users in Nigeria exceed 140 million by 2025 (estimated between 25-40 million now), then more individuals could benefit from this payment system in future years.
The Demonetization Policy of Nigeria
The governor of Central Bank of Nigeria (CBN) Godwin Emefiele announced that transactions with eNaira have seen an impressive 63% increase up to 22 billion Naira ($47.7 million). This significant growth is credited due to its demonetization policy which effectively switched out physical notes with digital money across all sectors within the country’s economy – creating an entirely digitized economic system instead of relying solely on physical notes or coins anymore.
Conclusion
In conclusion; despite some challenges such as cost-expense for acquiring necessary equipment like smartphones or internet connection – Nigeria’s demonetization policy is proving successful with encouraging results so far as transactions involving their CBDC “eNaira” have grown significantly over time; leading many Nigerians to utilize digital solutions instead of relying solely on traditional methods involving physical notes or coins anymore thus making transactions faster and easier than ever before!