A recent report by the Central Bank of Nigeria (CBN) has disclosed that the value of eNaira in circulation rose by 302 percent in nine months to N10.26 billion at the end of September 2023, reflecting an increase in the adoption of the Digital currency.
Analysis of the CBN data on Currency in Circulation from the quarterly statistical bulletin for the third quarter (Q3) 2023, revealed that the value of eNaira in circulation rose sharply by 302 percent in nine months to N10.26 billion at the end of September 30th, 2023, 9M’23 from N2.55 billion at the end of 2022, 9M’22.
The increase represents 131 percentage points higher than the 171 percent increase recorded in the same period of 2022. Further analysis showed that eNaira in circulation recorded quarter-on-quarter, QoQ growth of 90 percent, 48 percent, and 43 percent in the Q1’23, Q2’23, and Q3’23 respectively.
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Notably, the Apex bank disclosed that the surge in eNaira adoption was driven by transactions via the USSD channels. The volume and value of eNaira transactions via the USSD channel are reported to have risen by 92.95 percent year-on-year, (YoY) and 120.93 percent in 9M’23 respectively, while the number of merchants accepting eNaira also rose 11.97 percent during the same period.
Recall that the CBN last year, announced the development of eNaira enhanced services to address challenges faced by unbanked Nigerians. This saw the apex bank roll out the unstructured supplementary service data (USSD) code *997*50# to enable users to carry out all banking transactions.
Through the code, users can send funds to an ATM directly from their wallets and withdraw cash without needing a bank account. Also, users can fund their wallets by purchasing vouchers which function like GSM-recharge cards, or fund their wallets via a web portal using the debit cards issued by traditional banks.
The apex bank believed that the introduction of the USSD code would help to improve financial inclusion, increase cross-border transactions, and diaspora remittances, and also to complement payment infrastructure, which is the purpose of the e-Naira per the CBN’s cashless policy.
The CBN launched the eNaira, on October 25, 2021, making Nigeria the first African country to launch a CBDC and one of the five countries in the world to adopt the technology. Interestingly, the launch came seven months after cryptocurrency transactions were banned in Nigeria.
The main reason for the launch of the eNaira was to promote financial inclusion, increase cross-border transactions, facilitate diaspora remittances, and complement existing payments systems.
Since October 2022, the number of e-Naira wallets has reportedly increased more than 12-fold to 13 million. There was also a 63% increase to N22 billion (US$48 million) in the value of transactions in 2023.