According to the Central Bank of Nigeria (CBN), the electronic version of the Nigerian Naira, known as the eNaira, exhibited a remarkable increase in August, surging by 284.6% and reaching a substantial sum of N9.78 billion.
This was disclosed in the apex bank’s Monthly Economic Report for August 2023. However, the eNaira for the month was substantial, when compared to the Currency-In-Circulation (CIC) it was only 0.37%.
The CBN also reported an 11.7% decline in currency-in-circulation for August to reach N2.66 trillion. The decline in CIC was attributed to a rise in the use of electronic payment methods for business transactions.
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Total credits for August increased by 0.8% to N38.55 trillion for the month with the service sector constituting over half of the credits at 52.2%. The industry and agricultural sector represented 43.2% and 4.6% respectively.
Also, consumer credits for the month stood at N2.99 trillion representing an increase of 16.9% from the previous month when compared to the previous month. The report noted that the rise in consumer credit was a result of an increase in demand for credit facilities by economic agents.
Personal loans constituted the most consumer credit for the month at 75.4% trailed by retail sector loans which represented 24.6%.
With the launch of the naira in October 2021, Nigeria became the first country in Africa and one of the seven countries in the world to have a digital currency. The eNaira project according to the CBN is envisaged to improve financial inclusion, increase remittance, and ensure a more effective monetary policy.
At the time of the launch, the former Governor of CBN Godwin Emefiele forecasted that the digital currency could boost Nigeria’s GDP by as much as $29bn over the next 10 years. Amongst other advantages, he disclosed that it is expected to boost commerce by making retail transactions more seamless in places such as petrol stations and supermarkets
According to reports, the number of eNaira wallets spiked more than 12-fold to 13 million since October 2022, when CBN announced the redesigning of the old naira notes, which led to a nationwide cash crunch.
The former CBN Governor as at then, disclosed that the volume of transactions had jumped to 63% to N22 billion, about $48 million this year.
Meanwhile, why there’s a shortage of statistics on eNaira usage, it is safe to say that Africa’s first central bank digital currency (CBDC) hasn’t caught the interest of many Nigerians.
Given its perks of speedy transactions at zero fees amongst others, many Nigerians are yet to take advantage of what the Central Bank of Nigeria (CBN) describes as the same naira with more possibilities, especially when digital payments are fast becoming viable options.
In August 2023, the acting Governor of CBN Folashodun Adebisi Shonubi, disclosed that modifications will be made to the eNaira to boost adoption.
Shonubi said the CBN was amending the current model of the Central Bank Digital Currency (CBDC), the eNaira, to ensure an increase in the volume and activity of wallet holders.
The bank leadership in a concerted effort to drive the CBDC usage, introduced new features, such as upgrading the eNaira to support NFC technology, which is the same technology used by popular platforms like Apple Pay and Google Pay for contactless payments.
Additionally, the central bank introduced enhanced programmability functions that will enable users to set restrictions on payments, including utilization in government aid programs like farmer loans.
Notabl6, the IMF noted the eNaira holds significant potential for streamlining the remittance process.