Barely hours after the long-awaited Central Bank Digital Currency (CBDC) also called eNaira was unveiled by President Muhammadu Buhari at the Presidential villa, Abuja, 33 banks have been fully integrated on the eNaira platform, just as 2,000 customers have been onboarded and 120 merchants registered on the portal.
The CBN Governor Mr Godwin Emefiele, who made the disclosure at the launch expressed joy that Nigeria was the first country in Africa and the few in the world to unveil a digital currency.
He hailed President Buhari and CBN staff for their support to ensure the success of the initiative.
According to him, 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.
Already, N500 million has been successfully minted by the apex bank and N200 million issued to financial institutions.
“Today, customers who download the eNaira Speed Wallet App will be able to perform the following:
Onboard and create their wallet; fund their eNaira wallet from their bank account; transfer eNaira from their wallet to another wallet and make payment for purchases at registered merchant locations.
“With the launch of the eNaira – the first in Africa and one of the earliest around the world, there have been continuing debates on the true value of the naira. Rather than worry today about 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 have 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.
“Today, in addition to all policies and actions of the CBN to support the economy especially through the trying times of COVID-19, the apex bank is announcing a new financial instrument titled “The 100 for 100 PPP – Policy on Production and Productivity”, which will be anchored in our Development Finance Department under my direct supervision. Under this policy the CBN will 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 a new set of 100 companies, whose names will be published in National Dailies for Nigerians to verify and confirm.
“Working through banks, the financial instrument will be available to their customers in critical areas to boost the production and productivity, and to immediately transform and jumpstart the productive base of the economy. After these 100 projects by companies in the first hundred days from November 1, we will take the next 100 companies/projects for another 100 days beginning February 1, 2022, and then another 100 companies for another 100 days beginning from May 1, 2022.The purpose of this instrument is to take further steps to reverse our over reliance on imports. We believe that if we target and support the right companies and projects, we will see a significant, measurable and verifiable increase in local production and productivity, reduction in certain imports, increase in non-oil exports, and improvements in the FX-generating capacity of the economy. This, in my view, is the best and most sustainable way to address the Naira’s value – whether in hard currency or digital eNaira – through production, production and more production”, Emefiele explained.
Earlier in his remarks, President Muhammadu Buhari stated that while 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, integration of banking softwares across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System.
The President added that a handful of countries including China, Bahamas, and Cambodia have already issued their own Central Bank Digital Currencies (or CBDCs).
“A 2021 survey of Central Banks around the world by the Bank for International Settlements (BIS) found that almost 90 percent are actively researching the potential for CBDCs, 60 percent were experimenting with the technology and 14 percent were deploying pilot projects.
“Needless to add, close monitoring and close supervision will be necessary in the early stages if implementation to study the effect of eNaira on the economy as a whole.
“In response to developments in the global economy, 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.
“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.
“This move was 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. They have 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, he stated.
