What do you think of CBN’s move to create e-naira?

The introduction of the e-naira is a good development. If bitcoin and other cryptocurrency are not considered a legal tender in the Nigerian financial space, the e-naira will fill that gap. When CBN Deputy Governor of Operations, Folashodun Shonubi made a statement in this regard on a webinar recently, he said the Central Bank in its implementation has ensured the e-naira feeds our economy and provides greater value. The value of the e-naira will be same as the physical note. This will give the digital economy campaign a total success as more people will be banked and make payments faster and easier. In Nigeria and by extension other developing countries, internet connectivity is a challenge especially in rural areas. This could be a challenge, but nonetheless, it is a noble project to embark upon. Other technicalities will be fixed with time and the whole process will be improved upon with critical infrastructure in place.

I think the e-naira is a good initiative in the sense that in the next couple of years, the global economy should be moving to digital currencies. We’ve heard announcements by various countries on plans to start their digital currency, so we can say that the CBN is moving in the right direction. I don’t think the introduction of a digital currency would strengthen the value of the naira. The e-naira is just a digital representation of the naira itself, so it doesn’t strengthen the value of our currency.

This is a good step to advance the banked population further and also encourage the financial inclusion ideology of the populace. We are entering into the next evolution and that’s the digital evolution and to be forward-thinking at this point in time is critical. The e-naira would aid international trade and strengthen the naira, but backward integration is still needed. The elements that affect the volatility of the NGN index are beyond just getting an e-naira. Will doing this directly affect the flow of naira in diaspora and aid foreign and bilateral trade? Yes, but we need a strong backward integration to increase our export to give us a favorable balance of payment, which could positively affect the naira.

This initiative by the CBN may not directly affect the naira. Still, it will indirectly positively affect the ease of doing business, especially with the trade, making Nigeria one of the first sub-Sahara Africa countries poised and prepared for digital evolution. To make this more effective, i.e. in terms of strengthening the naira, there should be goals set by the monetary and fiscal policy to be net exporters and not net importers and also to improve the standard of living with the inflation elements in view as well. The internet and cyber connectivity would be the issue in implementing the e-naira because Nigeria is faced with power supply and internet connectivity issues (we have one of the slowest internet and worst networks in the world) for the implementation to be as vigorous as it is intended to be. The sectors directly involved in this should be improved to prevent sub-optimization or counter-productivity of the e-naira.

I think it’s a good thing and a right step to take at this time. The world is innovating for all the right reasons, and Nigeria shouldn’t be left out. The introduction of the digital currency by the apex bank will solve, to a large extent, some of the challenges it has been facing in the country over time, especially in the area of monetary and fiscal policy. The benefit is enormous even if we, the citizens, don’t momentarily see it. And as a country, we have to adjust to such necessities. If our local financial institutions are to remain relevance in the next five to ten years from now, this is the way to go. Like every other thing, we will face our fair share of challenges associated with change and adjusting to a new way of doing things. Nigerians may still be confused about how it relates to their current funds in their local banks, what changes to expect and what not to. The Central Bank will have to up their game in sensitizing the people on this subject to ease usability and its acceptance by the populace.

It is a positive move in my opinion especially as we tend to evolve fully into a cashless society. If the suitable measures are put in place with proper regulations, the e-naira will help reduce the delays of daily transaction cost and also the speed in which transactions are settled. A lot of effort will be needed to enable this currency to be available for even the middle and lower class. That being said, Nigeria might not be fully ready for a digital currency.

I don’t know if I would say we’re not ready for digital currency. This is because anybody who uses the POS or mobile app or the USSD is already attuned to digital currency as we know it. I know the apex bank from all indications already has everything worked out judging by the roadmap which seeks to achieve the launch date. I see a lot of advantage in what the technology will bring. The existing payment system comes with a lot of cost. You have the N50 stamp duty and other associated costs which sort of excludes people from the lower rung of the ladder. People mostly deal on cash for almost everything from transport fare, purchase at the local market and all. The cost of transacting digitally is not expensive as such there can be greater adoption because of the potential benefits.

E-naira is a welcome development. This development is expected to enhance financial inclusion in the long run, lowering operational costs of handling physical cash as well as enhancing the efficiency of Nigeria’s payment systems. I have concerns regarding the likely impact on monetary policy transmission, financial stability, inflation as well as the role of financial institutions. I still feel the CBN should do a thorough research on digital currencies including looking for possible mechanisms to control crypto-currencies before embarking on this. 

I urge the CBN to use local realities to solve local problems. I must say that the idea of a digital currency is brilliant and welcome. I know the government wants to copy the likes of cryptocurrencies, bitcoin and the likes but it is not as easy as they think. The peculiarities of our system should drive us to a more innovative alternative. The government should work hand in hand with the CBN so as not to downplay the issue of trust. 

It is said that the new currency will not replace the physical naira but will act as a digital representation of it which is a good one but it is still unclear how the CBN will roll out the launch and who will have access to the new currency from the start. This shows that the CBN have not made enough research on what they are about to lunch which is not a good one as it will make the e-naira useless as time goes if they are unable to run it well. Since e-naira is not like bitcoin which is a cryptocurrency, it maintains the same value as the naira whereby its value will not rise and fall the way bitcoin does, which simply means it is not something to invest in to grow your fortunes. Now, how many Nigerians are ready to engage in any activity that won’t yield any profit to them like bitcoin does? I believe the e-naira won’t be effective for long.