CBN AND THE ENAIRA GAMBIT

The digital currency is a good initiative. But there should be more public enlightenment about its usage

Money is a scarce commodity. But it is one that unites citizens, rich and poor, educated and illiterate, urban or rural anywhere in the world. To that extent, the Central Bank of Nigeria (CBN) as the apex regulator of all money matters in the country cannot play games on issues concerning the national currency without adequately educating the public. No matter how well-intended, the decision to launch a digital version of the Naira is a matter of public concern. The fact that even the elite and the media are still in the dark about the meaning and mechanics of this Central Bank Digital Currency (CBDC) ought to worry the apex bank. A policy decision that is bound to affect the fate of the national currency should not be shrouded in mystery and technical jargon.

At a State House ceremony last Monday in Abuja, CBN governor, Godwin Emefiele, said 500 million eNaira ($1.21 million) has already been minted with the CBDC’s digital currency app and its merchant wallet now live and available for download. Despite initial hitches, the two apps, eNaira speed wallet and eNaira merchant wallet, are now available on Google playstore and Apple store. To sign-up on the eNaira speed wallet, according to a notice on its website, “you would be required to input the following details exactly as captured during your BVN enrolment.”

Explaining why he approved the payment system, President Muhammadu Buhari said the world in which we live today has made cash transactions less desirable while, according to him, “some estimates indicate that the adoption of CBDC and its underlying technology, called blockchain, can increase Nigeria’s GDP by US$29 billion over the next 10 years.” The CBDC, the president added, “can also help increase remittances, foster cross border trade, improve financial inclusion, make monetary policy more effective, and enable the government to send direct payments to citizens eligible for specific welfare programmes.”

Properly managed, enaira can indeed help to deepen financial inclusion by eliminating third party involvement and facilitating transactions between and among individuals, businesses, and government agencies in a seamless manner. For Tier 0 categories, daily transaction and balance speed wallet limits have been pegged at N20,000 and N120,000, respectively while daily transaction and balance speed wallet limits are N50,000 and N300,000, respectively for those classified under Tier 1. Daily transaction and balance speed wallet limits for customers in Tier 2 are N200,000 and N500,000, respectively for the last category of Tier 3 customers, daily transaction and balance speed wallet limits are N1,000,000 and N5,000,000, respectively. There are no limits for transactions by merchant customers.

Ordinarily, this idea of a digital currency is good. We subscribe to the argument that the COVID-19 pandemic has hastened the resurgence of a new digital economy and that Nigeria should not be left behind. But many also recall that the CBN had a few months ago banned cryptocurrency and legitimate questions are being asked, especially since nothing digital is ever foolproof.

Forward thinking which the idea of CBDC represents is the hallmark of the present age. But things should be done the right way. There should have been a robust public enlightenment on the new currency. Even the banks are all still in the dark as they are not able to provide any information to the public on the new currency. An electronic version of the national currency is by its chosen platform of limited applicability. But here we are after the launch stage of the eNaira there is no public enlightenment programme or any sensitivity to the meaning of the initiative to the generality of Nigerians.