Financial Inclusion: An Overview of e-Naira Prospects In 2022


The year, 2022 has been ushered in with overwhelming expectations for achieving socio-economic and political transformation.

In the process of steering the nation’s ship towards the realisation of these transformation targets, the role of financial system, in fact, payment channels for transactions cannot be overemphasised.

As expected, the Central Bank of Nigeria (CBN) led by Governor, Godwin Emefiele has a pivotal role, moreso, with last year’s launch of the Central Bank Digital Currency (CBDC), otherwise known as the eNaira.
The key issues at stake in actualising the eNaira objectives include financial stability, firming up the Naira, increasing financial inclusiveness, facilitating ease of payments and transactions, increasing cross-border trade, strengthening social interventions, strengthening Nigeria’s monetary policy, among others.

Therefore, the Prospects of eNaira this year and beyond is looking good if properly deployed by the apex bank as proposed. The advantages of the eNaira are enormous but its prospects will even be more enhanced when the CBN harnesses the expected increase in inflow of Dollar stimulated by the Foreign Direct Investments (FDI), diaspora remittances, increase in price of oil in international market which will ultimately lead to accretion in the nation’s foreign exchange reserves.

Another factor that promises to make the eNaira a more valuable and accepted mode of transaction include the fact that the CBN is testing to see if it can use the eNaira as a payment gateway. Once it is made a payment gateway, the acceptance of the eNaira becomes more global. For instance, one will prefer the use of eNaira wallet to make payments or transfer funds from person to person just as one uses other internet driven payment systems which facilitate crediting accounts of whoever one wants to make payment to with ease. If this is realised, eNaira becomes more acceptable even beyond the shores of Nigeria. The Director, Payments System Management Department of CBN, Musa Jimoh, affirmed this through Chai Gang while speaking at the 2021 Business Luncheon of the Chartered Institute of Taxation of Nigeria (CITN).

Apart from the above, another striking feature that will boost massive use of the eNaira wallet is the CBN’s intention of introducing Unstructured Supplementary Service Data (USSD). With the USSD, financial inclusiveness is expanded to the unbanked areas; communities with less or without internet connectivity and those without access to smart phones thereby enhancing their financial transactions and payments.

Currently, one of the limitations of the eNaira wallet is that one must have internet service before accessing the eNaira wallet account. In effect, when actualised, it is just as simple as inputting codes to execute transactions wherever one can receive or make calls in any part of the country.

The year 2022 holds lots of promises in many respects. The nation’s annual budget is a colossal sum of N17.126 trillion- the largest scale of annual appropriation in Nigeria. With this expenditure, money in circulation will further be boosted in the country as this year also is a pre-election year marked by high scale movement of funds for funding and massive mobilisation of Electorate’s and political campaigns activities.

Just as the government is expected to spend much this year going by the provisions of the budget and the budget deficit of N6.25 trillion, it becomes expedient to track expenditures, especially Value Added Tax (VAT) as well as income tax through the deployment of the nation’s digital currency, eNaira, to ensure financial prudence and accountability.

This aligns with the position of the CITN President, Adesina Adebayo, as he maintained that adoption of digital Naira would assist government to increase tax revenue since it will support agencies to monitor and track transactions either revenue or expenditure.

Ordinarily, pre-election periods are when there is free flow of money and when there is a lot of spending, it is one of the ways of boosting the economy. This is because, when you spend, you spend your way out of recession. If the Federal Government has budgeted so much that it intends to spend, the eNaira can become a very good tool in terms of ensuring facilitation and tracking of heavy transactions since the eNaira wallet is under the custody of the CBN.

The import of this is that with eNaira wallet, illicit financial transactions can easily be tracked and identified. The same goes with tracking of illicit funding of political office seekers and the identification of electoral expenses above the limit set by the Independent National Electoral Commission (INEC). This can easily be ascertained since such transactions will pass through the CBN, via of the eNaira wallet.

Going by the circular flow of income, government is the biggest spender. When government spends, it goes to households and stimulates the households into spending too. If the federal government has budgeted so much this year, this means that it is going to activate lots of transactions and spending by households. In this case, the eNaira wallet becomes a very good channel to enhance transactions between parties, individuals, and organisations.

Under the present circumstance, the most easily available choice of effecting payments is debit card, which attracts transaction costs from banks. But given the preparedness of CBN to effectively deploy the eNaira wallet, it is anticipated that it will become first choice of means of transaction since it attracts lower form of transaction costs.

If everything goes as planned, the Central Bank Digital Currency will, in no time, become a veritable seamless transaction tool just as it will be leveraged to track financial flows.

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