More Africa NewsNigeria’s Central Bank targets high-volume markets to prop up eNaira

October 27, 2022by myles0

Only 1 million or 0.5% of Nigeria’s population, which the World Bank puts at about 200 million, use its Central Bank Digital Currency, the eNaira, according to new data from the country’s Central Bank of Nigeria (CBN).

This has prompted the CBN to target industries that have widespread reach and significant user volume, such as transport.

According to a Bloomberg report, the finance regulator is now offering motorised rickshaw drivers and their passengers a 5% discount when they use eNaira as payment method.

The finance regulator added that it will introduce new enhanced features to boost the numbers.

Slow adoption

Despite the CBN having introduced Africa’s first CBDC in 2021, new data from the financial regulator shows slow adoption of the eNaira.

This comes at a time Nigeria is battling currency weakness, high inflation and a shortage of foreign exchange that is encouraging citizens to switch to other cryptocurrencies such as Stablecoins whose value tracks physical assets such as US Dollar and gold.

Speaking at an event to mark a year since eNaira was launched, Governor of the CBN Godwin Emefiele, said, “On-boarded customers are now near the 1 million mark, with over 3,305 merchants successfully registered on the eNaira platform across the country.”

Although public uptake of the eNaira remains low, as many as 33 banks in Nigeria “are fully integrated and live on the eNaira” platform.

According to Emefiele, about N8bn has been transacted through eNaira since its inception a year ago.

While Nigeria’s Fintech-rich market has shied away from eNaira, alternatives like Bitcoin have gained traction in the market.

Speaking to ITWeb Africa on condition of anonymity, an bank employee in Lagos said: “This shows that the market wants bitcoin and other cryptos. The market is simply rejecting the eNaira and the government should get the message and allow banks to trade and process Bitcoin.”

The CBN does not allow banks to process cyptocurrency transactions. This has forced cryptocurrency trades to go underground and enabled peer-to-peer cyptocurrency trade platforms – such as Localbitcoins, to garner popularity.

Nigerians are using digital currencies to circumvent CBN’s restrictions on foreign currency.

Bloomberg quoted Lagos-based Renaissance Capital director, Adesoji Solanke: “The eNaira does not address any of these basic use cases, so no surprise at its low adoption rates so far.”

Source: IT Web Africa

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