As the Central Bank of Nigeria sets to launch the E-Naira on October 1st, 2021, the question everyone is asking is; are we ready for this bold move? Nigeria will be the 1st SubSaharan African country to adopt the use of digital currency and there have been concerns about the technology and its adoption.
The Committee of E-Banking Industry Heads (Cebih) in its 3rd Quarter Industry Forum discussed the digital currency’s adoption with the theme “Digital Currency and the Prospects of Central Bank Digital Currency in Nigeria”, held in Abuja on Wednesday 22 September 2021. Varying concerns such as the technology, adoption, financial inclusion, the impact on forex, and the value of the CBDC were discussed.
Mrs. Rakiya Mohammed, Director, Information and Technology, CBN on the importance of its adoption said the introduction of the e-naira can catalyze Nigeria’s digital economy, boost cross-border trade and enable better macroeconomic policy formulation. She further emphasized macroeconomic policies will be better formulated due to digitization.
Speaking on the e-naira design, Muhammed disclosed that the design would soon be revealed as the apex bank has concluded its development. The e-naira, she noted, will be a legal tender like the fiat naira. It will not replace but complement the naira and anonymity of transactions is guaranteed.
Experts from the Blockchain industry present at the event expressed that this move may not deepen financial inclusion as hoped despite offering the advantage of cheaper and more efficient financial transactions. Chimezie Chuta, coordinator, blockchain Nigeria User Group stressed that the e-Naira will not solve the problem of financial inclusion in the country. Rather, the introduction of the digital currency will address the encroachment of private e-currencies but said the solution is weak as the e-naira does not address the key drivers of private e-currencies. Chuta however said the e-naira will save the huge cost on printing, management, and distribution of the naira.
On his part, the Chairman of CeBIH, Adeyemi Atanda lauded the CBN’s e-naira initiative. He explained that there must be an attraction for people to keep money in naira, but the e-naira has no attraction. He, however, said that can be compensated with the fact that transactions are done using e-naira come at near-zero cost, which can help the end-user save some money. He further said “When you hear e-naira, think transactional not investments. That is where a lot of people are mixing it up. You can’t compare it with crypto. Crypto is not primarily transactional, it is primarily investments. E-Naira is primarily transactional,” He assured Nigerians that the CBN and banking sector are well equipped to manage fraud and other cyber security challenges that can arise from the adoption of the e-naira. He said “We have been very innovative in trying to guard against fraud as much as possible. All of those gains we have learnt in digital banking for managing fraud, things like second factor or multi-factor authentication, encryption, and other innovations will still apply in this case.” A lot of the international speakers brought in also shared how they have adopted the digital currency and the consensus is that a lot is still evolving but the currency must go digital eventually.
A day before the event, Delegates from the CEBIH executive members led by Chairman Adeyemi Atanda visited the Ministry of Science, technology, and innovation to discuss how the committee can collaborate with the ministry in terms of Leveraging technology for financial inclusion, testing innovative inventions for financial services and capacity development. The team also paid a courtesy visit to the Deputy Governor Financial Systems Stability CBN, Mrs. Aishah N Ahmad and they also visited the National Information Technology Development Agency and was received by Kashifu Inuwa Abdullai CCIE, DG NiTDA
The Committee of e-Business Industry Heads (CeBIH) is constituted of the upper echelon of electronic business industry practitioners in all Banks in Nigeria with Adeyemi Atanda as chairman of CEBIH and Oluremi Tinolu- Gabriel as Vice Chairman.