The Central Bank of Nigeria (CBN) believes its digital currency, the eNaira, has scored wins in the 10 months since it was launched last October.
The app has been downloaded 840,000 times, nearly a third of those converting to active wallets. 17,000 of those active wallets belong to merchants who have ostensibly used the currency to receive a payment. Transaction volume and value have been “remarkable” at 200,000 and 4.4 billion naira ($10 million) respectively, said Godwin Emefiele, the central bank governor, at a competition designed to increase use cases for the currency.
But, the news should be taken with a healthy dose of skepticism as at an average of 1.35 transactions per active wallet, the eNaira has not convinced its users to do a lot with it. At N22,000 ($52), the currency’s average transaction value is way behind the regular naira: in 2021, Nigeria’s financial sector processed electronic payments at an average of N720,000 ($1,700) per transaction.
The central bank’s announcement suggests it has made some progress in promoting the eNaira given a tortured first week in which the app was temporarily deleted from Google’s app store. Still, public reception remains muted as the eNaira continues its struggle for relevance with most Nigerians.
It is still a long, bumpy road to theoretically adding $29 billion to Nigeria’s GDP over the next 10 years, as President Muhammadu Buhari expects the eNaira to do.
The eNaira experiment may have been motivated by a need to dissuade popular cryptocurrency adoption in the country, but the CBN has framed it as an opportunity to include more “underserved and unbanked” people in the financial services sector.
Until now, the eNaira has been in the first phase of its rollout targeted at Nigerians with bank accounts. The next phase will focus on the unbanked who can sign up to use eNaira by dialing a USSD code, Emefiele said. This will allow those who don’t have smartphones to still use the service.
Whether that will make the e-currency stickier remains to be seen, as Nigeria’s experiment so far with a central bank digital currency provides a guide for other African countries considering similar digital currency initiatives.