The problem of unnecessarily lengthy payment procedures is not a new phenomenon in Nigeria. While a lot of Nigerian fintechs are solving this problem in varying degrees, the Central Bank of Nigeria (CBN) has decided to contribute towards addressing this problem with the launch of the eNaira. eNaira is a CBN-issued digital currency, governed by a centralized blockchain, that operates through digital wallets and facilitates secure peer- to – peer transactions among users. Similar to the existing Naira notes, the eNaira operates as a legal tender and serves as both a store of value and a medium of exchange.
Sequel to its launch, it was met with mixed reactions from users predominantly based on the fact that most of the problems it aims to solve are already being solved in various ways by innovative fintechs in the country and continent. For example, similar to MPesa, the eNaira is designed in such a way that it can be used on phones that are not internet enabled.
The original premise was to increase the GDP of Nigeria’s economy by $29 Billion over the next 10 years. This represents a modest 7% growth on our current GDP – $432 Billion. Furthermore, it seeks to facilitate remittances at cheap rates and reduces the time involved in the process. Financial inclusion is also at the crux of its value proposition, with its target on the 36% of Nigerian adults or 38 million individuals with limited or no access to financial resources or internet, for that matter. Hence, the non-internet-connection functionality built into the app to drive adoption in rural areas.
By operating on a centralized blockchain technology, the eNaira allows the authorities to track and trace activities and thus, detect illicit activities facilitated by the eNaira. This has formed a base of contention among many users and citizens alike, hinging on privacy breach concerns.
Going by its aphorism, ‘Same Naira. More possibilities’, it is definitely a step in the right direction and we can only hope that there are more plans in place to broaden the service offerings provided by the eNaira.
Geek 