Buhari Administration’s eNaira Struggles After Three Years Of Launch

Buhari Administration’s eNaira Struggles After Three Years Of Launch

As central banks around the globe intensify their efforts to implement digital currencies aimed at modernizing financial systems and enhancing payment efficiency, Nigeria’s Central Bank Digital Currency (CBDC), the eNaira, launched under former President Muhammadu Buhari in October 2021, has not achieved the desired impact….READ MORE….

The eNaira, which is pegged to the Nigerian naira, was designed to promote financial inclusion by integrating unbanked populations into the financial system. The Central Bank of Nigeria (CBN) touted several advantages of the digital currency, such as reducing the costs associated with printing physical money, creating a swift payment system, bolstering the digital economy, facilitating cross-border transactions, and improving economic activities.

Targeted as a centralized alternative to cryptocurrencies—which are often viewed as volatile and anonymous—the eNaira was intended to allow the CBN to monitor transactions and regulate the purchasing power of users. Following its launch, the eNaira app experienced significant initial interest, registering over 589,000 downloads across iOS and Android platforms by November 2021. However, despite averaging 20,000 downloads per day and processing more than 35,000 transactions by January 2022, adoption rates have been disappointing.

An International Monetary Fund (IMF) report from July 2023 indicated that only 0.5% of Nigerians had embraced the eNaira, with an overwhelming 98.5% of wallets remaining inactive a year after its introduction. As of May 2024, the number of eNaira wallets had risen to 13 million, yet most of these wallets remained dormant, with total transactions amounting to 854,512 and valued at N29.3 billion.

Critics have highlighted several reasons for the sluggish adoption of the eNaira, including its initial restriction to bank account holders and domestic transactions. Users on social media have mocked the initiative, coining phrases such as “E-vanish” and “E-Dead,” indicating a lack of momentum for the digital currency.

The eNaira app was recently removed from the Google Play Store, although it remains available on the Apple Store, and the USSD code (*997#) meant to facilitate transactions for users without smartphones remains non-functional. Furthermore, the eNaira’s social media accounts have been largely inactive since August 2023.

Observers have pointed out that the CBN has not effectively communicated the unique advantages of the eNaira compared to traditional banking apps. Users like development journalist Mayowa Tijani and blockchain expert Solomon Amunde have noted the unclear value proposition and the absence of practical use cases as major hurdles limiting its adoption.

To stimulate greater use of the eNaira, Amunde has proposed that the federal government mandate its use for National Youth Service Corps (NYSC) members, civil servants, and government payments. He suggested that payments for services like driver’s licenses and passports should also include the eNaira as a payment option to increase its integration into everyday transactions.