Economy
Nigerians and other parties across the globe have, no doubt, demonstrated their overwhelming interest in the eNaira project with over 2.5 million daily visits to the website, according to the CBN. It is therefore imperative that this enthusiasm is sustained by ensuring that the system functions with minimal hiccups and transparency.
By Anthony Isibor.
THE launching of eNaira by President Muhammadu Buhari on Monday October 25, 2021 in Abuja has taken the Central Bank Digital Currency, CBDC, drive to a new level and it has also demonstrated that Nigerians have embraced digitization in the banking sector of the country’s economy.
Speaking at the official launch of the eNaira in Abuja on Monday, President Buhari said that the technology, called blockchain, could increase Nigeria’s GDP by $29 billion over the next 10 years. According to him, the introduction of eNaira will enable the government to send direct payments to citizens eligible for specific welfare programs as well as foster cross-border trade and assuring Nigerians of the safety, and stability of the system.
”Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of, and concerns of the economy.
”The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country.
”In recent times, the use of physical cash in conducting business and making payments has been on the decline. This trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new Digital Economy.
”Alongside these developments, businesses, households, and other economic agents have sought for new means of making payments in the new circumstances.
”The absence of a swift and effective solution to these requirements as well as fears that Central Banks’ actions sometimes lead to hyperinflation created the space for non-government entities to establish new forms of “private currencies” that seemed to have gained popularity and acceptance across the world, including here in Nigeria.
”In response to these developments, an overwhelming majority of Central Banks across the world have started to consider issuing digital currencies in order to cater for businesses and households seeking faster, safer, easier and cheaper means of payments.
”This payment system now provides high‐value and time‐critical payment services to financial institutions, and ultimately serves as the backbone for every electronic payment in Nigeria.
”They have also supported several private‐sector initiatives to improve the existing payments landscape, and in turn, have created some of the world’s leading payment service providers today,’’ he said.
In his speech, Godwin Emefiele, CBN governor explained that the eNaira is the same Naira with far more possibilities.
“The eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN. The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 eNaira,” he said.
Emefiele added that the CBN has given careful consideration to the entire payments and financial architecture and has designed the eNaira to complement and strengthen these ecosystems and has implemented secure safeguards and policies to maintain the integrity of the financial system.
According to Emefiele, since the eNaira platform went live, there has been overwhelming interest and encouraging response from Nigerians and other parties across the world with over 2.5 million daily visits to the website.
He added that 33 banks are fully integrated and live on the platform, 500 million has been successfully minted by the Bank, N200 million has been issued to financial institutions, over 2,000 customers have been onboarded and over 120 merchants have successfully registered on the eNaira platform”.
He explained that under this policy the CBN would advertise, screen, scrutinize and financially support 100 targeted private sector companies in 100 days, beginning from November 1, 2021, and rolling over every 100 days with new set of 100 companies, whose names will be published in National dailies for Nigerians to verify and confirm.
President Buhari has also said the recently launched eNaira will buoy and reposition the Nigerian economy to attract investors, adding that the Treasury Single Account, TSA, Bank Verification Number, BVN, and National Identification Number, NIN, initiatives have reinforced his administration’s efforts in tackling corruption.
Speaking at the fifth edition of Future Investment Initiative Summit in Riyadh, Saudi Arabia, Buhari stated that the “e-Naira, which puts us on track to become the first African country to introduce a Central Bank Digital Currency was launched on October 25th, 2021.
“We believe this and many other reforms, will help us increase the number of people participating in the banking sector, make for a more efficient financial sector and help us tackle illicit flow of funds. To further strengthen our anti-corruption drive, increase accountability and transparency, we have centralised government funds through a Treasury Single Account, and ensuring that all Nigerians with a bank account use a unique Bank Verification Number, BVN,” he said.
Since the launch of the eNaira, Nigerians have continued show interest in it and about 200,000 wallets had been downloaded within 24 hours of the launch of the digital currency. According to reports by THISDAY newspaper, in less than one day after the digital currency was launched by President Muhammadu Buhari 156,700 consumer wallets have so far been set up, while 23,650 merchant wallets have been opened, a reflection of the strong interest the innovation has continued to attract.
“It is expected that in the coming days, the amount would rise as the Central Bank of Nigeria (CBN) intensify awareness on the eNaira,” the reports said.
As part of the incentives on the eNaira, the CBN has said that all transactions conducted on the newly launched digital currency platform, eNaira will be free for 90 days. The apex bank said in its ‘eNaira circular and guidelines’ released on Monday that it would revert to its guide on applicable charges by banks and other financial and non-financial institutions at the end of the stated period.
The apex bank noted that Electronic Funds Transfer below N5,000 is charged N10; N5,001 – N50,000 is charged N25 and for above N50,000, a N50 charge is associated. The bank also said phone numbers without verified National Identification Number (Tier 0) would have a daily transaction limit of N20,000, while the maximum that the account could hold was N120,000. For phone numbers with verified NIN or Tier 1, the CBN noted that they have a daily transaction cap of N50,000 and a maximum balance of N300,000.
However, before the launching of eNaira project, Nigerians were used to patronizing the services that commercial banks provide, but due to the introduction of FinTech, there has been a radical shift towards digital banking,
One of the reasons given for this shift is the exorbitant cost of transacting business with commercial banks and the convenience that digital banking provides.
Today, some of the institutions that offer digital banking services include, Opay, Kuda bank, Vbank, Sparkle, AlatbyWema, Mint App, One bank, Rubies among others.
The number of downloads on the internet shows that millions of Nigerians are using their services.
For instance, Osazie Kelly, a fish farmer, who patronizes digital banking stated that the banks are quite helpful in managing my money and business. “They have various saving plans that enable me to manage my little money and keep track of my savings without charging me a dime.
“They even give me interests on the savings without charging me for transactions,’’ he added.
“I use Kuda, and they give me over 20 free transactions per month, says another user of these digital banks, and I don’t get unnecessary debit alerts,” he said.
They offer zero charges on transactions. Free account maintenance, offers up to 15% annual interest rate on savings, swift and secure transfers, withdrawals, and bill payments among others.
Oct. 29, 2021 @ 17:40 GMT |
A.I
Tags: digital banking Digital Currencies eNaira Godwin Emefiele President Muhammadu Buhari
