The Central Bank of Nigeria launched the eNaira central bank digital currency (CBDC) pilot in October 2021. Despite being a pilot, it is fully open to the public, although it was only available to bank account holders initially. According to the Nigerian BusinessDay, only 80 merchants are currently active, citing a lack of demand. The newspaper says the figures came from a central bank chart.
While there have been 764,000 eNaira app downloads, almost half have never used the app. The central bank has onboarded less than a third of the downloaded figure, and 168,300 of the accounts are active. However, just 18,460 have funded wallets, including the 80 merchants. The newspaper reported that merchants say they rarely get requests to use the app. We contacted the central bank to confirm the figures but didn’t receive a response in time for publication.
Nigeria has a large population of 211 million, with 70% of that figure under the age of 30. However, a significant proportion is minors. More than 110 million citizens have bank accounts.
Motivations for launching the eNaira were financial inclusion, remittances, and making the largely informal economy more transparent and taxable. That latter point might not encourage broad adoption. It’s also a motivation previously cited by India, which plans to launch a CBDC within the year.
Stepping back, the eNaira pilot hasn’t yet fully exploited the first two goals. Independent of the CBDC, the central bank has targeted creating 500,000 agent payment outlets to serve rural communities. These could be used for the eNaira and would be critical to financial inclusion.
Regarding remittances, the issue is how to integrate a CBDC, given there are few others around the world. Business Daily reported that the central bank is engaging with SWIFT, which is building an interoperability network for CBDC. SWIFT is not purely looking at connecting with other CBDCs but also with conventional payment systems. So, in theory, the eNaira could be sent via a SWIFT gateway and from there onwards using more conventional payment systems.
Several countries are exploring multi-CBDC, but the focus is on the interbank side of payments. Two of the larger projects are the M-CBDC Bridge (MBridge) project out of Hong Kong and Project Dunbar runs out of the Singapore branch of the BIS Innovation Hub. Both have four central banks involved, but there are several other projects.