E-naira
Buhari and Emefiele hold e-naira logo during the unveiling on Monday, Oct 25, 2021

BY EMEKA EJERE

Despite massive interest in the eNaira initiative in which over 100,000 wallets were downloaded in 24 hours, the first week of the process saw frustrations among Nigerians, with some wondering why thorough investigation was not carried out before the launch.

Nigeria’s Central Bank Digital Currency (CBDC), had gone live on Monday (October 25) after it was launched by President MuhammaduBuhari at the State House in Abuja. An earlier plan to unveil the digital currency on October 1 was shelved.

Buhari had insisted that close monitoring and supervision will be necessary in the early stages, adding that it would be necessary to also study the effects of the eNaira on the economy as a whole.

The President believes that the adoption of CBDC and its underlying technology, called block chain, could increase Nigeria’s GDP by $29 billion over the next 10 years.

The eNaira was developed by fintech company, Bitt, which is also behind the creation of CBDC in some East Caribbean countries. The governor of Central Bank of Nigeria (CBN), Godwin Emefiele, said 500 million eNaira has already been minted, adding that 33 banks have been fully integrated and are live on the platform.

The digital currency is supposed to live within a mobile wallet, have the same value and be interchangeable with the physical Naira for everyday transactions. It is believed that the eNaira, which is governed by a centralized blockchain, is part of the apex bank’s drive to discourage cryptocurrencies’ popularity among Nigeria’s youth, just like China’s effort with the digital yuan.

Error messages too many

This week, the CBN made two types of eNaira wallets available on Google and Apple stores: one for individuals and another for merchants. But some users say parts of the wallet for individuals have not worked properly.

A breakdown of the figures obtained by a major news platform via the Google Playstore app on Wednesday (October 28) showed that days after the digital currency was launched, over 100,000 downloads were recorded with 156,700 consumer wallets set up, while 23,659 merchant wallets have been opened, a reflection of the strong interest the innovation has continued to attract.

However, with over 2,596 app reviews, the app has an assigned rating of just 1.8 stars for Android users and 2.9 stars with 81 rating on the Apple Store

A user, Colorado Akpan, stated that the interface is okay but the error messages were too much. In response, the CBN said, “Good day Akpan, Please note that the system will unlock you after 30 minutes. We apologise for the difficulties you experienced while registering with us. If you would like some assistance or additional information, please contact us and we will be happy to help you further.”

Similarly, FisayoFosudo, a Nigerian YouTuber who reviews gadgets and apps, said he and three friends initially got error messages that the eNaira app could not match their emails to their Bank Verification Numbers (BVN).

He later registered successfully but found broken links that did not lead to helpful support pages on the CBN’s website. “Was really looking forward to reviewing the eNaira app but it’s been hard to get it to work seamlessly. We wait,” Fosudo said.

After many users left poor reviews for the eNaira Speed Wallet app, it was taken down on Wednesday after it had been downloaded 100,000 times. The app, however, returned to Google Store 24 hours after its sudden disappearance.

The CBN Director of Corporate Communications, OsitaNwanisobi, had said the app went missing because of an upgrade. “There is an upgrade going on at the moment by Google; try in the next few hours.” he had said.

However, a mobile developer told our correspondent that the app could have gone missing from the store for a number of reasons. According to the developer, it could also be because the app had flouted one of Google’s policies or because the developers took it down.

The CBN has also published regulatory guidelines of the currency on its website. “The guideline seeks to provide simplicity in the operation of eNaira, encourage general acceptability and use, promote low cost of transactions, drive financial inclusion while minimising inherent risks of disintermediation of any negative impact on the financial system.”

The apex bank also said all transactions conducted on the platform would be free for the next 90 days. It, however, stated that it would revert to its guide on applicable charges by banks and other financial institutions at the end of the stated period.

The CBN stated 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 (NIN) will have a daily transaction limit of N20,000, while the maximum that the account can hold is N120,000. For phone numbers with verified NIN, CBN said they have a daily transaction cap of N50,000 and a maximum balance of N300,000.

Emefiele said the CBN “will continue to refine, fine-tune and upgrade the eNaira”, assuring that “Nigerians should expect to see additional functionalities in the coming months.”

Some of the additional functionalities include: accessibility and onboarding of customers without BVN and the use of eNaira on a phone without Internet to further drive financial inclusion, making Nigeria one of the first countries in the world to deploy the CBDC via USSD on phones without relying on internet connectivity.

Another feature that will be deployed by the eNaira is the “onboarding of revenue collection agencies to increase and simplify collections and the creation of sector-specific tokens to support the Federal Government’s social programmes and distribution of targeted welfare schemes in a bid to lift millions out of poverty by 2025.”

Pre-empting eNaira scams

CBDCs are not immune to scams. Last October, Chinese authorities started seeing fake digital yuan wallets, especially because the government had chosen to give away $6.2 million worth of digital yuan for free to citizens to encourage adoption.

Nigeria’s eNaira may be struggling to take off but the CBN is already warning of potential scams. In a press release on October 27, the bank clarified that it did not have a dedicated eNaira account, and that it was not distributing N50 billion in eNaira.

Speaking on the eNaira, an economist and CEO, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, saideNaira is consistent with current digitalisaton trend across all sectors globally, “but it is still not clear what the value proposition of the eNaira is, beyond the psychological satisfaction of joining the league of countries with digital currencies.

“Digital applications typically come with efficiency, cost effectiveness, smartness in usage and convenience. Perhaps, it is still early days. It may be necessary to allow the scenario to fully unfold.

“However, the first major worry is the issue of security and vulnerability to cybercrimes. The second is the pace of adoption having regards to the level of literacy and the huge informal economy.

“The truth is that as a country, we have witnessed amazing transformation in the payment system space. The use of electronic payments, use of POS, ATM machines, mobile money transfers, debit and credit cards have gained tremendous traction and confidence among citizens. Transactions on these platforms are already in trillions of naira, and still counting. It remains to be seen what additional value the eNaira will bring.”

Secure and dependable

However, speaking at the just concluded CBN-Fair in Abakaliki on Thursday Nwanisobi, stated that the e-Naira project is secure and dependable.

According to him, the security and dependability of the e-Naira stem from the fact that it uses cryptographic technologies encrypted with two factors for authentication.

The CBN spokesperson, however, acknowledged that the new digital financial project might pose some challenges to Nigerians in the short term because it works with Bank Verification Numbers.

Nwanisobi said, “The issue of security and dependability of the e-Naira platform is guaranteed. It is guaranteed because the technology uses cryptographic encrypted two factors of authentication. And so, the issue of whether the platform is secured is taken, as it is secured.

“The e-Naira project is a journey; we expect that there are going to be minor challenges in the short-term and I can tell you where some of these things are coming from. The e-Naira platform works with BVN and if I ask some people if they have email addresses, they would tell me they do not have.”

The eNaira is expected to complement traditional Naira as a less costly, more efficient, generally acceptable, safe and trusted means of payment. In addition, the CBN said in its guide that it will improve monetary policy effectiveness, enhance government’s capacity to deploy targeted social interventions and boost remittances through formal channels.

There is also the elimination of third party in transactions which could reduce time and cost of transactions. There is also the ease with which it would complement inclusion of excluded people in the financial system.