ENaira: Nigeria Becomes First African Nation to Launch Digital Currency

World News

By Alyssa Wilson Published: October 27, 2021

ENaira: Nigeria Becomes First African Nation to Launch Digital Currency

In this photo released by the Nigeria State House, Nigerian President Muhammadu Buhari, Left, and Central Bank governor Godwin Emefiele, during the launch of a digital currency in Abuja, Nigeria Monday, Oct. 25, 2021. Nigeria has launched a digital currency which the Central Bank of Nigeria (CBN) says is a "major step forward in the evolution of money" in Africa's most populous country. Nigeria's President Muhammadu Buhari said at the launch Monday that the digital currency and the blockchain technology it uses can foster economic growth and increase the GDP of Africa's biggest economy by US$29 billion over the next 10 years. (Sunday Aghaeze/Nigeria State House via AP)

In Summary

Nigeria is now the first African nation to launch its own digital currency and it's expected to help increase their economy by billions.

On Monday, Nigeria became the first African country to launch a digital currency called eNaira.

According to Reuters, the nation’s leaders said eNaira will expand access to banking and help grow the country’s economy. Nigeria, Africa’s wealthiest and most populous nation, now joins the Bahamas and China in the digital currency landscape.

Despite the interest, experts have questions about the possibility of success over consistency with the rules set by the Central Bank of Nigeria. Godwin Emefiele, the governor of the Central Bank, said there has been “overwhelming interest” to eNaira, with 33 banks, 2,000 customers and 120 merchants registering to use the platform through the app.

Naira is the country’s money system and nearly ₦200 million worth of it has been issued to financial institutions. The nation’s president, Muhammadu Buhari, said the currency could potentially grow the economy by $29 billion over the next ten years and enable the government to make direct welfare payments.

While young digitally-savvy Nigerians have adopted to the currency, concern grows for those who may not be good with technology. “It’s not clear looking at the CBN’s body of work that Nigerians would be comfortable using this,” said Ikemesit Effiong, the head of research at consulting agency SBM Intelligence. “There are more questions than answers, even though we are looking at the launch of this digital currency. The fact that this is the case so late in the game is concerning.”

Efosa Ojomo, the director for the Clayton Christensen Institute for Disruptive Innovation, hopes this will help get people out of poverty. According to 2020 data from the Nigerian National Bureau of Statistics, 40% of Nigerians live in poverty and the number of those who are poor is expected to grow from 83 million to 90 million by 2022.

Ojomo joined BNC hosts Kelly Wright and Nayyera Haq to discuss eNaira on The World Tonight. He said poverty always shows itself as a resource problem, but resources have not always helped because it does not eradicate poverty.