How to deepen acceptability, reliability of e-Naira among Nigerians 

AS concerned authorities continue to shed light on the e-naira project to foster its acceptability among the masses, the level of digital infrastructure, network reliability, low Internet penetration and sundry underlying problems that may constitute serious challenges to its sustainability are highlighted in this report by ADEYEMI ADEPETUN and HELEN OJI.

Beyond the pomp and pageantry that heralded the launch of the e-naira, emerging facts seem to suggest that the task before promoters of the initiative appears quite huge. The e-naira is a Central Bank of Nigeria-issued digital currency, which provides a unique form of money denominated in naira. It also serves as a medium of exchange as well as a store of value, while offering better payment prospects in retail transactions in comparison with cash payments. 
   
e-Naira is the first of its kind in Africa. According to the Atlantic Council Central Bank Digital Currency (CBDC) tracker, e-naira debut made Nigeria one of the five countries in the world that have their CBDC as the popularity of digital and cryptocurrencies continue to soar despite clampdowns in several countries.
   
e-Naira comes in two versions – one for individuals (speed wallet) and the other for merchants (merchant wallet). At the launch, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said that e-naira will make a significant positive difference in Nigeria and among Nigerians, including supporting a resilient-payment ecosystem, encouraging rapid financial inclusion, reducing the cost of processing cash, enabling direct and transparent welfare interventions for citizens, increasing revenue and tax collection, facilitating diaspora remittances into the country, reducing the cost of financial transactions and improving the efficiency of payment in Nigeria.
   
However, barely 48 hours after its formal existence, the app suffered an attack and was displaced from the Google Play Store. Even though it has since been restored, the glitch showed that beyond the rhetoric, more work still needs to be done to perfect its reliability and acceptability among the Nigerian populace.
  
But in explaining the brief displacement of the app, CBN said it was taken down to carry out an important upgrade. It, however, blamed Nigerians for the sudden disappearance of the app adding that many people failed to enter their details correctly in an attempt to download the app leading to the glitch.
    
Interestingly, the e-naira speed wallet applications recorded over 100, 000 downloads from the Google Store within 24 hours of its launch.
   
Be that as it may, several challenges lie ahead of e-naira. One of the topmost being its acceptability among the middle and low class in the society; its ability to bridge the financial inclusion gap in the country, and contributes significantly to Nigeria’s digitisation agenda.

e-Naira And Financial Inclusion Gap 
TODAY, so many Nigerians are still excluded, not only financially, but also from basic telecoms services. For instance, the Nigerian Communications Commission (NCC) revealed recently that there are 114 access gaps in the country, with some 25 million Nigerians still lacking access to basic telephone services.
   
Already, the e-naira has been touted as elitist, meaning that it could be a hard sell to artisans including, hairdressers, mechanics, bus drivers/conductors, as well as market women and farmers in some of the remotest parts of the country, who might not find the new technology attractive.
    
Besides, the e-naira technology can only ride on the smartphone technology because it requires downloads, which feature phones cannot deliver.

More Digital Infrastructure Needed 
TO date, network penetration is still largely 2G and 3G dependent. But there have been massive investments in 4G, even as the country prepares to commercially launch 5G by January 2022. However, on 2G, 3G and even 4G, there are several complaints around the quality of service offered by operators. This challenge is seen as a major limitation that could hinder the success of e-naira.
   
Besides, with the majority of Nigerians still battling with low per capita income as a result of the slow-paced recovery of the economy, the purchase of smartphones might be jettisoned for more pressing needs.
   
Already, a report by Alliance for Affordable Internet (A4AI) revealed that even though smartphones provide access to life-saving information, enable students to continue their studies online, and foster social connection, they remain unattainable for many around the world due to soaring costs.
  
With a study of 187 countries, A4AI found that the global average cost of a smartphone is around 26 per cent of an average monthly income, which is $104. However, there are significant divisions in affordability between regions and countries that smartphone remain inaccessible to many.
  
Specifically, A4AI, which is a global coalition working to drive down the cost of Internet access in low- and middle-income countries of the world, said in countries like Nigeria, South Africa, Kenya, the people pay 45 per cent of their monthly income to purchase a smartphone. The 45 per cent is a result of devaluation and inflation witnessed in the economies. Further, so many people are not yet aware of the e-naira initiative, especially among the artisans and others. 
  
Speaking with The Guardian, the Nigerian Coordinator, A4AI, Olusola Teniola, said among other things, the Federal Government would require further investments in educating the masses, an increase in the adoption of smartphone devices, improvement in digital literacy and massive digital infrastructure deployment to fill the dark spots where millions of Nigerians are unable to afford access to the Internet or have no power to charge their mobile devices and require financial stimulus to be able to support themselves and to fund the usage of these e-wallets, whether by data or by USSD charges that will be applied when they are being used to send money or to make payments.

Is Nigeria In A Hurry?
WITH the launch of the e-naira by President Muhammdu Buhari, Nigeria joined Bahamas, Sweden, Cambodia and South Korea as nations that are now on the global CBDC tracking map. Some analysts opine that the country might have joined the league of countries that are introducing e-currencies too early going by the challenges at hand and the huge financial inclusion gap.
    
But the Founder of Atmosphere, a Fintech company, Wande Adalemo, believes that the country should not play second fiddle or be a latecomer. He pointed out that when digital currencies failed when they were first introduced in the USA in the 1980s, “but the very strong legacy system in the country gave a fillip to electronic transactions.”
   
Adalemo, who explained that advanced countries have been able to integrate cryptocurrencies into their system, further pointed out that digital currencies have gone through several evolutionary processes, and these advanced countries have perfected the system by learning from their past mistakes. 
   
He said in Nigeria’s case, the system has not been built to that level yet, but the country is gradually making efforts to put things in proper perspective.
  
Adalemo expressed the belief that Nigeria has been able to manage the matter of cryptocurrency well, stressing that the youths are a vast majority of the population and are found in the digital realm and the bitcoin community, “so we expect a synergy that will boost the electronic payment system.”

Banks Want e-Naira To Be Well Appropriated
THE Vice President, Highcap Securities, David Adonri, said the benefits of e-naira outweigh the risks generally. He said the introduction of the scheme would go a long way in filling the gap created by the non-recognition of privately issued cryptocurrency by the government.
   
Aside from this, he also pointed out that it could facilitate domestic and external trade by breaking down the exchange barrier.
   
Furthermore, Adonri added that it would increase the speed and efficiency of payments, while also reducing the cost of transactions
   
However, on the downside, Adonri said that banks would face stiffer competition with regulators because deposit money banks have been in the business of electronic transactions that attract charges. He said the development was capable of eroding the intermediating income of banks if they are not allowed to share from the e-naira charges, just as he underscored that appropriation of the fees will become clearer when the fee-charging regime of the CBN begins.
   
“If no sharing takes place, banks may lose intermediation income. Banks are the onboarding agents, perhaps they may have a share in the fees,” he stated. He said another downside of the initiative is that being a vehicle operated based on foreign technology, the product can be manipulated by technology providers.
   
Adonri explained: “If the CBN creates e-naira recklessly like the regular currency, it can increase inflation. The participation of the populace in the programme will take time to gather momentum. A lot more sensitisation and enlightenment will be needed to achieve this, but the programme will still be elitist due to low Internet penetration,” he said.
   
An independent investor, Amaechi Egbo, said a lot of education still needs to be done to convince the banking public of the advantages of transacting in the digital currency, especially the fact that despite what has been done with mobile and Internet banking, there is still a high level of resistance from Nigerians when it comes to using any form of an electronic system for banking.

CBN Assures Of e-Naira’s Reliability
IN assuring of the dependability and reliability of the e-naira project, the CBN’s Director of Corporate Communications, Osita Nwanisobi, while speaking at the ongoing CBN-Fair in Abakaliki, Ebonyi State, explained that the security and dependability of the e-naira stems from the fact that it uses cryptographic technologies encrypted with two factors for authentication.