One year into Nigeria’s adoption of the eNaira

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  • The eNaira has been crippled by low adoption, poor utility and the problems of the fiat Naira
  • The CBDC was launched under the slogan “same Naira, more possibilities
  • Only 0.5% of Nigerians have confessed to using the eNaira

On the 25th of October 2021, Nigerian President Muhammadu Buhari launched Nigerian Central Bank Digital Currency, the eNaira, under the slogan “same Naira, more possibilities“. After a year in circulation, it would seem at least the first half of the slogan was right, as the digital currency has struggled with adoption in the West African state. However, citizens seem to be adopting Bitcoin and other cryptocurrencies rapidly.

Nigerians take to cryptocurrency

Like many other African countries, Nigeria sucked in the cryptocurrency wave rather quickly. Citizens rushed to get their feet wet in the new waters of digital currency through cryptocurrency. This flirtation came crashing down when the Central Bank of Nigeria ordered Banks to close operating accounts of cryptocurrency service providers with the support of Nigeria’s Securities Exchange Commission and the International Monetary Fund (IMF).

Nigeria’s hardline stance on cryptocurrency

The Government’s answer to the quick adoption rate was to launch a digital version of the country’s troubled currency, the eNaira. It would seem the idea was to offer Nigerians a “safe” digital currency to quench their thirst for web 3.0 technology. Hence, the slogan “same Naira, more possibilities” captured more than just the idea that the eNaira was fungible with the fiat Naira. It was perhaps the earliest sign that the digital currency would struggle.

Some view the eNaira as the authorities in Nigeria’s attempt to play “bad cop, good cop”, firstly by taking away easy access to cryptocurrencies and then offering a digital currency that Nigerians were free to use. After over a year in circulation, there has been very little good news for Africa’s first Central Bank Digital Currency.

The government of Nigeria also aimed to use the eNaira to improve financial inclusion for traditionally unbanked Nigerians. According to other digital currency adopters, this was not only a reasonable goal but a noble one. El Salvador, the first country to adopt Bitcoin as legal tender, recorded an impressive improvement in access to financial payments infrastructure.

Low adoption of Nigerian Central Bank Digital Currency

The eNaira has been crippled by low adoption, poor utility and the problems of the fiat Naira leading to overall staggering low adoption rates but also very poor confidence in the digital currency foray.

Only 0.5% of Nigerians say they use the eNaira

Surveys suggest that only 1 in 200 Nigerians use the eNaira. That is staggeringly low by many, if not all, standards. Even more so, Nigerians still welcome other cryptocurrencies. In fact, Bitcoin and other cryptocurrency adoption have increased in the country since February 2021 upon the crypto ban and the October 2021 introduction of the eNaira.

According to Nairametrics, Nigerian peer-to-peer Bitcoin transactions for the 2nd quarter of 2022 totalled US$34.4 million. However, Nigeria’s Q2 total is more than the remainder of the top 5 African countries combined (South Africa, US$15.2 million, Kenya, US$7.8 million, Ghana, US$ 640 000 and Tanzania, US$600 000). This is happening when all while facing an effective cryptocurrency ban.

eNaira provides poor utility

There’s a rule of thumb in the tech startup arena commonly referred to as the 10X (or 10 times) rule. Simply put, the 10X rule states that your solution, as a business, should improve upon the current solution 10 times or more to succeed. Well, this is a test the eNaira has had great difficulty passing. The eNaira offers Nigerians no additional benefits.

Nigeria’s internet penetration rate for 2022 is 38.73%, and the country is not expected to surpass the 50% mark in the next 5 years, according to The cost of internet access in Nigeria also ranks very high. You would need the internet to use the eNaira, so that goes some way to explaining the low utility.

Same Naira but with another name

The fiat Naira doesn’t exactly have a history of being a darling currency. The currency has consistently and continuously lost value year on year against major currencies, particularly the US dollar. The allure to many cryptocurrencies like Bitcoin is its inflation-proof status, something the fiat Naira has not been.

Unfortunately, packaging the Naira as a Central Bank Digital Currency has not done away with the problems of the currency. This is precisely the reason place little trust in digital currency. So it really is the same Naira, and not sure about the “more possibilities”.

CBN shot themself in the foot over cryptocurrency

To the average user, the difference between a cryptocurrency, digital currency and a CBDC is academic at best and largely non-existent. CBN’s hardline stance on cryptocurrency may have unwittingly caused some of the trouble that the eNaira has to contend with.

Like many African countries, Nigeria has a large private sector transport economy using motorised tricycles known as Keke. It is common knowledge that adoption by this large sector of anything bodes well for its overall chances of success. However, the sector has been cautious about accepting the eNaira, citing the hardline taken on digital currencies (cryptocurrencies, to be exact).

Poor rollout of the Central Bank Digital Currency

The rollout of the eNaira CBDC also bears some questioning. From some vantage points, the rollout of the eNaira was very much a case of “put it out there and find a use for it later”. This has left the digital currency languishing. While the eNaira wallet is accessible via Android and iOS apps, the aforementioned internet factors come into play.

The eNaira application achieved 840 000 downloads by August 2022. Business day Nigeria reported that there were 270 000 active wallets split between 252 000 consumer wallets and a worrying 17 000 merchant wallets. This is Africa’s most populous nation, with an estimated 2021 population of 211.4 million citizens. This places the adoption of the eNaira at around 0.12%

Without the buy-in of banks and industry as a whole, it is hard to see a turnaround for the fortunes of the eNaira. Suggestions such as paying part of civil service salaries in eNaira seem just as ill-fated as plans to preserve the value of the fiat Naira by blocking the transfer of funds outside the country.  Perhaps the lesson from the eNaira as a CBDC for other countries watching is that citizens may not want the same currency, even with more possibilities.



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Kudzai G Changunda
Kudzai G Changunda
Finance guy with a considerable interest in the adoption of web 3.0 technologies in the financial landscape. Both technology and regulation focused but, of course, people first.
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