From Uche Usim, Abuja
Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele on Tuesday listed impairments stacked against widening the digital economic space that should be demolished to deepen the global competitiveness of the country.
Speaking at the 2022 Executive Policy Seminar of the CBN themed: “Digitalisation of Money and Monetary Policy in Nigeria”, Emefiele, who was represented by the Deputy Governor, Financial Systems Stability (FSS), Mrs Aisha Ahmad, noted that the existence of low level formal financial services, low income and financial illiteracy, underdeveloped technology ecosystem and weak infrastructure, continue to limit the potential for integration of digital financial services in Nigeria.
While acknowledging the success recorded so far in the digital transformation journey of the financial sector and economy in general, he reckoned that there was still much work to be done. He said: “Although considerable gains have been achieved in boosting financial inclusion in Nigeria, at 64.0 per cent, the inclusion rate slows down the digital transformation wheel, as all citizens must be carried along to optimize the gains of a digital economy”.
Emefiele stated that the major turning point in the Bank’s digitisation journey in the last decade, was the launch, on 25 October, 2021, of the eNaira, Nigeria’s central bank digital currency (CBDC).
“The eNaira was developed to broaden the payment possibilities of Nigerians, foster digital financial inclusion, with potential for fast-tracking intergovernmental and social transfers, capital flow and remittances, among other endless possibilities.
“Since its launch, a total of N8 billion, consisting over 700,000 transactions, has passed through the eNaira platform. As part of the Bank’s effort to further integrate and broaden the usage of the eNaira, it was assigned an Unstructured Supplementary Service Data (USSD) code, enabling payments by simply dialling ‘*997#’ on a mobile phone”.
He noted that the digitisation of money has been aided by a myriad of factors, including internet penetration; cloud computing; big data analytics; advancements in artificial intelligence; and emergence of distributed ledger technology (DLT); among others.
“In addition to the afore-mentioned drivers, the COVID-19 pandemic also accelerated the shift to digital payments, beyond the obvious advantages of a digitally driven payment system, leading to greater economies of scale and scope, network externalities, and low marginal costs”, he stated.
In his remarks, Dr Kingsley Obiora, Deputy Governor, Economic Policy, CBN, disclosed that the eNaira has recorded several milestones.
“927,000 total downloads; 317,560 activated consumer wallets; 33 banks are fully integrated and live on the platform; N3.0 billion has been successfully minted by the Bank; N2.10 billion has been issued to financial institutions; Over 3,320 merchants have successfully registered on the eNaira platform across the country including Shoprite, Sahad Stores, A.A. Rano, among others;
“Over 700,000 transactions amounting to about ₦8.0 billion have been recorded on the platform; and there are over 2.5 million daily visits to the eNaira website.
“The Bank is primed to reach lofty heights in the adoption and integration of its digital currency in collaboration with the Federal Government and other relevant stakeholders as we continue to unlock new phases and possibilities in facilitating a reduction in cash processing costs and an efficient payment ecosystem in Nigeria. However, the banking and financial systems are still grappling with some challenges, such as the depth of financial inclusion, which according to Enhancing Financial Innovation & Access (EFInA), 17 million adults are not currently making electronic payments but own phones and are interested in mobile money. Another 22 million adults are not currently making electronic payments but say that they could be convinced to use it. This reflects the extent to which the eNaira could impact on the unbanked and underbanked to improve livelihoods, as well as economic growth and development in Nigeria.
“In addressing the issues associated with the digitalisation of money and monetary policy, the transmission of monetary policy is aided by the growth of money supply, which signifies the direction of liquidity and changes in price level”, he explained.