What is E-Naira: A Review Of Nigeria’s Digital Currency

What is e-Naira?

The e-Naira is a digital currency issued and also regulated by the Central Bank Of Nigeria (CBN) which has the same value as the physical naira notes. This digital currency was introduced and launched on the 25th of October 2021 by the Nigerian government under the regime of President Muhammad Buhari. The e-Naira is used just like the physical noted and also to carry out transaction both locally and internationally. The e-Naira is saved and kept on the e-Wallet and it is the first issued digital currency of the CBN with the slogan “same Naira More Possibilities”.

Features of e-Naira

The basic features of Nigeria’s digital currency are:-

  • The e-Naira supports a payment system that allows it users to be able to transfer money from their bank account to their e-Wallet.
  • It allows users have access to their e-Wallet, check balances as well as their transaction history to see transactions done on a daily basis and to decelerate fraudulent activities.
  • Easy and contactless payment: Users can make transactions using the e-Naira by just scanning QR codes which makes payment easy, fast and safe.
  • User-to-User transaction: It allows it’s users to be able to send money from their e-Wallet to each other through their bank account or card.
  • It can be used to make transactions internationally i.e beyond Nigeria because it is an acceptable means of payment.

Uses of e-Naira

Most Nigerians are not well informed or know little or nothing about the Nigeria’s digital currency. Below are the uses of e-Naira:

  • Reliable medium of payment: The e-Naira allows the medium of payment to be fast, reliable and cheap with no extra cost. Using the e-Naira allows users to be able to carry out and process payment with no additional cost and also very reliable without worrying about failed transactions and fraudulent activities.
  • The use of e-Naira has helped to improve the economic situation of Nigeria. The economic activities has improved since the implementation of e-Naira through access to capital and financial services.
  • ┬áIt fosters and enhances trade across the borders of Nigeria. With e-Naira trade across boundaries has been simplified and made easy. The transactions done are safe, cheap and reliable.
  • Transactions can be done digitally without the needing cash as it has the same value as a physical note and it is also recognized as an acceptable means of payment.
  • It provides support to the digital economy.
  • It includes the excluded i.e. it provides inclusion by allowing financial services to be made available to those who have little or no opportunity to bank.
  • It provides security because of its high security system which can’t be tampered and manipulated making transactions more safe than handling physical cash.
  • It improves business transactions as it allows payment to be done online from customers to businesses.

What problems does the e-Naira solves?

Physical notes has the role it plays, but the e-Naira was launched to serve a better purpose and tackle financial problems faced by the country. The problem e-Naira seeks to solve are:-

  • Financial Insecurity: The implementation of e-Naira would solve the problem of financial Insecurity faced by Nigerians when paying for transactions. Fraudulent activities would be decelerated as they can be traced.
  • Economic Instability: The use of e-Naira would help strengthen economic activities which would lead to economic growth. With the use of e-Naira by businesses, merchants and individuals the economic of the country would experience stability as well as growth and development.
  • Most times Nigerians are faced with the difficulty of trading internationally. With e-Naira trade can be done both locally and internationally without barriers and an easy mode of payment that is recognized as acceptable.

Challenges that affects the e-Naira

The digital currency of Nigeria when introduced by the Central Bank of Nigeria has its own aim, objectives and benefits, but it is faced with challenges that might make it fair after it’s introduction. The challenges that might affect the implementation of the e-Naira are:-

  • Lack of trust: Nigerians have no absolute trust in the government which has made Nigerians put little or no effort into using the digital currency. They feel the government would use the e-Naira to regulate their transactions as monitor their income inflow.
  • Cyber attacks: Without a strong security system the e-Naira would be faced with the challenge of cyber attacks every now and then. For the successful implementation of e-Naira, CBN has to take appropriate preventive measures that would prevent cyber attacks.
  • Illiteracy: The illiterate and those who are not properly educated about the use of the e-Naira would find it hard and unnecessary to use the digital currency.
  • Power Supply: The issue of poor electricity is on the increase and at a very high alarming rate. The digital currency needs power supply to be able to function and it is not every user that can afford to buy a generator or a solar system.
  • Most areas in Nigeria have internet outage despite having network providers in the country. This outage affects the implementation of e-Naira by the citizens of Nigeria because without a good internet connection the digital currency cannot be put to use.

Conclusion

To ensure the successful implementation of the e-Naira the CBN has to ensure that proper measures are taken to curb the limitations and challenges affecting it’s implementation. A good number of Nigerians (individuals and businesses) must also ensure to use the e-Naira which can boost the growth of the economy.

Leave a Comment