eNaira : Nigeria´s GIANT bold step to digitalization

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Alkali Amana on behalf of ARYZE, interviewed Dr. Babatunde Oghenobruche Obrimah, COO at the Nigeria Fintech Association. This interview was conducted as part of our Content Ambassador program. The eNaira is the result of the Nigerian central bank´s project: ” Giant ” and it is set to be launched on Nigeria´s Independence Day, October 1st. There is much to anticipate regarding its possibilities and implications. So, in pursuit of what it portends for the Nigerian economy, its uses, and its future, we asked Dr. Babatunde to highlight the importance of the currency and present key information regarding its release. 

What does having a digital currency in the form of the eNaira mean for Nigeria’s economy? 

Money has always evolved from Commodity money (trade by barter) to electronic money. The eNaira is a digital version of the paper currency in use. The benefits to the economy will be a reduction in the cost of printing paper money, it would enhance the cashless policy and improve financial inclusion.

What is the logic and importance behind the adoption of digital currency for Nigeria and how does this affect the operation of Fintech and microfinance firms in the country?

Adoption of the eNaira will not affect the operations of Banks, MFBs and Fintechs. The process of currency flow is still being maintained by the CBN where it is the producer and supplies banks and other financial institutions acting as retail providers.  

What is the model for commercial banks with regards to the eNaira; will they issue the digital currency or simply distribute it? 

As designed by the CBN, commercial banks will be distributors, however, the policy could change in future to allow commercial banks issue the digital currency.

On what technological platform is the eNaira designed to run (Blockchain?), and what plans are in place to bring existing customers on board without disrupting the banking space? 

The CBN circular has a three-tier approach to its implementation and for each category, they need to download the CBN eNaira wallet to be able to be on board. The limitations of N50,000.00, N200,000.00 and N1.0 million placed on transactions are enough reasons not to disrupt the existing banking space.

Are there privacy policies to guide the use of the eNaira, especially in a bid to protect customer data towards the Government and avoid potential cases of financial repression? 

The CBN is yet to issue policy guidelines, it would however, be expected that customer data would be protected. Not ensuring that also predisposes the Government and CBN to legal actions by people whose data get compromised.

Are there any hopes or concerns with the potential entry of the eNaira into Nigeria’s economy and Fintech space? 

I am not aware of any concerns with respect to implementation, this obviously is a pilot and would be scaled up and modified as times go on. The only concern by Fintechs is that of not being considered to be part of the consortium providing the technical support as against being left out by the CBN. 

You can learn more about the eNaira by watching this panel debate by CoinNewsExtra, where Dr. Babatunde Oghenobruche Obrimah participated together with experts such as Chuta Chimezie (founder of Blockchain Nigeria User Group), Charles Okarformbah (Co-founder/CTO convexity) and Senator Ihenyen (president stakeholder in Blockchain Technology Association of Nigeria).

Nigeria is leading the path to digitalization

As Nigeria leads the way, other African countries exploring and looking to implement the idea of a digital currency include Ghana, Tunisia, Morocco, Kenya, and Madagascar. Key lessons will be learned from Nigeria’s launch of the eNaira, and the adoption of digital currencies should see Africa stand out better in transactions and Fintech innovation globally. African governments must, however, consider and deal with certain indices to fully realize the potential of digital currencies. Digital illiteracy, lack of adequate power, lack of basic internet utility, and the improvement of financial regulations must be treated accordingly and appropriate remedies provided. 

For Nigeria, this is taking one giant step in leading Africa to the future. With thriving Fintech and innovative digital solutions booming on the continent, driving financial inclusion is no more a question of how, but when it can fully be achieved. Moreover, based on research by the Sustainable Development Business Commission, achieving the SDGs unlocks a prize of 12 trillion dollars for the private sector.

Most of this potential lies in developing countries and emerging economies. ARYZE will become part of this thriving ecosystem and form meaningful partnerships in the continent with a SDG-driven purpose to promote financial inclusion, allowing for social mobility and overall progress benefiting African countries such as Nigeria.

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