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eNaira: Only Eight Percent Of Wallet Used Due To Slow Adoptation - IMF

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The International Monetary Fund has disclosed that since its launch in 2021, the usage of the eNaira in Nigeria’s digital currency has refused to pick up, According to the fund, only about eight percent of eNaira wallets are in use, with an average transaction value of N53,000. It stated that as of November 2022, total eNaira wallet downloads amounted to 942,000.

This was revealed in its ‘Staff Report for the 2022 Article IV Consultation: Key Issues’ and ‘Nigeria: Selected Issues’ reports.

The IMF said, “Despite some initial technical glitches (Coincu, 2022), no major risk factors (e.g., a large-scale cybersecurity event) have materialized.

“However, the adoption of eNaira by households and merchants has been rather slow. After a strong initial uptake, wallet downloads have slowed, reaching 0.8 percent of bank accounts, and merchant wallet downloads amount to about 10 percent of merchants with Point-of-Sale terminals.

“Similarly, wallet activity is low, with most wallets appearing inactive. The average number of weekly eNaira transactions since the launch amounts to only eight percent of wallets, with an average transaction value of N53,000 (about $120).”

Nigeria became the second country after the Bahamas to launch a CBDC.

After the launch, President Buhari said he is optimistic the eNaira would help Nigerians to switch from the informal to the formal sectors, and the development would help businesses prevail and curtail the rampant practice of corruption in the economic sector of Nigeria.

In his words, “Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of and concerns of the economy.

“The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country.”

According to IMF, the eNaira will increase financial inclusion, and to achieve this goal the CBN need to consider those without bank accounts but, with mobile phones get access to digital currency.

It further stated, “Setting the right relationship with mobile money.

“A well-designed public and private partnership are required to ensure the proper safeguard of e-money/mobile money, considering that the private financial sector’s contributions to financial inclusions could be negatively affected depending on the design of eNaira’s use for financial inclusion.

“eNaira could be usefully integrated into the existing mobile payment system by (i) functioning as a safer store of value for mobile money users through an integrated mobile-CBDC wallet,” the President concluded.