The Financial Czar of Nigeria, the Central Bank Of Nigeria (CBN) has been struggling on how to get more Nigerians to participate within the countries financial landscape. However, Nigeria, with its estimated 201 million people,may just have found a solution to its financial exclusion problem.
Historically, the CBN has not achieved much success with its strategies at Financial Inclusion, Nigeria Inter-Bank Settlement System Plc (NIBSS) reveals that Nigeria has 47 million Bank Verification Numbers (BVN). The BVN is an 11-digit number that acts as a universal ID for bank holders in Nigeria. Going by the total adult population of Nigeria which stands at 117 million, this means that only approximately 40% of the country’s adult population have bank accounts.
How will the e-Naira work
The deployment of the e-Naira or new Central Bank Digital Currency (CBDC), is expected to strengthen the existing banking infrastructure in the country. Asides from the technological strength of the Nigerian banking system, the average Nigerian transaction involves the use of a variety of payment methods which includes; Point of Sale (POS) machine, Online Bank Transfer, USSD Code enabled transfers, and fiat currency and these methods are all instant in cash finality. The average Nigerian retailer accepts at least one of these payment methods when a transaction is about to take place.
To onboard the e-Naira there is a minimum requirement for individuals. Individuals can have access to financial services with just their phone numbers. According to reports, there are 3 levels to the government-issued wallet and to have access to the first level, all the information required to have access includes; passport photograph, name, birth date, place of birth, phone number, address, and National Identity Number (NIN). These requirements are pretty easy to obtain and ultimately, by making the process of financial inclusion much simpler, a state of mass adoption is created thereby making the financial inclusion process streamlined and less complicated.
Transaction limits
The e-Naira has a transaction limit of fifty-thousand-naira on send and receive transactions with a cumulative limit of three hundred thousand nairas fixed each day, though it is still a very effective approach to aid financial inclusion.
Although the e-Naira makes it easy to access the financial systems through a smartphone, the other question to ask is how many Nigerians have a smartphone that can engage the e-Naira App?
According to Pew Research Center, only 32% in Nigeria use smartphones. Nigeria’s population is 201 million people and this represents approximately 64 million people. Another report from the Guardian states that Nigeria has roughly 170 million mobile phone users based on subscriptions but only about 25 to 40 million users have smartphones which represent only between 10-20%.
The concept of the e-Naira and the CBN's desire to upgrading Nigeria to becoming a leading digital economy in Africa is indeed lofty, however, it is important that the CBN be resolute, fine-tune the e-Naira, launch the product and ensure the success of the e-Naira project.
