eNaira USSD Code Transactions: CBN Targets Next Week For Nigerians

• As financial deals Hit N4bn mark

BY COBHAM NSA – The Central Bank of Nigeria (CBN) says Nigerians can now subscribe to the digital currency using short codes as part of efforts to improve the acceptability of the eNaira.

According to the CBN Governor, Mr Godwin Emefiele, digital currency will soon become part of “our lives” with a fresh target of about eight million users.

This is as he disclosed that the digital currency has reached about 840,000 downloads, 270,000 active wallets, comprising over 252,000 consumer wallets and 17,000 merchant wallets.

Speaking during the eNaira Hackathon grand finale in Abuja on Thursday, Emefiele said; “Pursuant to achieving its mandate of preserving monetary and financial stability, the CBN is strategic in charting the future of Nigeria’s legal tender, be it in its traditional or digital form as the economy transits to a digital one as well as charting the course for innovation in the financial sector and in the infrastructure underpinning financial markets. Hence, the importance of getting the balance right between innovation and stability.

“Against this background, the launch of eNaira was timely and strategic in complementing the various diversification and digitisation initiatives of the Federal Government including the launch of the Nigeria Digital Economy Policy and Strategy (NDEPS), The National Broadband Strategy, as well as the introduction of the Start-Up Bill and a host of others.”

Furthermore, the CBN Governor said; “As captured in the design paper released, eNaira is a journey, not a one-time event”, adding that; “This hackathon event is a continuation of that journey and the first among many to come given that the future of central banking is inextricably bound in innovation.

“We don’t have a choice but to live with the fact that we are now in a digital economy. In a digital space where the use of cash will dissipate to almost zero and the use of digital currency will increase and will now become part of our lives.”

“As simply encapsulated in our popular mantra, the eNaira is the same Naira with far more possibilities. The eNaira will make a significant positive difference to Nigeria and Nigerians. Specifically, the eNaira is expected to enhance financial inclusion, support poverty reduction, enable direct welfare disbursement to citizens, support a resilient payments ecosystem, improve availability and usability of central bank money, facilitate diaspora remittances, reduce the cost of processing cash, and reduce cost and improve efficiency of cross-border payment among others.

“The eNaira was also developed to provide Nigerians with a cheap, safe and trusted means of payment. Unlike the offline payments channels like agent networks, USSD, wearables, cards and near field communication technology, the eNaira would give access to financial services to underserved and unbanked segments of the population. Innovative products and services built on the eNaira would enhance Nigerians’ participation in the digital economy and promote further development of a burgeoning Fintech ecosystem.”

Further explaining efforts at ensuring the policy is deployed effectively in managing the Naira, the apex Bank boss said; “The second phase of the project has begun and intended to drive financial inclusion by onboarding the unbanked and the underserved users leveraging offline channels. Hence greater success is envisioned for the project with phase two expected to deliver more gains with the target of eight million users based on estimation using the diffusion of innovation model.

“I’m pleased and indeed delighted to inform you all today that by next week, Nigerians both banked and unbanked will be able to open an eNaira wallet and conduct transactions by simply dialing *997# from their mobile phones.”

Determined to improve the digital currency’s acceptability in the nation’s financial space, Emefiele had accused Deposits Money Banks (DMBs) of frustrating the project, noting during the July Monetary Policy Committee (MPC) meeting that banks’ apathy is because of their inability to make huge revenue from the eNaira project.

The apex Bank Governor further stated that; “Shortly after this, both merchants and consumers with bank accounts can use the NIBSS instant payment NIP to transfer and receive eNaira to any bank account of their choice. This will further deepen the integration of the eNaira with the existing national payment infrastructure.”

Also speaking at the event, CBN Deputy Governor, Kingsley Obiora, said a lot of central Banks are now copying what the CBN under the leadership of Godwin Emefiele have done, noting that the reason for organising the Hackathon is to harness ideas with the hope of courting the private sector which is better placed in innovation than the public sector.

On the need to fully embrace the eNaira project, Obiora said; “In South Korea, 77 percent no longer use cash to do payment, while in the Philippines, it is 30 per cent. In Nigeria too, we are also seeing the same decline in the use of cash, the minting of currencies in the CBN has been reducing in the last couple of years, so alongside this reduction in the use of cash has also been an explosion in electronic business and e-business and we have seen the value of e-business grow from 393 billion in 2014 to about 2.4 trillion now.”

In his remarks, Daniel Awe, Group Head, Africa Fintech Foundry (AFF), said the central bank has transformed from traditional regulator to a smart regulator, adding that; “The Hackathon is a platform that bring entrepreneurs. Coders, product managers to solve problems and build new business model.

“All over the world, there has been disagreement between innovators and regulators because regulators usually look at impact on financial stability as well as impact of those innovators on consumers as well as the risk while the innovators look at the opportunity in their ideas.

“However, this CBN is different as it has over the years partnered with innovators that will create job employment and bring value.”

On the partnership with the apex Bank, Awe said; “At African Fintech Foundry, we are honoured to have worked with CBN, from over 5,000 applications which is the highest application ever on the continent.”

He explained that the number was subsequently trimmed down to 20 which was a difficult task, saying; “those who could not make it, never quit and for those who will emerge winners, it is a morale booster to do more.”

In October 2021, President Muhammadu Buhari had launched the eNaira as Africa’s first Central Bank Digital Currency with the first phase of the launch focusing on banked users, while the second phase’s focal point is financial inclusion.