Nigeria’s President Muhammadu Buhari has assured that the adoption of the Central Bank Digital Currency and its underlying technology, called blockchain, can increase Nigeria’s Gross Domestic Product by $29bn over the next 10 years.
Speaking at the official launch of the eNaira in Abuja, on Monday, Buhari declared that the introduction would enable the government to send direct payments to citizens eligible for specific welfare programmes as well as foster cross-border trade.
According to him, alongside digital innovations, CBDCs can foster economic growth through better economic activities, increase remittances, improve financial inclusion and make monetary policy more effective.
“Let me note that aside the global trend to create digital currencies, we believe that there are Nigeria-specific benefits that cut across different sectors, 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,” he asserted.
Buhari said with the launch of eNaira, the country became the first in Africa, and one of the first in the world, to introduce digital currency to her citizens.
He commended the Governor, Central Bank of Nigeria, Godwin Emefiele, his deputies and the entire CBN staff who worked tirelessly to make the launch of Africa’s first digital currency a reality.
Assuring Nigerians of the safety and scalability of the CBDC system, the President noted that the journey to create a digital currency for Nigeria began sometime in 2017.
“’Work intensified over the past several months with several brainstorming exercises, deployment of technical partners and advisers, collaboration with the Ministry of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission, integration of banking software across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC system,” he said.
The President also used the occasion to explain to Nigerians why he approved the use of the digital currency.
He said, “In recent times, the use of physical cash in conducting business and making payments has been on the decline. This trend has been exacerbated by the onset of the COVID-19 and the resurgence of a new digital economy.
“Alongside these developments, businesses, households and other economic agents have sought new means of making payments in the new circumstances.”
Equally, the Nigerian leader noted that his approval was also underpinned by the fact that the CBN had been a leading innovator “in the form of money they produce, and in the payment services they deploy for efficient transactions.”
On his part, Emefiele explained that “eNaira is Nigeria’s CBDC” and the digital equivalent of the physical naira.
“As the tagline simply encapsulates, the eNaira is the same naira with far more possibilities. The eNaira – like the physical naira – is a legal tender in Nigeria and a liability of the CBN. They will have the same value and will always be exchanged at one naira to one eNaira,” he said.
