IMF Describe Adoption of eNaira Disappointingly Low
The public’s acceptance of the eNaira has been characterized by the International Monetary Fund as regrettably low.
The Bretton Woods organization recently published an interim report titled “Nigeria’s eNaira, One Year After” that detailed how the digital money performed throughout its first year.
On October 25, 2021, President Muhammadu Buhari (ret.) officially launched the digital money at the state house in Abuja.
However, according to the IMF, 98.5 percent of eNaira wallets downloaded following the announcement were never utilized.
IMF noted that the Central Bank Digital Currency project had not yet progressed past the initial wave of modest acceptance, but it also noted that household and business eNaira usage had been sluggish.
“The initial increase in retail wallet downloads lasted for a few weeks before slowing off. More specifically, it took just 25 days for the number of downloaded wallets to reach 500,000 units; however, it took another 63 days to achieve 600,000 units, and another 143 days to reach 700,000 units, according to the research.
“As of the end of November 2021, there were around 860,000 retail eNaira wallets. Only 0.8% of Nigeria’s active bank accounts are represented by this.
As of the end of June, “Merchant wallet download has reached about 100,000, which is about one-eleventh of the number of merchants with Point-of-Sale (POS) terminals—which enable credit or debit card payments.”
The institution also disclosed that, aside from the initial surge it experienced soon after it was launched, the downloaded wallets had low transaction counts and some had not been used at all.
It further stated that only 1.5% of downloaded wallets completed the typical weekly number of eNaira transactions.
“Since its beginning, the average weekly volume of eNaira transactions has been around 14,000, which represents only 1.5% of all active wallets. According to the paper’s findings, 98.5 percent of wallets are never even opened in a given week.
“During this time, eNaira transactions had an average value of 923 million naira each week, or 0.0018 percent of the average M3 volume. The typical transaction value has been 60,000″
The institution said, “Given that the former has the potential to either complement or replace the latter, a plan must be established to establish the proper relationship with mobile money in order to maximize the potential of the eNaira for financial inclusion.
“Cost savings from integrating CBDC—as a bridge vehicle—into the remittance process [may] also be substantial.”