Article summary

  • IMF Evaluates Nigeria’s eNaira Performance: Recommendations for Improving Adoption and Functionality
  • eNaira Celebrates One Year with Mixed Results: Challenges and Opportunities Ahead
  • Nigeria’s Central Bank Digital Currency, eNaira, Faces Adoption Hurdles: An IMF Report Highlights Key Issues

Nigeria’s central bank digital currency eNaira is more than a year old, and the International Monetary Fund (IMF) has shared a belated birthday gift in the form of a research report evaluating its first-year performance. gifted in currency.

IMF researchers called the eNaira’s debut year ‘admirable’ but offered more suggestions for improving its core mandate.

eNaira emerges as the second CBDC globally

eNaira was the second CBDC in the world after the Bahamas Sand Dollar, which premiered in October 2021. The paper concluded that the retail side was brokered by eNaira, but those early adopters had not yet penetrated, so waiting times were not an issue.

The central bank of Nigeria has introduced a phased rollout that undermines the CBDC’s two main goals: increasing financial inclusion for the unbanked and facilitating remittances, according to IMF officials.

Only about 1.5% of wallets are active each week, with just 802,000 total transactions during the study period. The figures represent less than one per wallet, and less than 1% of bank accounts in the country have wallets. The paper observed:

  • “Like any network product with similar traits (e.g., credit card), breaking the initial low adoption equilibrium requires a mix of clever strategies and luck.”

Mobile money operators (MMOs) have a vast network in Nigeria, and the eNaira’s relationship to that network is a key question raised in the paper. The CBDC could compete with the MMOs on the retail market or facilitate the MMOs’ operations by providing a bridge between them.

Overcoming obstacles

The paper called the eNaira’s replacement of all the MMOs’ services “hard to imagine,” but also noted that a bridge function could set off a difficult “industry reshuffle.”

As a single-currency system, IMF says the eNaira is unable to accommodate remittances directly, but mentioned this could be overcome either by allowing international money transfer operators to receive eNaira wallets or through intermediation.


Researchers recommended the former, though both options will remain expensive, which the IMF considers a serious problem considering the parallel, underground market that serves the same purpose.

The paper recommends several steps to increase eNira usage, such as using eNaira for social payments in combination with MMOs to improve social remittance systems and increase adoption.

You can even encourage the seller to use her eNaira. The newspaper reported that the Central Bank of Nigeria has launched efforts to include it through Naira, but remittances remain problematic.

As of October 2022, fewer than 1.15 million Nigerians had used eNaira, or about 0.5% of the country’s population. Earlier this month, Central Bank of Nigeria (CBN) officials told reporters that only about 1.4 million transactions had been processed since the launch of the eNaira platform.

What you should know

In 2017, the CBN warned commercial banking institutions about their handling of cryptocurrency assets. eNaira was the government’s answer to cryptocurrencies.

However, between January 2021 and June 2022, the number of p2p transactions worth N497.35 billion($1.16 billion) in bitcoin traded by Nigerians on Paxful Crypto assets, whether government-issued or not, have recently experienced a sharp decline around the world.

This has caused some investors to lose interest in digital currencies. But there’s more to eNaira’s unpopularity than this slide.

Unlike Bitcoin and other cryptocurrencies, eNaira is issued and regulated by the Central Bank of Nigeria. This is a digital version of the Fiat Naira. Usage is limited to selected platforms and retailers.