Nigeria has become the first African country to launch its own digital currency: the eNaira.

According to Africa News, Nigeria is the most populous country on the continent and has the largest economy. The new digital currency will improve cross-border trade, push financial inclusion for those outside the formal economy, and increase remittances.

Nigerian President Muhammadu Buhari stated the following:

“We have become the first country in Africa and one of the first in the world to have introduced a digital currency for our citizens.”

Economist David Faulkner, head of HSBC’s Global Research team, issued the following:

“The eNaira issued by the Central Bank of Nigeria (CBN) will be a direct liability of the bank, legal tender at par with the physical NGN, and form part of the currency in circulation.”

“The CBN sees the eNaira as supporting financial inclusion through providing a less costly, more efficient and safe means of payment in a country where the World Bank estimates that c60% of the adult population was unbanked in 2017 (latest data). Beyond the economic gains from increasing financial inclusion, the CBN also sees the eNaira as enhancing the government’s capacity to deliver targeted social assistance, and boosting diaspora remittances through formal channels. These remittances are a critical source of foreign exchange in Nigeria, equalling c6% of GDP (USD24bn) ahead of the pandemic.”

The Central Bank of Nigeria (CBN) believes the eNaira currency will improve the effectiveness of its monetary policy.

Until Next Time…

(Sources)

Photo Credit: TRT World

Kaminska , I. (2021, November 2). The eNaira’s time has come. Financial Times. Retrieved November 28, 2021, from https://www.ft.com/content/efa0b41d-d891-4cca-b34e-92d717f15caf. 

eNaira: Nigeria rolls out Africa’s first digital currency. Africa News. (2021, November 25). Retrieved November 28, 2021, from https://www.africanews.com/2021/10/25/enaira-nigeria-rolls-out-africa-s-first-digital-currency//.