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Problem and prospect of e-naira in nigeria


1.1 Background of the study

Changing technology, economic advancement, and the desire to effectively fulfill the functions of money have all spurred monetary changes throughout history. These developments point to substantial changes in the retail payment environment, including a drop in cash usage. Digital money was born as a result of this tsunami.

Digital currencies, according to Gilbert, Scott, and Loi, Hio. (2018), have qualities comparable to traditional currencies but, unlike currencies with printed banknotes or minted coins, do not typically have a physical form. The lack of a tangible form enables for near-instantaneous transactions through the internet and eliminates the costs of transmitting notes and coins. As a result, digital currencies will continue to be helpful for inter-party transactions as long as both parties acknowledge the currency’s legitimacy, as they offer the benefit of quick settlement, particularly in online communities. Although cryptocurrency is the most popular form of digital currency, there are thousands of them in the modern world, each of which operates and enjoys security thanks to the respective encryption codes mutually adopted by the parties in such transactions, especially since most governments around the world have shied away from conferring any form of endorsement and legitimacy on transactions conducted through such channels.

Given the rising popularity of digital currency, various governments throughout the world, including Nigeria, have begun to express interest in digital currency activities, with the CBDC option emerging as the preferred entry point. In that regard, the CBN’s move to introduce the e-Naira must be considered the Nigerian government’s first foray into the digital currency world. As a result of this rapid technical advancement and financial market growth, international economies have begun to transition from paper money to digital currency, with Nigerian economies following suit.

According to Abdulkareem M. (2021), central banks around the world have been delicately working on their digital currency by gradually weaning themselves off rapidly-declining cash payments, which is why the Central Bank of Nigeria joined the fray so that Nigeria is not left in the lurch, which led to the launch of her e-Naira, which comes after instructing banks to close cryptocurrency and ban crypto-related accounts in February 2021. (premiumtimesng.com). The consequences for payment system efficiency, as well as the possible hazards associated with the operation of these systems, must to be evaluated. As a result, if digital currencies become widely used for high-value transactions or other asset types other than funds transfers, their impact on other areas of central bank responsibility, such as payment system oversight and regulation, financial stability and monetary policy, and associated fraud and money laundering tendencies, could become more prominent, posing a relatively high risk to public users.

1.2       Statement of the problem

Prior to the introduction of the electronic naira, the paper naira in Nigeria had a severe foreign currency crisis, and the naira’s pace of depreciation aroused widespread worry among citizens, necessitating the need to test an alternate legal tender. Furthermore, as advised by the CBN earlier this year, 2021, cryptocurrency is prohibited, necessitating the transition of the country’s currency from paper to electronic.

Adolphus (2021) noted that since the publishing of the e-Naira guideline in Nigeria, some concerned voices have expressed their reservations that e-naira is similar to what people are used to and hence is not necessary. This is because of the increase rate of cybercrime  in Nigeria. He added that this is so, due to the large number of financial transactions that occur on a daily basis, making security in financial transactions on such platforms a danger that has sparked public debate and concern. More recently, cyber thieves have grown increasingly sophisticated and cooperative, as they  engage in a variety of criminal activities, including online gambling, financial crime, web jacking, cyber defamation, virus/warm, email spoofing, data diddling, and so on, especially when they have access to a person’s identity and pocketbook using digital currency. As a result, the average Nigerian is wary of this new development on the recently introduced e-Naira.

Many reasons have been advanced as to why central banks are considering issuing their own digital currency, according to Emmanuel O. (2021), such as lowering the cost of managing paper currency, leveraging new emerging digital technologies, improving the digital readiness landscape, maturing identification registries, driving financial inclusion, simplifying tax and revenue administration, and so on.  notwithstanding the watertight measures that the CBN would undertake in good faith as the host and curator of the nation’s financial services ecosystem, it is necessary to assess the risks associated in this venture. This, according to Kalu (2021), is because digital wallets, by their very nature, increase systemic fraud risk due to the velocity of money and transactions, which can have a significant impact on the entire financial services ecosystem if significant failures arising from a mass-market financial services system, which the CBDC is positioning to become, have spillover effects. Following this stipulation, there has been a lot of public interest in the planned launch of the e-Naira rules. The potential of successful execution of the rules in a manner that would most profitably influence public interest while avoiding avoidable hazards is of key concern to the Nigerian people. More so, because transactions in this manner do not involve any physical exchange of cash but rather rely on computers that are still unfamiliar to the majority of Nigerians, the amount of exposure to digitally non-compliant individuals remains high. As a result, if the e-Naira is approved as a legal currency, many analysts are concerned about the problems and prospects of this new development. Thus, the purpose of this study is to look at the problem and prospects of the e-Naira in Nigeria.

1.3       Objective of the study

The broad objective of this study is to examine problem and prospect of e-Naira in Nigeria. Specifically the study seeks to:

  1. Ascertain the benefit of e-naira launching to Nigeria economy.
  2. Investigate if there are distrust  perceived by the Public on the eNaira Innovation.
  3. Determine the challenges that might hinder the acceptance of this new invention.

1.4       Research Questions

The research is guided by the following questions:

  1. What are the benefit of e-naira launching to Nigeria economy?
  2. Are there any form of  distrust  perceived by the Public on the eNaira Innovation?
  3. What are the challenges that might hinder the acceptance of this eNaira invention?
  4. What are the possible recommendations to ensure the public acceptance and adoption of eNaira?

1.5       Significance of the study

Findings from the study will be relevant to economic developers, policy maker, government and  public users. To government,policy makers and economic developers, , the result of the study will enlighten them on the need to throw more on this new development in other help the general public gain clarity about e-Naira and furthermore clear their doubts and fears on its usage. To other sectors of the economy who this new development would affect their operations, the result of the study will enable them to brace up to the challenges that will accompany the  launch of e-Naira and find a way to downplay it in other to remain relevant in the changing business environment. Finally findings from the study will add to the existing body of literature and serve as reference tool for both scholars and student who wishes to conduct further studies in related field.

1.6       Scope of the study

  1. The broad objective of this study is to examine problem and prospect of e-Naira in Nigeria. The study will further investigate if there are distrust  perceived by the Public on the e-Naira Innovation and suggest ways to encourage  public acceptance and adoption. The study is however delimited to Aba commercial Town in Abia State.

1.7       Limitation of the study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing that it is a new discourse thus the researcher incurred more financial expenses and much time was required in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. Additionally, the researcher will simultaneously engage in this study with other academic work. However in spite of the constraint all these constraint were downplayed to give the best.

1.8       Definition of terms

Digital Currency: Digital currencies are monies that exist not in physical form but only as electronic data, but perform the basic functions of money being unit of account, store of value and means of exchange.

eNaira: eNaira is the name given to the CBN’s first proposed digital currency. eNaira is a central bank digital currency (CBDC) issued by the Central Bank of Nigeria as a legal tender. It is the digital form of the Naira and will be used just like cash.


Abdulkareem M. (2021) Businesses in Nigeria must accept e-Naira – CBN retrived fromhttps://www.premiumtimesng.com/news/more-news/486095-businesses-in-nigeria-must-accept-e-naira-cbn.html

Adolphus Areban Aletor (2021) Nigeria’s e-Naira: An analyst’s perspective retrieved from https://guardian.ng/opinion/nigerias-e-naira-an-analysts-perspective/

Daily Trust (2021) Educate Nigerians On E-Naira, retrieved from https://dailytrust.com/educate-nigerians-on-e-naira

Ezuwore- O., Eyisi A., Emengini S., & Alio F.(2014) A Critical Analysis of Cashless Banking Policy in Nigeria. IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 5. Ver. V (May. 2014), PP 30-42www.iosrjournals.org

 Gilbert, Scott & Loi, Hio. (2018). Digital Currency Risk. International Journal of Economics and Finance. 10. 108. 10.5539/ijef.v10n2p108.

Kalu Aja (2021) All you need to know about the e-Naira set to be launched on October 1 retrived from https://nairametrics.com

Premium Time: https://www.premiumtimesng.com/news/more-news/486095-businesses-in-nigeria-must-accept-e-naira-cbn.html


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