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On Nigeria’s Failing CBDC and Its Hard Lesson

by Olayimika Oyebanji

Nigeria’s Central Bank Digital Currency (CBDC), the eNaira, whose launch gulped millions of Naira from the nation’s coffers, may likely hit rock bottom in its second year. The eNaira, Africa’s first CBDC, was launched in October 2021 by Nigeria’s apex bank, the Central Bank of Nigeria (CBN), to digitize the Naira but its extremely low adoption rate underpins the thesis that cash is king in Africa’s most populous nation.

The massive rejection of the eNaira by the country’s citizens and merchants is reminiscent of the failure of the 2012 cashless policy that was aggressively pursued by the erstwhile Governor of the CBN, Sanusi Lamido Sanusi. It is a catastrophic repeat of history and its hard lesson.

Despite the millions of Naira that it cost to deploy, the eNaira is going south because it is ill-timed. In other words, its imminent failure is largely due to the sheer disregard for the sentiment of the people for whom it was designed. The ill-timing of the e-Naira does not only make it unresponsive to the CBN’s financial innovation strategies but it also spells doom for its effort to strengthen the Naira through blockchain technology.

As of today, the eNaira’s adoption rate stands at a meagre two percent, with only a fraction of users on banking app platforms nationwide. The rapid rise and subsequent decline in its popularity cannot be solely attributed to the country’s financial literacy problem. Rather, it signifies the Central Bank of Nigeria’s failure to gauge the e-Naira’s appeal as a public policy tool through an effective interface with the people.

Although Nigeria’s burgeoning informal economy holds 85% of the cash in circulation, its sentiment is far a greater consideration than the weight of the CBN’s monetary policy. Its sentiment caused the ensuing apathy among the population who have mostly rejected the eNaira for its lack of clarity and direction. For most people living in the country, a digital Naira, although a part of the sum, is far ahead of its time and has no chance to fully digitize the country’s economy.

The e-Naira and the IMF Factor

The CBN under Governor Emefiele was the first to catch the CBDC fever, and with the International Monetary Fund’s (IMF) technical support, Nigeria became the first country in Africa to launch its own digital currency at a time when it was thought to be a developed nation thing.

Furthermore, it is clear that the IMF played a direct role in the design of Nigeria’s CBDC but there is certainly the IMF anti-crypto policy at play. This  IMF factor has consistently played out in the way the IMF Board has criticized the sudden rise of cryptocurrencies, a class of assets which offers an alternative to fiat currencies, and in its strong stance that they should never be a legal tender.

The IMF factor was also enough for Nigeria’s CBN to go from banning cryptocurrencies in February 2021 to launching its own CBDC in October 2021 as a way to pro-actively halt the intrusion of cryptocurrencies and the foretold consequences the IMF warned everyone about. One year on, it is faced with the imminent failure of a highly publicized policy that its own people never asked for, what is more, it has lately become a classical example of how a country can commit economic blunders when no one is watching.

Even though Nigeria’s launch of its CBDC, the eNaira, brought it enormous attention in the comity of nations, the country’s sudden transition to a digital version of its currency remains questionable.


Central Bank Digital Currencies(CBDCs)have slowly crept into the economic agenda of the world due to the role of the IMF and its anti-crypto stance. Ill-prepared and ambitious, Nigeria took the early lead in its adoption in Africa but 2023 has not been a great year for it. Today, it has remained an uphill task to transition to a CBDC-based economy as the imminent failure of the e-Naira takes center stage. And its lesson for Nigerian policymakers is that in the collective wisdom of the people cash is King—no matter how the weight of the eNaira.

Read also: A Critique of Nigeria’s Blockchain Policy

Olayimika Oyebanji is a blockchain journalist & consultant keenly interested in crypto education. This is an updated version of the article first published on Hackernoon with the author’s due permission.