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How Lessons From Nigeria’s eNaira Rollout Can Guide Future of CBDCs in Africa

In its August monetary policy statement, the Central Bank of Zimbabwe (CBZ) announced that it has developed a “roadmap for adoption of CBDC [central bank digital currency] in Zimbabwe,” embarking on the next stage of its journey toward the issuance of a government-backed digital currency.

Read more: Zimbabwe Has ‘Roadmap’ to CBDC, Says Central Bank Governor

Although the statement made no mention of a specific time frame, it marked a key transition from the exploration phase to the consultation phase for Zimbabwe. The CBZ will now publish a consultation paper and give stakeholders 90 days to respond, with the aim of “fostering a broad and transparent public dialogue regarding the potential benefits and risks of CBDC.”

Prior to this announcement, Nigeria became the first African country to launch a CBDC — the eNaira — in October last year, as many central banks across the region remain in various stages of exploring and piloting the technology.

Related: Nigerians Can Pay Bills With CBDC eNaira

For example, Ghana and South Africa are at the most advanced stages, having launched live pilots of their CBDC schemes.

South Africa has conducted small-scale experiments with a wholesale CBDC and participated in a cross-border pilot with the central banks of Malaysia, Australia and Singapore, and the next stage for the country will be to test the digital rand at a larger scale and develop rules for its use.

More on this: Cross-Border CBDCs Being Piloted in Australia, Malaysia, Singapore, South Africa

In Ghana, interoperability with mobile money networks is seen as a high priority for the country’s central bank as it pilots its own digital currency.

“It is important that the eCedi is implemented to complement and enhance the existing payment systems,” the central bank has said, adding that “the various existing electronic and mobile payment solutions will therefore have to be interoperable with the eCedi to enable their utilization of the eCedi.”

See also: Ghana’s Central Bank Wants Digital Currency Available on Mobile Apps

Blocks in the Road for the eNaira

As African countries line up to roll out CBDCs, they would do well to take lessons from the slow adoption of the eNaira in Nigeria, one of the region’s biggest economies.

As PYMNTS reported last month, the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has accused banks of “apathy” when it comes to the use of the eNaira. He said that only around 700,000 customers have opened an eNaira wallet since they debuted last year, even though there are around 55 million bank accounts in the country.

Read more: Concerns Over Lost Fee Income Prompt Nigerian Lenders to Slow CBDC Adoption

Emefiele suggested that Nigerian banks’ hesitancy comes from a perceived loss of revenue from transaction fees and the prospect of a diminished role for commercial banks in the payments ecosystem, a process known as bank disintermediation.

That goal of protecting against the risk of bank disintermediation is the reason why central banks around the world aren’t rushing to introduce CBDCs immediately. The emerging consensus is that a phased rollout with the close involvement of all relevant stakeholders is the optimal route.

When PYMNTS spoke to Obi Emetarom, co-founder and CEO of the Nigeria-based pan-African payment company AppZone, he highlighted another issue with CBDCs that will need to be resolved before Africa can adopt digital currencies at a larger scale.

Watch the interview: Stablecoins, CBDCs Face Big Hurdles Before Knocking Out Fiat

He observed that as things stand, “A lot of the central bank digital currencies tend to function in silos,” but that fixing “interoperability issues with CBDCs would really make them a major game changer.”

Emetarom’s cautious optimism chimes with statements made to PYMNTS by Ola Oyetayo, the CEO of Verto, another cross-border payments startup with a presence in the Nigerian market.

Prior to the launch of the eNaira, Oyetayo said that Verto would be “probably one of the first adopters” of the CBDC to help businesses — regardless of where they’re located — move and send money effortlessly and seamlessly.

“And if central bank digital currencies can help with that, then we’re up for it,” Oyetayo added.

Emetarom and Oyetayo also share a mixed attitude toward cryptocurrencies like bitcoin, which the Central African Republic adopted as an official currency in April, becoming the second country in the world to adopt it as legal tender after El Salvador.

Learn more: Central African Republic, Like El Salvador, May Soon Regret Adopting Bitcoin

Oyetayo noted that although digital currencies in general have the potential to transform the African payments ecosystem, “We still don’t have, in my view, a strong use case for the transactional utility of crypto.”

For his part, Emetarom believes that “fixed supply cryptos are more securities than payment instruments,” and that ultimately, stablecoins and CBDCs present a more viable solution for day-to-day payments.

See also: B2B Marketplace VertoFX: From Currency Convertibility to Cross-Border Payments in Emerging Markets

What Next for Africa’s CBDCs?

While adoption of the eNaira may have been sluggish so far, that hasn’t stopped the CBN from plowing ahead with plans to make the digital currency available to Nigerians without a bank account. As PYMNTS reported this month, Governor Emefiele hopes the move will help to increase the number of eNaira wallets in the country to 8 million.

More on this: Nigeria Aims for 8M eNaira Users as Crypto Adoption Grows

As Zimbabwe and other countries watch Nigeria’s CBDC experiment unfold, they will likely be taking note of the challenges the country is facing. For Africa and the world at large, although first-movers shoulder the most risk, they also teach valuable lessons to those who follow.

For all PYMNTS crypto and EMEA coverage, subscribe to the daily Crypto and EMEA Newsletters.



About: The findings in PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed the responses from 9,904 consumers in Australia, Germany, the U.K. and the U.S. and showed strong demand for a single multifunctional super apps rather than using dozens of individuals ones.


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