Nick Agule
Email: nick.agule@yahoo.co.uk
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15.08.2025
There are indications that the CBN intends to revive the eNaira. There are 12 questions for the CBN to tackle.
1. Security and Competition: The eNaira’s security—being backed by the CBN—is reassuring. However, does this not position the CBN, as regulator, in direct competition with Deposit Money Banks (DMBs), the regulated entities? If the CBN offers a superior product with sovereign backing, can DMBs realistically compete? Doesn’t this create an uneven playing field?
2. Wallet vs. Bank Account: While it’s commendable that eNaira doesn’t require a bank account, it does require a wallet. Will the effort needed to educate rural populations on wallet usage not be as demanding—or even more so—than encouraging them to open bank accounts?
3. Liquidity and CRR Concerns: If funding an eNaira wallet involves transferring deposits from DMBs to the CBN, could this be viewed as a disguised form of CRR? The phrase _“an additional, parallel financial infrastructure that leverages digital technology for efficiency and inclusivity”_ is elegant, and I love the English construct, but I struggle with its practical meaning. What is the actual penetration of digital infrastructure in rural areas to support this inclusivity? Would it not be more effective if eNaira wallets were domiciled within DMBs, allowing intra-bank debits and credits without shifting deposits to the CBN?
4. Impact on Bank Liquidity: If it’s acknowledged that eNaira could affect bank liquidity, should the CBN—whose core mandate includes safeguarding financial system stability—be promoting a scheme that might undermine that very stability?
5. Transaction Fees: The absence of transaction fees is a welcome feature. On this point alone, I would support eNaira if it helps pressure banks to reconsider the excessive charges currently levied on customer accounts.
6. Interest Earnings: While eNaira is fee-free, it also doesn’t pay interest either. Could this not leave depositors worse off? Interest from DMBs helps cushion the effects of inflation, whereas eNaira balances offer no such relief. Is this truly an advantage?
7. Monetary Policy and Transparency: eNaira appears to be evolving into a monetary policy tool. Is it appropriate for the CBN to introduce such a mechanism through the back door rather than via transparent policy channels? There are also legitimate concerns around privacy.
8. Cross-Border Use: Can an eNaira wallet be used for cross-border transactions—say, to spend in dollars or CFA?
9. Cash Conversion and Rural Access: eNaira aims to serve the unbanked, many of whom reside in rural areas. Yet once funds are converted to eNaira, they cannot be reconverted to physical cash or transferred back to a DMB account. How do we accommodate rural users who still rely heavily on cash?
10. Wallet Interoperability: Spending from an eNaira wallet requires transferring to another eNaira wallet. How do we enable transactions between wallet holders and those without wallets—especially given the current low adoption rates and the realities of rural commerce?
11. The CBN offers no interest on eNaira balances, yet it lends these same funds to DMBs at steep rates—sometimes exceeding 30%. Is this not effectively a strategy to attract free deposits while generating income for the CBN?
12. Moreover, the financial costs for establishing and maintaining the eNaira platform remains undisclosed. A Caribbean-based firm was reportedly involved in its development, but how much has the CBN actually spent to date? What distinguishes an eNaira wallet from a conventional bank account with online access? And in light of Nigeria’s pressing social and economic priorities, can the cost of the eNaira truly be justified?
_Nick Agule is a Nigerian deeply committed to the country’s development, given the abundant natural and human resources._
