Hands holding spread of multiple Nigerian naira notes, cash, currency in an outdoor setting

eNaira faces uncertain future after ousting of Nigeria’s central bank governor

The first central bank digital currency (CBDC) in Africa, Nigeria’s eNaira, faces an uncertain future after the ousting of Godwin Emefiele, the Central Bank of Nigeria (CBN) governor who pushed for the project.

When Bola Tinubu assumed office as Nigeria’s president, he pledged to crack the whip on government officials who had been abusing their power. Ten days later, he dismissed Emefiele from the central bank, ending the tenure of Nigeria’s second-longest serving CBN governor.

Just days later, State Security Service took Emefiele into custody for questioning. He has been held in custody since, accused of economic sabotage, financing terrorism activities, and mismanaging forex reserves. Emefiele is also being taken to task over the controversial naira redesign project that escalated into a severe cash shortage.

Under Emefiele, CBN launched the eNaira, one of the pioneer CBDCs globally and the first in Africa. However, the digital currency has failed to garner interest from Nigerians. Efforts like distributing welfare funds through the wallet, slashing fees, and introducing USSD access have done little to drum up interest in the CBDC.

Emefiele’s exit could spell doom for the digital currency, local experts say. Under the new interim governor Folashodun Shonubi, CBN is likely to review many of Emefiele’s policies and projects. This includes the eNaira, which local reports claim will likely take a backseat under the new administration.

“It may move to the back burner, but I don’t see it being killed outright; it is a public initiative with global attention,” Emeka Ajene, a fintech expert, says.

While the eNaira’s future is uncertain, digital assets could fare better under the new leadership. It was under Emefiele that CBN prohibited banks from processing digital asset payments. He described digital currencies as “money that is created out of thin air.”

He further claimed that blockchain networks enable crime as digital currencies are untraceable.

“Now we know enough at this stage to decide that a continuation of these opaque activities significantly threatens the safety and soundness of our financial system,” he said.

President Tinubu has pledged to push for the adoption of digital assets and blockchain. His new appointment to lead the CBN could be the first move toward realizing this pledge.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

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