E-Financial
e-Naira: CBN to Fortify Nigeria’s Digital Currency
Central Bank of Nigeria (CBN) has described the e-Naira, Nigeria’s proposed digital currency as a critical national infrastructure, a term used by governments to describe assets that are essential for the functioning of a society and economy.
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Such critical infrastructure, civil nuclear, communications, defence and so on are protected to avoid operational and cyber-security risks.
Godwin Emefiele, governor of the CBN, said the “e-Naira” which it plans to launch in October, would operate as a wallet against which customers can hold existing funds in their bank account.
A CBN document offered more insights into the digital money regime, especially the potential risks and mitigation measures, the apex bank said there would be a co-existence of traditional payment systems and the CBN Digital Currency (CBDC) to address interoperability risks that might be associated with the implementation.
CBN said it would apply regulatory framework and compliance mechanisms to prevent disruptive competition for the electronic money.
On the associated cost and risk of deploying/on-boarding a new payment platform, the bank explained that medium to long- term pay-off in increased efficiency of operations was expected to offset initial outlay.
It added that any risk of disintermediation would be addressed by the introduction of limits on the e-Naira holdings.
The document further stated that the introduction of the CBDC would, among other things, usher in new approaches to payment as well as bring about new bank and non- bank players in the financial system.
The digital currency regime would also introduce a new range of banking services and integration with new systems, providing new possibilities for the payment architecture.
According to the apex bank, the two-tiered model for CBDC would facilitate a public-private partnership arrangement whereby the CBN would design the e-Naira and distribute through regulated financial institutions, while the latter would in turn provide the digital cash to individuals and businesses
Essentially, under the e-Naira regime, individuals and businesses would be able to transfer value in real time through existing and future payment channels. People would also be able to transfer value in real time while offline to other persons and businesses.
According to the apex bank, the e-Naira would lower the cost of operations and cash management as well as improve visibility and insight of transaction date for financial institutions. It would also improve opportunities in the financial system, creating new business opportunities from emerging business models, financial products, and services.
Emefiele said if “you have some naira in your account and you choose to convert part of your naira into a digital wallet by way of a digital currency, we will support that.
“If, for instance, you have N10 million in your account. Of course, when this starts, the CBN will move some of the balances of banks with CBN to those banks in digital currency. So, you go to your bank, you have N10 million and you say you want to convert N2 million out of your N10 million into a digital currency. They will debit your account and move it to your wallet of N2 million digital currency, which you can spend across countries.”
He added, “We think that this is a noble idea and we are not the first…many other central banks are at advanced stages of revealing their own digital currencies. And our own digital currency, which is tagged e-Naira, will certainly come into operation, by the special grace of God, by October and we are working very hard for this.”
Emefiele also said, “We believe that transactions will be cheaper and more efficient, as there will be less to complete.”
He said as Nigeria moved to the digital economy, like the rest of the world, cash would not play in that space.
“Therefore, e-Naira, which will represent the digital equivalent of cash, will be used as the fiat currency to effect transactions,” he stated.
“And in terms of financial inclusion, we believe that with over 30 per cent of bankable adults still outside the financial system, the ability to have offline payment through our e-Naira initiative will bring most of them into the formal financial sector,” Emefiele said.
Julius Arhebun, the Head of Agency Banking a Nigeria’s leading payment service bank, MoneyMaster, has disclosed that the promotion of financial inclusion is one of the core mandates of the service.
He said this recently as the bank introduced a new 100MB data offer for every transaction made in the offer, which is available for Glo customers using the bank’s USSD banking code, *995#. The initiative is meant to incentivize the unbanked and underbanked population to ease the creation of their own mobile wallet via its USSD banking platform.
According to him, the offer builds on the various financial education “we have been providing online and across our various customer touchpoints”.
He added that “with this new 100MB offer, we want to encourage Nigerians in the unbanked and underbanked pools to be financially included by having at least a mobile wallet. The account number of this mobile wallet is derived from their mobile number, and can be easily recalled”.
MoneyMaster PSB is a leading provider of innovative digital financial products and services that transform lives and contribute to sustainable living.
The PSB has the mission to deepen financial inclusion and has been instrumental in providing financial technology services to bridge the gap between the banked, underbanked and unbanked population.
The payment service bank recently unveiled a 10 percent data bonus for existing and new customers who are on the Glo network for recharges of N1000 or more. The offer has been adjudged one of the best in the country based on the volume of data on offer to customers. The data purchases have a 30-day validity while unused data can be rolled over upon next plan subscription.
As part of President Bola Ahmed Tinubu’s state visit to France, the Chairman of UBA Group, Tony Elumelu in the presence of President Tinubu and the President of France, Emmanuel Macron, signed a landmark business cooperation agreement with the French Finance Minister, Antoine Armand.
The agreement is a significant indication of support by the French Government for the development of UBA’s full banking operations in France.
Speaking at the signing ceremony, Tony Elumelu, the Chairman of UBA Group commented: ”This partnership reinforces our commitment to seamless international banking services for our customers, not just across the 11 Francophone African countries we serve, but Africa as a whole; and French and European customers transacting with Africa.
Expanding into France is a natural progression, with Paris serving as our European Union hub, as we continue to bring Africa and the world together, through innovative financial solutions. Paris will join London, New York and Dubai, as a critical component of our unique global network.”
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally.
Operating in twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.
The National Pension Commission (PenCom) and the Pension Operators Association of Nigeria (PenOp) are taking steps to integrate workers who are not currently contributing to the Contributory Pension Scheme (CPS) into the Micro Pension Plan (MPP).
The initiative targets workers without any form of pension coverage, including those who have left previous employers under the CPS but wish to join the MPP.
The MPP is designed to allow self-employed individuals and those working in companies with fewer than three employees to contribute towards a pension for their retirement or in cases of incapacitation. Additionally, pension operators are developing incentives to make the MPP more appealing to potential contributors.
At the micro pension plan industry stakeholders’ engagement forum held in Lagos recently, organized by PenCom and PenOp, the Acting Director-General of PenCom, Omolola Oloworaran, highlighted the critical role of the MPP.
She said the event’s theme: “Reimagining Micro Pension Plan: Balancing Service, Policy, and Health” accurately captures the essence of the MPP as a transformative tool for improving the lives of Nigerians.
To maximise the impact of the MPP, PenCom is embarking on several initiatives like market segmentation, rebranding, advanced technology, incentives and others.
Oloworaran pointed out that with over 77.5 million workers in Nigeria’s informal sector, even a small increase in MPP participation could unlock billions of naira in savings, positively impacting individuals and the wider economy.
In his presentation on the “Overview of the Micro Pension Plan,” Babatunde Alayande, head of the micro pensions department at PenCom, emphasised the importance of providing incentives to make the MPP more attractive and accessible to its target market.
Okhueleigbe John, head of the micro pension unit at Stanbic IBTC Pension, stressed the need for tailored policies to promote the growth of the MPP. He also advocated more financial literacy, public-private partnerships, and innovative funding strategies to drive incentives for the scheme. Additionally, he called for a review of the pricing structure of micro pensions to make them more appealing to investors.
Dr. Shem Ouma of Kenya APSA also provided valuable insights, recommending that operators incorporate built-in benefits, ensure flexible payment systems for contributors, and leverage technology to drive the MPP forward.
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