Market News

*Unveils USSD code to deepen financial inclusion 

*Predicts digital currency will dissipate use of cash 

*E-business deals hit N2.4trn 

*CBN reverses decision to extend interest rate on intervention funds  

James Emejo in Abuja and Nume Ekeghe in Lagos

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday disclosed that the Central Bank Digital Currency (CBDC) also known as the eNaira has recorded over 200,000 transaction volumes valued at N4 billion since the platform was launched by President Muhammadu Buhari in October 2021. Emefiele, also said effective next week, Nigerians, both banked and unbanked, would be able to open eNaira wallet and conduct transactions by simply dialing the Unstructured Supplementary Service Data code (USSD) *997# from their phones.

He added that since the launch of the initiative, the eNaira has reached 840,000 downloads, with about 270,000 active wallets comprising over 252,000 consumer wallets and 17,000 merchant wallets.

He said both merchants and consumers with bank accounts can use the NIBSS Instant Payment (NIP) to transfer and receive eNaira to any bank account, adding that this will further deepen the integration of the eNaira with the existing national payment infrastructure.

Speaking at the opening of the Grand Finale of the eNaira Hackathon in Abuja, the CBN governor said the world was now in the digital dispensation adding that the use of cash will soon dissipate to zero as digitisation become part of human lives. This was just as CBN Deputy Governor, Economic Policy Directorate, Dr. Kingsley Obiora, also revealed that the value of e-business transactions had grown from N39.3billion in 2014, to currently about N2.4 trillion.

Emefiele, however, pointed out the event marked another milestone in the jo

urney towards building the future monetary system of the country in response to the emerging trends and developments in the global digital space. He stressed that the eNaira remained a journey, not a one-time event, pointing out that the, “hackathon is a continuation of that journey and the first among many to come given that the future of central banking is inextricably bound to innovation.”

He said pursuant to achieving its mandate of preserving monetary and financial stability, the CBN is, “strategic in charting the future of Nigeria’s legal tender, be it in its traditional or digital form as the economy transits to a digital one as well as charting the course for innovation in the financial sector and in the infrastructure underpinning financial markets.”

The CBN governor further described the launch of the eNaira as timely and strategic in complementing the various diversification and digitisation initiatives of the federal government including the launch of the Nigeria Digital Economy Policy and Strategy (NDEPS), the National Broadband Strategy, as well as the introduction of the Start-Up Bill and a host of others. He re-echoed the central bank’s mantra that, “eNaira is the same Naira with far more possibilities. The eNaira will make a significant positive difference to Nigeria and Nigerians.”

Specifically, Emefiele, pointed out that the eNaira was expected to enhance financial inclusion, support poverty reduction, enable direct welfare disbursement to citizens, support a resilient payments ecosystem, improve availability and usability of central bank money, facilitate diaspora remittances, reduce the cost of processing cash, and reduce cost and improve the efficiency of cross-border payment among others.

According to him, the eNaira was also developed to provide Nigerians with a cheap, safe and trusted means of payment. He said, “Unlike the offline payments’ channels like agent networks, USSD, wearables, cards, and near field communication technology, the eNaira would give access to financial services to underserved and unbanked segments of the population. “Innovative products and services built on the eNaira would enhance Nigerians’ participation in the digital economy and promote further development of a burgeoning Fintech ecosystem.

“To achieve these set-out objectives, the project adopted a phased- approach with the first phase focusing on banked users, while the policy objective of the second phase borders around financial inclusion. “In addition, the eNaira platform possesses an innovation layer for products and services to be built with the aim of enhancing Nigerians’ participation in the digital economy and promoting further development of a burgeoning Fintech ecosystem.”

However, Emefiele noted that while the successes achieved so far including the global recognition of the great job on-going by the CBN is being celebrated, it must be acknowledged that the journey is iterative and therefore, requires cutting-edge innovation to sustain the vision and achieve the set-out policy objectives. He said the Enabling Private Sector Innovation remained one of the three foundational principles of CBDC, stressing that the, “hackathon event today is neither a coincidence nor an accident but rather another forward leap by the Central Bank of Nigeria in the implementation of eNaira, to ensure all Nigerians receive the full benefits of a Central Bank Digital Currency (CBDC).”

He said the conference remained an initiative that creates a collaborative environment for experts with a diverse set of skills to drive sustained innovation geared towards making the eNaira the pinnacle for digital financial services and the gateway to the digital economy. He said the meeting of tech-savvy experts was further aimed at exploring solutions to drive financial inclusion, SME growth, and the creation of start-ups; facilitate cross border trades and transfers as well as international remittances and FX exchanges; effective implementation of welfare-inclined government programmes, and enhance efficiency in the interbank market.

He said, “Therefore, today’s event is targeted at providing an engagement with critical stakeholders in the financial technology space to deepen the link between eNaira and Fintechs.”

He added that the eNaira hackathon recorded a sizeable interest from young and innovative Nigerians with a total of 4,667 registrations, comprising 4,082 male and 582 female applicants.

“This further corroborates the fact that Nigerians, both within and outside the country, possess innovative ideas and are willing and ready to leverage on exciting opportunities that the eNaira presents for enhancing digital financial services and contributing to national development,” he said.

Emefiele said, “From the presentations made over the course of this eNaira Hackathon, I am confident that it will unravel a pool of talents that would fuel the transformation of Nigeria into a world-class digital economy and beyond.

“From an initial cohort of over 105 groups that made the quarter finals and 75 teams that progressed to the semi-finals, the hackathon has reached its climax today with 20 teams in the finals from which the top 10 teams would emerge as prize winners.”

He commended the various teams and their members that had worked day and night to painstakingly articulate their pitches and prototypes, particularly those present at the finals.

However, Obiora, in his remarks at the occasion, said the use of cash as a means of payment was declining worldwide, adding that the minting of currency by the CBN had been reducing over the years.

He said there had also been an explosion in electronic business transactions, adding that the value of e-business grew from N39.3billion in 2014 to currently about N2.4 trillion.

He said, “So if you look at this movement, you will realise that the central banks in the world are responding to the yearnings of citizens which is why citizens in 96 per cent of central banks in the world are either working on digital currencies or they have done so already.”

He added, “This is why the CBN under the leadership of Mr. Godwin Emefiele decide we cannot but be the first to this. A lot of central banks are trying to copy what we have done which is why we are not resting and the reason we organised the hackathon to harness ideas.

“We are hoping that we will be able to get the private sector who usually are better than the public sector in innovation. We started with over 5,000 applicants and here we are at the grand finale, and it is my hope that we have these ingenious ideas harnessed into the hackathon that will improve the e-Naira.”

CBN Reverses Decision to Extend Interest on Intervention Funds

Meanwhile, the CBN has reversed its earlier decision to extend its reduction of interest rate on intervention funds.

The apex bank had in March this year extended the regulatory forbearance for intervention funds, keeping interest rate on the funds at five per cent till February 2023.

However, the CBN in a circular posted on its website yesterday, that was signed by the Director Financial Policy and Regulation, Chibuzor Efobi, stated that the return to nine per cent would take effect from September 1, 2022.

The latest circular titled: “Further to our Circular dated March 15, 2022 (Ref: FPR/DIR/PUB/CIR/001/040) extending the period of interest rate reduction on ail intervention facilities from nine per cent to five per cent per annum (as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy) the Central Bank of Nigeria hereby reverts the interest rate on all its intervention facilities to nine per cent per annum.

“The revised rate shall be implemented as follows: All intervention facilities granted effective July 20, 2022 shall be at nine per cent per annum; all existing intervention facilities granted prior to July 20, 2022 shall be at nine per cent per annum effective September 1, 2022.”