By Prosper Ishaya
Just three years ago, Nigeria’s immediate former president, Muhammad Buhari announced the launch of eNaira at a well-celebrated event at the state house in Abuja. The eNaira, a project of the Central Bank of Nigeria (CBN) at the launch was touted as a new payment system that would revolutionise the country’s financial landscape. It promised to modernise payment systems and foster greater financial inclusion for underserved populations.
The electronic currency, the apex bank said, will permit fiscal advantages and financial inclusion to strengthen the economy eventually. At the same ceremony, the former president claimed that the eNaira would potentially increase the country’s Gross Domestic Product by $29 billion in the next ten years.
On the day of the launch, the eNaira app was released in various app stores for download by businesses and individuals. On the app, eNaira tokens, equivalent to normal naira, could be purchased. Registered users could make payments, transfer money, and save up the tokens via the app.
By January the following year, the CBN announced that the app had been downloaded over 694,000 times and processed over 35,000 transactions. Subsequently, in 2022, the CBN reported the app having processed just a little below $10 million worth of transactions on the platform. As of July 2023, an IMF report revealed that just 0.5% of Nigerians adopted the eNaira and that 98.5% of eNaira wallets remained inactive a year after its launch.
Now in 2024, all the enthusiasm for the digital currency has dwindled, and the eNaira is at best, an obsolete invention. With new administrations at the Federal Government and the CBN, there appears to be seemingly no plans for it, and the project’s future remains unclear and directionless. The phone lines on its official website are unreachable, its social media handles are dormant (its last post on X dates back to August 2023), and all the buzz around it vanquished. In result, what was supposed to be Nigeria’s version of successful Central Bank Digital Currency is now a white elephant.
But What Happened?
Henry Akpan, 25, a recent graduate, downloaded the eNaira app on his mobile device a few days after its launch. Shortly after, he deposited about N5000 in his wallet “to test how it works,” he says. But sooner, he realized that the app was needless for his day-to-day transactions.
“The only way it was possible for me to transfer money from my account to another was if the recipient also had an eNaira wallet, which was most of the time impossible,” shared Akpan.
It was impossible, Akpan says, because not only was the app not popular, but also because there were other “better alternative methods” for online payments. He says he has since then withdrawn his money from the wallet, deleted the app, and never again contemplated using it.
This (adoption), as in the case of Akpan, was one of the main reasons the eNaira failed to pick up, says Folake (first name used only to preserve anonymity), a senior banking professional based in Lagos.
“For banks, there’s some hesitation, as the eNaira was set to disrupt traditional revenue streams,” explained Folake. “Additionally, there’s a lack of incentives for banks to promote the eNaira aggressively. On the consumer side, limited smartphone and internet penetration posed a challenge. And even where access exists, many Nigerians were and still cautious about digital currencies.”
Technically speaking, as explained by a blog post by Cornell University, the eNaira works similarly to traditional digital currencies, but with certain built-in anti-money laundering measures that can feel intrusive to users concerned about privacy. Because the eNaira allows government monitoring of all transactions, the blog reports that some users worried that this control could lead to potential overreach.
This concern highlights a core issue with the eNaira: its centralization. Unlike most blockchains and cryptocurrencies, which emphasize openness, transparency, and decentralization to empower users, the eNaira appears designed to retain significant government authority. The Central Bank of Nigeria (CBN) controls the network’s nodes privately, and transaction details are only accessible to the CBN.
According to Francis Etim, a digital banking expert, this is another reason the eNaira failed to gain substantial momentum.
“When people do not trust the government, how else do you expect them to trust it with their monetary transactions?” asked Etim.
The strict authentication requirements make government tracking straightforward, but there’s minimal accountability to the public. Hypothetically, if the CBN chose to adjust the internal eNaira ledger or alter the money supply, it could do so without public oversight. To the outside world, it operates much like a centralised banking app, giving the government a clearer view of all transactions and ultimately extending its reach over the financial system.
When the CBN first introduced the Cashless Policy in 2012, its aim was to bolster digital payments across the country, reducing cash use in the economy.
This policy, according to Etim, laid the groundwork for digital transactions, and each year since, digital payment methods have gained wider acceptance, with Nigerians increasingly adapting to mobile banking apps, POS terminals, and online payment gateways. This steady shift in behaviour showed a readiness among the populace to embrace digital finance—so long as these methods were convenient, secure, and trustworthy.
However, while the Cashless Policy successfully encouraged Nigerians to move away from cash in many cases, the eNaira struggled to gain similar traction, despite launching in an environment that had grown more receptive to digital transactions.
Users found little reason to use the eNaira when well-established mobile banking apps and fintech services like Opay and Moniepoint offered fast, reliable, and user-friendly payment, transfer, and savings options. “This lack of clear added value over existing digital payment platforms makes the eNaira less appealing to both consumers and businesses,” Etim explained to Social Voices.
Another user, Kingsley Henshaw, a student at the University of Uyo, described his first experience with the app as frustrating. “When I tried to create my account, the code [OTP] didn’t come immediately, and I had to try so many times,” he said. When it was finally done, it just felt like too much trouble for something that was supposed to be simple.”
Christine Vihishima, finance coach at The Inyaregh Brand, listed that other contributing factors to the poor adoption of the eNaira include: Limited Awareness and Education, Trust Deficit, Digital Divide, Ineffective User Experience, Competing Alternatives, Insufficient Incentives.
“At the time the concept of the eNaira was introduced, Nigerians had already embraced private digital payment solutions, such as mobile banking apps, fintech platforms, and established mobile money systems, which were perceived as more efficient and reliable,” Vihishima explained. “There were no compelling incentives for individuals or businesses to transition to the eNaira, particularly when other digital payment systems offered more benefits and ease of use.”
What can be learned from this?
Compared with sucessful CBDCs like China’s digital yuan and the Bahamas’ Sand Dollar, the eNaira’s rollout strategies, extensive pilot testing, and integration within existing financial ecosystems are significantly different.
China’s digital yuan, for instance, was tested in multiple cities with user incentives, while the Sand Dollar focused on addressing financial gaps in rural areas. The eNaira, by comparison, launched nationally with limited phased testing or incentives, leaving it less appealing to users.
Additionally, the eNaira’s centralization and exclusive control by the Central Bank of Nigeria, experts claim, raised concerns about privacy and government overreach. This contrasts with the Sand Dollar, which built trust through a transparent framework, and the digital yuan, which benefits from China’s extensive tech ecosystem and public confidence.
The eNaira’s failure offers several lessons for future digital product initiatives, particularly in emerging economies where digital inclusion and literacy may be limited. One of the foremost takeaways is the importance of building public trust. In the case of the eNaira, government control and centralized monitoring created concerns about data privacy and overreach, leading to resistance among potential users.
As observed by Etim, future digital currency projects will need to address these privacy and control concerns to encourage broader adoption.
Another lesson lies in demonstrating clear added value to both consumers and financial institutions. The eNaira failed to offer unique benefits over well-established mobile banking services and digital wallets, leaving users questioning its utility.
“For any product to succeed, there must be a compelling reason for consumers and businesses to shift from products they already use,” noted Folake. This means that digital currency initiatives must bring tangible benefits, such as lower transaction fees, enhanced accessibility, or incentives that traditional payment options do not offer.
Experts like Vihishima argue that the success of the eNaira needs and extended approach like public education campaigns to raise awareness and build trust through transparency. “ To foster trust and engagement in future digital currency initiatives, the government could launch nationwide campaigns to educate Nigerians about the benefits, security, and functionality of digital currencies,” Vihishima explained.
Other key measures, she adds, include improving user experience, partnering with fintech companies, and offering incentives like cashback rewards. Expanding digital infrastructure and aligning the eNaira with financial inclusion goals, such as offline payment options, are also critical. Lastly, legislative support and stakeholder engagement will ensure policies address security and usability concerns.
A strong and stable commitment from policymakers, alongside a clear and transparent regulatory framework, would have provided greater certainty and confidence in the currency’s future.
“If you want to build something revolutionary, it takes commitment at every level—from the leadership to the end-users,” said Etim. “The success of any technology depends not just on its launch, but on the trust, value, and consistency it brings to people’s lives.”
