The eNaira as a Tool for Financial Inclusion: Challenges and Recommendations

Abstract

Following the COVID-19 crisis, digitalisation and using online payment systems rather than cash accelerated. With this, the relevance of  Central Bank Digital Currencies (CBDC) became even more pronounced, spurring Nigeria to launch the eNaira. Yet, it remains to be seen  whether there will be a broad acceptance of the eNaira in Nigeria. The Central Bank of Nigeria (CBN)'s primary goal in launching the  eNaira is to increase financial inclusion in Nigeria. While millions of Nigerians have access to financial products and services, the Foreign  Commonwealth and Development Office (FCDO) estimates that about 38 million adult Nigerians do not have access to essential financial  products and services. The eNaira could fill this gap. The paper considers whether the e-Naira can drive financial inclusion in Nigeria. To  do this, it examines the eNaira to determine whether its qualities as a CBDC can drive financial inclusion. The paper also assesses the  success or lack thereof of the eNaira and the challenges of implementing it in Nigeria. Based on this assessment, the paper makes some  policy recommendations to enable e-Naira to gain more acceptance in Nigeria.