In an effort to drive a cashless economy, the Central Bank of Nigeria has suggested the use of eNaira for cash transfers during the National Social Safety Net Programme Scale Up.
This was according to the National FinTech Strategy document obtained from the website of the CBN.
The strategy document was created by the National Financial Inclusion Steering Committee, chaired by the CBN Governor, Godwin Emefiele.
The document revealed that the eNaira can be pre-programmed for payments to the poor and vulnerable on the social register.
It read, “The central bank can use a pre-programmed eNaira to pay intended beneficiaries on the social register, which could be accepted only for a specific purpose and at specifically authorized locations.
“This use case will ensure the proper use of social funds, ensure high-quality data can be collected on the performance of these programs, and help to prevent leakage or diversion of funds. This capability could be extended to other use cases in financial services and related ecosystems, where there exists a priority to maintain the integrity of funds and the purpose for which it is used.”
The CBN launched its Central Bank Digital Currency, eNaira, on October 25, 2021, to drive financial inclusion, payments systems efficiency improvements covering remittances and social intervention, and revenue and tax collections.
The document noted, “In Nigeria, the eNaira objectives include monetary policy effectiveness, financial inclusion, payments and remittances efficiency (domestic and cross-border) and government payments.”
The National Social Safety Net Programme Scale Up, which will cost $800m, is expected to take off in 2023 immediately after the National Assembly approves it.
The PUNCH confirmed on the World Bank’s website that the NASSP-SU was approved by the bank on December 16, 2021, and will run till June 30, 2024.
The $800m programme is to be implemented by the Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development.
Data from the National Social Safety Net Coordinating Office show that there were about 12.06 million poor and vulnerable households, which include 49.81 million individuals in its database.
In January last year, the National Coordinator, National Social Safety Nets Coordinating Office, Mr Apera Iorwa, in an exclusive interview with The PUNCH said that the Federal Government disbursed about $300m to the poor and vulnerable in its National Social Register through N5,000 cash transfers in four years.
He also disclosed that two million households had benefitted on an average of five individuals per household, which is about 10 million individuals.
The NASSCO was established in 2016 by the Federal Government, alongside the World Bank, to strengthen the social safety nets and social protection system in Nigeria in order to help end extreme poverty and promote shared prosperity.
The World Bank offered a credit of $500m to support the social safety net programme, which ended in June 2022.
However, Iorwa disclosed that another $800m had been approved by the World Bank to extend the support programme to 2024 in a way that would benefit 8.5 million more Nigerians.
Also, in a recent Bloomberg report, it was noted that in an effort to create an efficient digital currency and ensure mass adoption, the CBN has contacted a New York tech firm to revamp the underlying technology.
According to the February 21 Bloomberg report, the CBN is in talks with new “technology partners” to develop a new and enhanced system to manage the eNaira.
It was reported that the apex bank has discussed these plans with the New York-based technology firm, R3.
The report claimed that the new software for the eNaria will be created to allow the CBN to have complete control over the initiative.
It was also noted that the effort to create the eNaira began in 2021, with the help of the financial software company, Bitt.
The report stated that the new partner won’t immediately take Bitt’s role but will help phase in total control for the central bank.
Reacting to this, Bitt said it was aware that the CBN works with various partners for its technological innovations.
It affirmed that it still works closely with the CBN and is “currently developing additional features and enhancements.”
Although it is one of the first countries to have launched a Central Bank Digital Currency, Nigeria’s eNaira got off to a sluggish start, with low adoption.
The PUNCH recently reported that since its launch in 2021, the usage of the eNaira — Nigeria’s digital currency — has failed to pick up, according to the International Monetary Fund.
According to the fund, only about eight per cent of eNaira wallets are in use, with an average transaction value of N53,000.
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