[ACCI-CAVIE] Nigeria has decided to implement its central bank digital currency despite clear signs of discontent from its population. The authorities in Abuja continue to move towards the new eNaira at a rapid pace, more or less following the initial schedule. Along with the digitization of currency exchanges, the government had also planned to renew banknotes at the beginning of the year 2023, but the least we can say is that the operation is not going very well. Between cash shortage and overheating of the system, the economy is seizing up.

A central bank digital currency that does not have unanimous support

Godwin Emefiele is the governor of the Central Bank of Nigeria and he advocates for a central bank digital currency (CBDM):

    “The purpose of the MNBC is to ensure that more people in this country are financially included. A lot has happened in terms of the evolution of money from commodity to metal, then to paper, to plastic and now we’re talking about digital. And so we have to keep up with the evolution of the world.”

The initial idea was basically to fight inflation and simplify the payment systems to promote financial inclusion in the country. You could sum it up as banking the unbanked. In the end, the opposite is true and opponents of the project ironically say that the eNaira is unbanking the banked!

A replacement banknote with unfortunate consequences for the population

In order to push its population to use this new MNBC, the authorities even introduced limitations on cash withdrawals at the bank at the end of last year. This decision did not have the desired effect and instead made the situation worse. But what is currently annoying the inhabitants of Africa’s most populous country is the issue of banknote replacement.

Initially, everyone had to change their 200, 500 and 1,000 naira bills by January 31. Then, on February 13, they were to become legal tender. But in view of the outcry and the amount of money in circulation to be recovered, 10 more days were added. But it is not sure that they are enough to make up for the problems created in such a short time!

Money that costs more than it is worth

Journalists on the ground and Internet users are reporting surreal scenes. There is such a lack of new money that the informal economy has seized up and the whole country is running at a standstill.

Queues are lengthening in front of the country’s banks, which are struggling to meet demand. Worse, the exchange rate between the old and new naira is exploding. One resident said he paid 3,000 naira to buy 20,000 naira. There are problems buying food from people who have money in their bank accounts but cannot withdraw it.

In this monetary chaos, some voices are being raised to ask for change. This is especially true of the national crypto community, which sees the situation as another reason to use Bitcoin. Ironically, between the lack of currency and the ban on crypto in the country, Bitcoin is overpriced compared to the rest of the world! By Ben Canton and LB