Browsing: eNaira

Kenya has not been left behind in the growth and development of technology. East Africa’s richest economy stands tall in the development of digital technology. However, a lot needs to be done, and the new administration has enough space to execute its plan regarding the advancement of the Kenyan digital space.

In October 2021 Nigeria became the first country in Africa and of among few in the world to issue a digital currency that was dubbed ‘eNaira’.

Financial experts say the digital currency issued by central banks cut transaction costs and increase financial inclusion.

Maurice Muhiza Rwamigabo, Head of Exploration & Coordinator at the Accelerator Lab (an innovation and technology lab) of the United Nations Development Programme (UNDP) in Rwanda, said in an opinion article titled ‘Should Rwanda adopt a national digital currency?’ that if Rwanda wants to restructure its financial system and position itself as an important player in the future global economy, it should systematically assess and take the steps needed to develop its own Central Bank Digital CBDC. 

“A CBDC would offer Rwandans a safe, free, and easy alternative to cash. It would expand financial inclusion by enabling more of the unbanked population to participate in the formal economy,” explained Rwamigabo.

The question is, what if one day you went to pay for expenses with your card or mobile app and it returned an error message? Or was your service provider that issues your money declared bankrupt? Scary, right?
Recently, customers have been converting their regular traditional money into e-money. Service providers have enabled the transfer of electronic money to banks, from person to person, and for making payments.
For regulators and supervisors that control the protection of consumers’ e-money and digital currencies, coming up with legal bindings and restrictions in the fast-changing sector has become very challenging. These regulators and supervisors must devise ways to protect customers from a possible system failure and ultimately prevent them from losing their funds.

Whether Nigeria and Ghana will abandon their digital currencies and jump on the Eco train is an unclear narrative, but it appears unlikely because of the significant investments put into them and the optimism by the governments to embrace digital transformations.

Nigeria had banned cryptocurrency transactions in February last year which increased the popularity of the eNaira as an alternative for cross-border trade and remittance inflows.

eNaira critics say that the solutions being offered by the digital currency are already existing in online banking and bank card transactions.