Emefiele: e-Naira poses a disadvantage to Nigerian banks

Godwin Emfiele, the governor of the central bank, said that the eNaira currency impacts commercial banks, especially when customers transfer funds to their eNaira wallets from their bank accounts.

The CBN Governor made the comment during the most recent monetary policy communique held on Tuesday. He took advantage of the occasion to discuss many steps being taken to promote the adoption of the digital currency.

Emefiele acknowledged that the eNaira had fallen short of expectations and attributed some of this to the fact that many Nigerians were unaware of the product. He also indicated that the CBN intended to send some of its employees abroad to help with eNaira promotion.

The comment seemed to be a dig at banks and fintech, which the governor now acknowledges are directly competing with the eNaira. The CBN is unmistakably promoting the eNaira as an inexpensive option for the unbanked to deposit their cash as well as a more affordable means of conducting payment transactions.

Emefiele charged banks with being indifferent to their customers' use of the e-Naira. He said that the banks' apathy was caused by their inability to generate significant profits from the e-Naira project at the conclusion of the Monetary Policy Committee meeting.

He urged commercial bank customers to go to their banks and request that their accounts be added to the e-naira wallet because doing business through that channel was the most affordable option available to them.

The CBN Governor claimed that since the e-Naira had nearly no bank fees associated with it, banks would try their hardest to prevent its acceptance.

“I want to advise you, you may go to your bank, they may be a little bit resistant to you because moving that money from your account into your wallet is a disadvantage to them and I want to say that boldly and bluntly. And again, it is almost costless at least today. So you should tell your bank you want your eNaira to be loaded up in your wallet. It will cost you little or nothing compared to those other products that you have that will cost you more,” Emefiele said.

According to Emefiele, the CBN is collaborating with telecom firms to allow them to help bank customers recharge their e-Naira wallets through USSD codes.

Following the CBN's campaign against cryptocurrencies, which it labeled as "unregulated," the e-Naira, introduced by President Muhammadu Buhari on October 25, 2021, was created as an alternative to cryptos. 

The president said that the currency and the underlying block-chain technology can boost Nigeria's GDP by $29 billion over the course of ten years as he unveiled the nation's first digital currency.

He further stated that the e-Naira will promote international trade and allow his administration to deliver direct payments to residents who qualify for particular welfare programs.

Some critics are concerned that the CBN is promoting a product that directly competes with its services. Thus, the issue of a conflict of interest is raised.

Sources within the CBN, however, say that the main focus is on attaining access to financial services, which aims to service the unbanked and lower transaction costs.