Buhari Launches eNaira, Says Digital Currency Will Stimulate GDP Rise
• As CBN warns Nigeria will not spend forex on cheap imports
President Muhammadu Buhari on Monday launched the Central Bank Digital Currency (CBDC), which is known as eNaira as part of the efforts to ease the payment system and transactions.
This was as the Central Bank Governor, Mr. Godwin Emefiele, also warned that the country will not waste the nation’s scarce foreign exchange on cheap imports.
Buhari while launching eNaira said its introduction will see to the rise of Nigeria’s country’s Gross Domestic Product (GDP).
According to him, it is projected that with e-Naira, Nigeria’s GDP will rise by $29 billion in the next 10 years.
He also said that Nigeria is so far the first country in Africa and among the first in the world to introduce digital currency.
Buhari said, “Indeed, some estimates indicate that the adoption of CBDC and its underlying technology, called blockchain, can increase Nigeria’s GDP by US$29 billion over the next 10 years.
“CBDCs can also help increase remittances, foster cross border trade, improve financial inclusion, make monetary policy more effective, and enable the government to send direct payments to citizens eligible for specific welfare programmes.”
Tracing the journey of CBDC to 2017, he assured Nigerians of the safety.
He also disclosed that work intensified over the past several months with several brainstorming exercises, deployment of technical partners and advisers, collaboration with the Ministries of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission (NCC), integration of banking software across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System.
He explained that his support for digital currency was based on the fact that in recent time, use of physical cash for payments has been on the decline, adding that the Covid-10 pandemic worsened the situation.
The CBN as part of promoting the e-Naira said charges on such transactions would be free for the first 90 days.
This was contained in a circular on the eNaira, issued on Monday and signed by the Director, Financial Policy and Regulations Department, Chibuzo Efobi.
The circular said the digital currency would now complement cash, adding this was less costly, more efficient and generally accepted.
The CBN Governor also assured that there was enough foreign exchange, adding that there was no cause for alarm.
Emefiele said that instead the FX is getting “stronger the crossing the $40 billion mark and one of the highest in Africa – and growing”.
But he said that such FX will not be used to finance cheap imports but will be used to support the right companies and projects.
He said “we will see a significant, measurable and verifiable increase in local production and productivity, reduction in certain imports, increase in non-oil exports, and improvements in the FX-generating capacity of the economy.”
“Instead, what we have seen is widespread import dependency, which have wiped out most of our production and manufacturing bases and exported all our jobs in the process,” he said.
“What has happened to the massive textile factories across our nation, such that we import almost all cotton products when we are rich in cotton?
“What has happened to our vehicle assembly plants across the nation such that we import most vehicles and have become a massive dumping ground for dying second-hand vehicles?
“What has happened to our rubber plantations through which we made the best tyres and rubber products in the world? What has happened to our groundnut pyramids? What has happened to our cocoa farms? What has happened to our palm oil mills?”
“We must return to massive home-made production; we must get our people working again. We must create the economic environment for massive domestic production and significant non-oil exports.”
“If you consume cheap imports and export our jobs, we will make you pay dearly; but if you produce locally – with little or no foreign inputs beyond machinery – we will support you, and the markets will reward you abundantly.”
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