Nigeria’s CBDC May Not Succeed — Experts

Nigeria’s CBDC project (e-Naira) might be largely unsuccessful as a result of the existent mistrust between the Nigerian government and its people, says experts.

Mistrust, A Major Threat To The Success of Nigeria’s CBDC

According to an analyst Ronak Gadhia of EFG Hermes, the general belief that the government will have access to all e-naira transactions may just be enough to discourage many from using the e-naira, as a result of the past dealings of the government. Gadhia then said that seeing as the government will effectively be in the know of every transaction its residents carry out, people will definitely be apprehensive and withdrawn about the adoption of the e-Naira.

Reasonably so however, especially because of how the Nigerian government handled matters in a bid to snuff the life out of the recent #EndSARS protests by simply freezing the bank accounts of private citizens who had organized the protests.

Even after expressing his reservations about the prospects of the e-Naira, Gadhia still believes it’s still too early to call it as one can’t be to sure about the digital currency’s potential just yet.

Stiff Competition From Fintech Startups

Away from the mistrust, some experts also believe that though Nigeria’s CBDC is already in a difficult position, things are made even worse by the fact that it still has to put up with fintech startups. Nigeria is home to some of the biggest fintech startups in the continent of Africa, and going by a Financial Times report, this reality poses a real threat to the e-naira’s chances of achieving some of the goals that the Central Bank of Nigeria CBN set out to achieve, including bringing in more people into the financial system among others.

An expert who was quoted in the report by Financial Times expressing his doubts about the e-naira’s chances of succeeding is Adedayo Ademuwagun — an analyst at Songhai Advisory. Ademuwagun, says that a large portion of the goals that the CBN sets out to achieve with the digital currency are already being addressed by privately owned fintech startups.

No matter what it is still too early to dismiss the e-Naira chances, however, time will surely tell.