Emeka Okoroanyanwu
eNaira ran into hitches a few days after launch prompting App Stores like Google to pull it from their stores amid poor reviews.
A few days after its launch in Abuja by President Muhammadu Buhari, the Central Bank of Nigeria’s (CBN) digital currency, the eNaira ran into troubled waters raising fears among stakeholders that fraudsters may have penetrated the system.
But in an apparent move to curtail any further damage, the CBN last week rang alarm bells over fake social media handles of eNaira, saying impostors were already defrauding Nigerians and advising members of the public to always endeavour to seek clarifications on information about the digital currency either by visiting the eNaira website: www.enaira.gov.ng or calling the eNaira contact centre on 080069362472 or visiting any CBN branch nearest to them.
The CBN gave out the official social media handles of the eNaira as www.facebook.com/myenaira; www.instagram.com/myenaira and www.youtube.com/myenaira advising that any suspicious activity by members of the public be reported to it using helpdesk@enaira.gov.ng or to relevant law enforcement agencies.
The apex bank warned Nigerians to beware of some fraudulent individuals using a twitter handle, @enaira_cbdc purported to belong to the bank to spread false information.
The Bank in a statement on Wednesday, explained that the impostor handle was posting messages related to the eNaira with the intent of wooing unsuspecting Nigerians with claims that the CBN was disbursing the sum of N50 billion eNaira.
The statement which was titled, “Beware of fraudsters, fake eNaira social media handles,” read in part, “Following the formal launch of the eNaira on Monday, October 25, 2021, the attention of the CBN has been drawn to criminal and illegal activities of some individuals and a fraudulent twitter handle, @enaira_cbdc purported to belong to the Bank.
“The impostor handle and fraudulent persons have been posting messages related to the eNaira with the intent of wooing unsuspecting Nigerians with claims that the Central Bank of Nigeria, among other falsities, is disbursing the sum of 50bn eNaira currency.
“These impostors are bent on defrauding innocent and unsuspecting members of the public through the links attached to their messages for application to obtain eNaira wallets and become beneficiaries of the said 50bn eNaira currency.”
The apex bank said it would not bear any liability for any interruption, loss of revenue or loss of services arising from the use of the eNaira website.
The warning from CBN which some stakeholders said was in bad faith given that it was the CBN that opened the website came as the eNaira speed wallet disappeared from the Google Play Store 48 hours after it was launched by President Muhammadu Buhari in Abuja and after over 100,000 users had downloaded it.
Buhari had at the launch eulogized the e-currency, saying it would 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.
The digital currency, he noted would help move many more people and businesses from the informal into the formal sector, thereby increasing the country’s tax base.
The following day, over 100,000 downloads were recorded on the eNaira app amid negative reviews and low rating. But Wednesday, the eNaira wallet was removed from the Google Play Store. This was after a gall of criticisms followed currency launch.
However, just like the Biblical Pontus Pilate, spokesperson for the CBN, Mr. Osita Nwanisobi, washed the apex bank’s hands off the disappearance of the Google app and the fraud that had followed it.
He said: “There is an upgrade going at the moment by Google; try in the next few hours,” even as the bank had warned users that would not be held liable for the loss or corruption of data.
CBN warned, “In no event will the CBN or its directors, officers, employees, independent contractors, affiliates or agents, or any of its or their respective service providers, be liable to you or any third party for any use, interruption, delay or inability to use the eNaira website, lost revenues or profits, delays, interruption or loss of services, business or goodwill, loss or corruption of data, loss resulting from system or system service failure, malfunction or shutdown, failure to accurately transfer, read or transmit information, failure to update or provide correct information, system incompatibility or provision of incorrect compatibility information or breaches in system security, or for any consequential, incidental, indirect, exemplary, special or punitive damages, whether arising out of or in connection with the use of the eNaira website.”
A Lagos-based lawyer, Inibehe Effiong, said the CBN’s attempt to shift liability was illegal.
Effiong said, “The limitation of liability clause is obnoxious and unnecessarily draconian. The manner in which it is drafted is suggestive of the fact that the CBN has no confidence in the durability, credibility and reliability of the eNaira website. If commercial banks are to be held liable for losses incurred by their customers, there’s no reason by the CBN to be accorded absolute exemption from liability.
“Part of the problem with the eNaira is that the role of the CBN is conflicted. The CBN is established primarily as a regulatory agency with limited allowance for commercial particularly governmental and intergovernmental transactions.
“Since the eNaira is a product of the CBN and not essential controlled by commercial institutions, the CBN should bear some form of responsibility for the use of the eNaira platform.”
As at Wednesday last week when the eNaira speed wallet had disappeared from the Google Play Store, the eNaira merchant wallet, which is designed for businesses, was still running and had over 10,000 downloads.
To access the eNaira, users have to download the ‘speed wallet’, which allows them to conduct transactions with speed and ease. It is a digital storage that holds the eNaira and is held and managed on a distributed ledger. Before it disappeared, the speed wallet had a rating of 2.0 from 2, 150 reviews as of Tuesday evening with many complaining of glitches.
A mobile developer said an app could be missing on the store for a myriad of reasons. According to the developer, it could be because the app has flouted one of Google’s policies or because the developers took it down.
The developer said, “If the developers removed it, it could be that the app was not functioning as expected or they realised it was violating a google policy. If it was Google that removed it, it is either they were reported or/and violated a policy.”
When asked if Google could upgrade an app, the developer said, “No, they can only give guidelines except Google was the one that developed it.”
Before the launch of the eNaira last week by President Buhari, the Director, Information and Technology, CBN, Rakitya Muhammed, had told Nigerians that the adoption of the digital currency would boost cross-border trade and enable the apex bank to formulate better macroeconomic policies.
“If people adopt more of the usage of e-Naira, then we will be able to have more data to formulate better macroeconomic policies.
“And when countries come on board and create their own digital currencies then we will be able to have a faster exchange of currencies and therefore we might be able to boost cross-border trade at a much lower cost.
“Of course, payment efficiency, even though we know that Nigeria has one of the best payment systems in the world, we will still be able to improve on that.
“We believe that e-Naira will be a catalyst for the digital economy because the people who are outside the formal banking sector will be integrated” she said at the Third Quarter Industry Forum of the Committee of E-business Industry Heads, CeBIH held in Abuja on Wednesday, September 22, 2021.”
How eNaira works
On how the e-currency would work, the apex bank had said it would in the interim issue a three-tier consumer “speed wallet” system before banks and other licensed operators can provide their own wallets for the e-Naira.
The tier 1 wallet is open to anyone without a bank account. It also comes with a transfer limit of ₦50,000 and a cumulative balance of ₦300,000 fixed daily. The minimum requirement to open this wallet is a National Identity Number (NIN).
For tier 2 wallets users, an existing bank account with a linked Bank Verification Number (BVN) is the minimum requirement for this level. Users are restricted to sending and receiving ₦200,000 daily and having a balance of ₦500,000.
Tier 3 wallet holders can transact up to ₦1,000,000 daily with the cumulative balance set at ₦5,000,000. At least a BVN is needed to get this wallet category.
Transaction limits on merchant-level wallets are also set at ₦1,000,000 per day, though there are no limits to how much users can have in their accounts.
The e-Naira also has a non-interest-bearing CBDC status and in addition, there won’t be charges on merchant services, user-to-merchant, and peer-to-peer wallet transactions.
The zero charges also apply when users send money from their wallets to bank accounts and make withdrawals at agent or merchant locations.
The banking regulator notes that the e-naira system, being a National Critical Infrastructure, will be subject to comprehensive security checks.
According to the CBN, Nigerian banks are to market and promote the adoption of e-Naira as a digital version of cash to existing and potential customers, in support of the financial inclusion objective of the CBN.
Benefits of the e-naira
The apex bank, while announcing the launch highlighted the numerous benefits of the e-Naira.
According to the CBN, the e-Naira would be a Central Bank Digital Currency (CBDC), meaning that while it is regulated by the CBN, it is a token that would only exist in digital and electronic form.
Similarly, the e-Naira would also be eligible for local and international transfers with little to no time lag and cheaper transaction fees than physical currencies. Also, it would allow you to transfer existing funds in your bank to your digital currency account.
With the e-Naira, Nigerians can engage in easier cross-border trade, as well as enjoy a cheaper and faster inflow of remittances. Also, a digital currency would provide more financial opportunities for Nigerians as they would be able to create new business opportunities and financial products and services.
According to the CBN, another perk of the e-Naira is a reduction in the cost of operations and cash management. It would also leave a clearer footprint of digital transactions, making it easier for financial institutions to track transactions.
eNaira, the digital currency would be implemented through a two-tiered model which would enable a structure that leaves room for public-private partnership. Just like the physical currency, the CBN will design the e-Naira but disseminate it through regulated financial institutions, which would then provide digital cash to individuals and businesses.
The e-Naira would be regulated by the Central Bank of Nigeria, but cryptocurrencies are not regulated by any government.
According to the CBN, the e-Naira will aid financial inclusion and propel a cashless policy.
Alarm bells sound
Some financial experts had expressed reservation over the currency. Their major grouse is that the e-Naira is primarily transactional and does not appreciate or attract interest unlike other digital currencies like bitcoin, adding that the average Nigerian may not be interested in it.
According to Adeyemi Atanda, Chairman, CeBIH, there must be an attraction for people to keep money in naira, but the e-naira has no such attraction.
READ ALSO: eNaira app pulled from Google Play store over poor reviews
“When you hear e-Naira, think transactional not investments. That is where a lot of people are mixing it up, you can’t compare it with crypto. Crypto is not primarily transactional, it is investments primarily. e-naira is primarily transactional,” he said.
Atanda also feared that banks would lose some of the liabilities (deposits).
“The liabilities that we sit on today will be moved from naira where we can use it easily to digital currency, so we lose liability, but, again, it is a function of how creative we get as bankers” he disclosed.
The chairman, however, stressed that the e-Naira, however, has more benefits than negatives. He argued that the platform can bring a lot of cash circulating outside the banking sector, which is about 85 per cent, into the financial sector.
On his part, Chimezie Chuta, coordinator, blockchain Nigeria User Group stressed that the e-Naira will not solve the problem of financial inclusion in the country.
He opined that CBN introduced the digital currency to address the encroachment of private e-currencies, but said the solution is weak as the e-Naira does not address the key drivers of private e-currencies.
“I personally don’t think it will drive financial inclusion; it won’t drive that. You need to have money, a source of income to have a bank account. An average Nigerian will not buy into e-Naira because of banking services”, he said.
Chuta however said the e-Naira will save the huge cost on printing, management and distribution of the naira.
Similarly, Dr Omobola Adu, a Research Analyst at GDL is also sceptical about the innovation, he does not think the introduction of a digital currency would strengthen the value of the Naira.
“The eNaira is just a digital representation of the Naira itself, so it doesn’t strengthen the value of our currency.
If I say 5 e-Naira is N5,000 today, what will make one e-Naira be N5,000 tomorrow will be the attractiveness of our currency and what we produce (existing factors). The existing factors (demand and supply) plus production levels will continue to be the major factors driving the value of the Naira,” he opined.
He, however, said the e-Naira was a good initiative in the sense that in the next couple of years, the global economy should be moving to digital currencies.
