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eNaira: All You Need To Know About Nigeria’s New Digital Currency

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The official website of the Central Bank of Nigeria’s (CBN) digital currency, the eNaira, has gone live, exactly one week to the planned launch of the initiative.

The CBN will launch the eNaira on October 1, 2021.

Let us take a closer look at the eNaira, what it means for you, and how you can position to take advantage of its launch.

What is the eNaira?

eNaira is a central bank digital currency (CBDC) issued by the Central Bank of Nigeria (CBN) as a legal tender. It is the digital form of the Naira and will be used just like cash.

The e-Naira will be a digital representation of the paper Naira currency issued by the CBN. The eNaira will be a “complementary” legal tender in Nigeria, having the same exchange value as the Naira, and maintain a “parity of value” with the Naira. The e-Naira will not earn any interest to holders. The e-Naira is built on a blockchain open ledger technology. Creating the eNaira on the blockchain means you cannot have a duplicate or fake eNaira. Each eNaira note will be unique.

What is eNaira wallet?

The eNaira wallet is a digital storage that holds the eNaira. It is held and managed on a distributed ledger.
The eNaira wallet is required to access, hold and use eNaira.

What makes eNaira different from the money in your bank account?

eNaira is the digital form of cash and is a direct liability on the Central Bank of Nigeria while the customer deposits are direct liabilities on the financial institutions.


Is the eNaira a Stablecoin?

A stable coin is a cryptocurrency backed by reserves. The keyword is reserves, but what kind of reserves? Stable coins are backed by holding an equal equivalent of FIAT money like the US dollar. FIAT means government-issued but usually not backed by any commodity, e.g., gold. Thus a stable coin like USDT is tied to a currency, the US dollar, and maintains a stable exchange value. Note, stable, not immovable. The eNaira technically is linked to the FIAT Naira, but is the Naira stable? Well, not exactly. To be a stablecoin, the eNaira has to be tied to a currency like the US Dollar or Euro or even the Yuan.

How safe is the e-Naira?

Think of the e-Naira in this way; you want to send N100 to an uncle in a remote village without a bank branch. A common practice is to buy mobile phone recharge cards of that value, load them to your phone, and text your uncle. Your uncle can then go to any phone card retailer and discount his N100 mobile phone credit for N95. The mobile retailer can redeem the call credits and pay cash because he trusts the person doing the exchange; however, he cannot tell if the mobile numbers are real.

The eNaira is designed to solve this verification risk by assuring all holders that each eNaira is a valid token. This authenticity is achieved by building the eNaira on the blockchain. Thus instead of buying phone credits, I will debit my bank account for N100, convert to eNaira, and transfer it to my uncle. My uncle can spend the funds directly from his phone or transfer and get cash. Every retailer is more likely to accept the eNaira because it can’t be easily faked.

How will I get the eNaira?

The CBN has planned a rollout in a tiered manner; first, it will issue the e-Naira, to financial institutions like banks. Your bank will then retail the e-Naira to you. If your transaction value is less than N50,000 a day, you don’t need a bank account to get the eNaira; you can use a NIN verified phone number to buy eNaira. If you want to withdraw more than N50,000 but up to the daily limit of N1 million, then you will need a BVN in addition to a NIN verified phone number. The CBN has very strict ‘Know Your Customers” protocols for this process, the aim being to assure all retailers of the safety and utility of the eNaira.

Why should I use the eNaira?

The eNaira has a low-cost advantage when compared to FIAT. The daily transfers between accounts are at no cost to the holder of the account. Lower transaction cost is a massive incentive as traders will pay no fees for withdrawals and deposits to and from their bank account. No transaction fees reduce the cost of commerce while improving safety.

How will dollar remittance to eNaira work?

The e-Naira will be integrated into the CBN’s forex process, and this is to make it easier to receive remittances to Nigeria. These transfers could be from the CBN crediting e-Naira directly to the International Money Transfer Organisation (IMTO). A Nigerian abroad sending $100 to his uncle can debit his US bank account and credit $100 to an IMTO, who will buy eNaira from their corresponding Nigerian bank. The $100 is converted to e-Naira instantly at a far lower transfer fee which is a real benefit and a significant advantage the e-Naira will enjoy.

What about inflation?

The street definition of inflation is too much cash chasing too few goods; however, not all inflation is this simple. Coins in Nigeria are scarce; thus, most merchants round up their prices to match with available currency, usually notes. This rounding up induces an artificial rise in prices because any cost-push does not cause the price hike but other factors, for example, selling eggs for N100 instead of N88. With the e-Naira, it becomes possible to transfer the exact cash price in the marketplace, especially in rural areas. This reduces the possibility of “round-up inflation.”

The eNaira can be the ECOWAS currency

The eNaira can be used by any two parties who can credit a Nigerian banking institution with corresponding currency. This means a trader banking with UBA in Burkina Faso can settle his import bills from the Gambia using e-Naira. This will be the next level of the rollout. The financial institutions and FINTECH start to build out an ecosystem with eNaira as the base product.

The eNaira helps the financially excluded

The e-Naira will also bring in the vast majority of the unbanked Nigerians who have no bank account but have a phone into the formal financial economy. With the e-Naira, salary payments and payments for goods and services can be concluded. A plumber can accept payments on his phone, store them in his wallet, and make transactions with any vendor.

What are the risks?

Data security. The e-Naira is online, the BVN and NIN information is also online, the risk of malicious actors attempting to hack or gain access to the data is very low. The process of minting and burning eNaira tokens by the CBN has to be top-notch.

Overall, it’s a plus to the Nigerian economy, and it’s a positive progression towards a cashless society, with lower costs, and higher productivity.

(Additional information by Nairametrics)

BIG STORY

It’s Idiocy To Claim Buhari Is Dead and Replaced With Jubril From Sudan —- Femi Adesina

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The Presidency has rubbished claims by Nnamdi Kanu, leader of the Indigenous People of Biafra (IPOB), that President Muhammadu Buhari is Jubril of Sudan.

Buhari’s Special Adviser on Media and Publicity said it is “idiocy” to claim that the president is dead and was replaced with Jubril from Sudan.

Adesina disclosed this in his latest article titled, ‘The Essential Buhari: VP Osinbajo got it!.’

He recalls how Buhari, upon return from his medical trip abroad in 2017, recognized him.

The article reads partly: “I remember that day in August 2017, when the President returned to the country finally from his medical vacation. From January of that year, he had been in and out a couple of times, but spending weeks and months outside, attending to his health. And finally, on August 19, he returned home, triumphantly.

“We were at the airport to receive him. I have told the story a number of times, to dispel the idiocy that it was a certain Jibril of Sudan that came back and not Buhari. The daughter of the immediate past Chief of Defence Staff, Gen Gabriel Olonisakin, was getting married. And I had attended both the church service and reception, decked in full Yoruba traditional attire of Agbada and a cap to match. Straight from the ceremony, I went to the airport to join the welcome party for the President.

“We the principal aides were on a line to receive the President as he descended from the aircraft. And he shook hands with each person, having one wisecrack or the other to say, as is typical of him. When he got to me, he said, “Adesina, this is the best I’ve seen you dressed.” And we both laughed.

“Jibril of Sudan? How did he know I was Adesina? How would he know how I normally dressed? Idiocy, I say again. But that is just a digression, not the story I really want to tell to support the topic at hand.”

Kanu had rumoured Buhari’s death in 2017, following the president’s medical trip to London.

He had claimed that Buhari was cloned and replaced with Jubril Al-Sudan after his death.

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BIG STORY

Take Vaccine or Present Negative COVID-19 Result, FG Tells Civil Servants

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The Federal Government has informed federal civil servants that they either get the COVID-19 vaccine or present a negative test result.

Recall that the FG had mandated all civil servants to get the vaccine or else they would not be allowed to enter offices.

The Executive Director, National Primary Health Care Development Agency, Dr Faisal Shuaib, at a press conference, on Thursday, in Abuja, made clear that federal civil servants were not under obligation to take the vaccine, however, they must show negative COVID-19 PCR test.

He said, “The Presidential Steering Committee (PSC), on Wednesday, announced interventions to, not only protect the most vulnerable people in our society but to also ensure that the workplace is safe for all citizens. Clearly, there is a loss of productivity and its impact on socio-economic development when workers are unable to come to work on a regular, and consistent basis due to outbreaks of an infectious disease such as COVID-19.

“Following advice by public health experts, the PSC announced that all Federal Government employees should make a choice as to how they can contribute towards making the work environment COVID-19-free. The logical choice is between taking the vaccine and showing the evidence or presenting proof that one is COVID-19-free by showing a negative PCR test taken 72 hours prior.

“This provision is applicable to all Federal Government institutions. The decision to release the advisory was not taken lightly. It is part of the PSC and Federal Ministry of Health’s mantra to always use scientific evidence to make decisions for the benefit of all Nigerians.”

Shuaib also confirmed that there are enough vaccines to cover the population of employees of the Federal Government and more, stating that the PSC had already done a comprehensive analysis and forecast on the availability of COVID-19 vaccines.

“Based on delivery forecasts from the COVAX facility and African Union, Nigeria will have adequate vaccines to cover more than 50 percent of eligible populations by the end of the first quarter of 2022. In order words, please do not worry about the availability of vaccines because we have the supply chain figured out already,” he added.

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BIG STORY

N4.9bn Fraud: Judge Angry, Slams N200K Fine On Fani-Kayode For Shunning Trial For Fifth Time

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Justice Daniel Osaigor of a Federal High Court in Lagos, on Wednesday, ordered a former Minister of Aviation, Femi Fani-Kayode, to pay N200,000 for not making himself available for re-arraignment for alleged money laundering.

The News Agency of Nigeria reports that Osaigor said he had gone through the court’s file and noted five different letters by Fani-Kayode, seeking adjournment on the same medical grounds.

The court, consequently ordered that he should pay the sum or risk revocation of his bail.

The Economic and Financial Crimes Commission had charged Fani-Kayode alongside a former Minister of State for Finance, Nenandi Usman.

Also charged was Yusuf Danjuma, a former Chairman of the Association of Local Governments of Nigeria, and a company, Jointrust Dimensions Nigeria Limited.

The EFCC preferred 17 counts bordering on N4.6bn money laundering against them before Justice Mohammed Aikawa.

They had all pleaded not guilty and were granted bail.

The trial had begun before Aikawa and witnesses being led in evidence before the judge was transferred out of the Lagos jurisdiction of the court.

The case was consequently assigned to Justice Osaigor and the defendants scheduled for re-arraignment on Wednesday.

When the case was called on Wednesday, Mrs Bilikisu Buhari, announced an appearance for prosecution.

Mr I. J. Ogechukwu appeared for the first defendant (Usman), Mr B. F. Ajudua appeared for the second defendant (Fani-Kayode) and Y. Olabode appeared for the third and fourth defendants.

Buhari then informed the court that on July 15, the prosecution asked the court to adjourn the matter for re-arraignment of the defendants.

She told the court that on October 11, the prosecution received a letter from the second defendant informing them that he had been given bed rest.

“Whenever he doesn’t want to attend court, this is the type of letter we get,” Buhari said.

However, Ajudua told the court that although his Fani-Kayode’s illness was recurring, he had attended court regularly.

After the judge went through the court’s file, he asked his counsel to take one of two options: revocation of Fani-Kayode’s bail or imposition of N200,000 fine to be paid before the next adjourned date.

The counsel chose the fine option.

Justice Osaigor adjourned the case till November 30.

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