CBN preaches eNaira adoption to Nigerian university

A delegation from the Central Bank of Nigeria (CBN) and Zenith Bank, a Nigerian commercial bank, visited the University of Ilorin to promote the adoption of the eNaira — the country’s CBDC — to the management, staff, and students of the university.

The details

• The team held a two-day session with principal officials of the university to convince them to adopt the usage of the eNaira.
• The head of the delegation, Adeolu Fadele, the eNaira project manager at the CBN, said the committee was working on making government disbursements and salaries receivable via the eNaira platform, per a Vanguard report.
• This is particularly crucial because the Academic Staff Union of Universities (ASUU) has been involved in a long-standing face-off with the Federal Government of Nigeria over using the Integrated Payroll and Personal Information System (IPPIS) as a payment platform for salaries.
• The IPPIS is an apparatus of the Accountant-General of the Federation (AGF) responsible for paying government employees’ salaries with the appropriate third-party deductions already made (tax, health insurance, housing, pension, etc.)
• Since the launch of the IPPIS platform, university staff has complained of several issues associated with the platform, such as over-taxing and non-payment of salaries in some cases. ASUU, in particular, has repeatedly rejected the continued use of the IPPIS.
• eNaira Project Manager Fadele mentioned that the team had been engaging with the AGF to look at the Treasury Single Account and work on making disbursements possible through the eNaira platform.
• He, however, didn’t disclose a timeline for the plan to use the eNaira as a payment platform for the salaries of Nigerian university staff would commence.

Key statements

• The university's Vice Chancellor, Professor Wahab Egbewole (SAN), asked the team to work on making the usage of the eNaira accessible to Nigerians outside the country as it could help facilitate easier international transactions.
• In addition, Deputy Vice-Chancellor Professor Abayomi Omotesho noted that if the platform could help ease payments in the university, improve financial inclusion, and provide a source of income for the students, the university would consider adopting it.
• He added that other Nigerian universities would quickly adopt the platform once the salary disbursement issue was rectified and they no longer needed to deal with the IPPIS.

Before now

• The eNaira, launched in 2021, witnessed a relatively slow adoption in its early days. The International Monetary Fund reported that as of November 2022, there were less than one million wallets.
• However, the adoption of eNaira has witnessed an upsurge in recent times. The CBN reported that the transaction volume increased by 63%, with 3.4 billion of the already minted 10 billion eNaira in circulation.
• In addition, 13 million wallets have been created since October 2022. The increase in eNaira adoption could be partly attributed to the CBN’s naira redesign and cashless policies, which saw a considerable decrease in the amount of hard cash in circulation.
• However, Governor Godwin Emefiele of the CBN claimed that the welfare program created by the federal government to aid qualified Nigerians was responsible for the increased transaction volume.