Unmask NG understands that within a period of six years that Buhari rode into power on the promise of making naira stronger as against the dollar, the local currency had lost its value by at least 250%.

However, as the Central Bank of Nigeria (CBN) launched Africa’s first-ever digital currency in Abuja yesterday (Monday, October 24, 2021), there was excitement among the citizenry, as many opined that the newly-floated eNaira would save the naira.

But financial experts and market analysts thought otherwise, as they all shared the same sentiment on the topic.

According to them, the eNaira would not change or affect the value of the naira in the foreign exchange market.

The immediate past Director-General of the Lagos Chamber of Commerce and Industry, Dr. Muda Yusuf, said there was no relationship between the foreign exchange market and the eNaira.

He said, “There is no connection between the eNaira and the exchange rate. No relationship at all. The exchange rate is determined by the demand and supply fundamentals in the foreign exchange market.

“These are driven largely by imports, exports, and the flow of capital across borders. The naira, whether digital or physical, is just a means of exchange and to some extent, a store of value.”

He, however, noted that the eNaira was consistent with the current digitalisation trend across all sectors globally.

Yusuf, who is the chief executive officer, Centre for the Promotion of Private Enterprises (CPPE), explained that digital applications typically came with efficiency, cost-effectiveness, smartness in usage, and convenience.

“But it is still not clear what the value proposition of the eNaira is, beyond the psychological satisfaction of joining the league of countries with digital currencies,” Yusuf stated.

The CPPE boss noted that transactions on these platforms were already in trillions of naira, and still counting, adding that it remained to be seen what additional value the eNaira would bring.

He said, “A great deal of sensitisation and awareness need to be undertaken to generate trust and confidence in this new payment system initiative.

“International investors typically would prefer a currency that is acceptable globally and convertible such as the dollar.”

Corroborating Yusuf’s claim, Dr. Olalekan Aworinde, a senior lecturer at the Pan Atlantic University, explained that there was a need to do more sensitise the public more on the risks.

He said, “I think that the CBN should be aware of the fact that there is the risk of cyber attacks with the introduction of the eNaira.

“As a result, the CBN needs to properly educate the masses on how to use the eNaira in a way that would not put their safety and the safety of their funds at risk.

Another expert and the Chief Executive Officer of SD&D Capital Management Limited, Idakolo Gbolade, also said there was the need to sensitive the public more.

Dollar to naira exchange rate for Monday, October 24, 2021

Data from FMDQ securities exchange windows, where forex is officially traded, showed that naira exchanged hands with the foreign currency at N415.07 to a dollar on Monday, October 24, 2021. The same rate it exchanged in the past two sessions (Thursday and Friday) last week.

At the black market in Uyo, dealers said they exchanged dollar to naira at N560.00, as against the N565.00 it exchanged last week’s Friday.

“Dealers here are skeptical of buying the dollar due to the launch of the eNaira, they don’t want to buy and lose,” a dealer who does not want his name mentioned, was quoted as saying.

While at Abuja, dealers exchanged dollar to naira at the rate of N568.00.

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Speaking at the official launch of eNaira in Abuja on Monday, October 25, 2021, the president stated: “We have become the first country in Africa, and one of the first in the world to introduce a Digital Currency to her citizens.”

He added that the adoption of the Central Bank Digital Currency (CBDC) and its underlying technology, called blockchain, can increase Nigeria’s GDP by $29 billion over the next 10 years.

According to Buhari, the introduction of the eNaira would enable the government to send direct payments to citizens eligible for specific welfare programmes as well as foster cross border trade.

President Buhari said that alongside digital innovations, CBDCs can foster economic growth through better economic activities, increase remittances, improve financial inclusion and make monetary policy more effective.

”Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of and concerns of the economy.

”The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country,” he said.

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