By Elizabeth Chukwuma
When Ngozi Okonjo-Iweala, a former minister of Finance and Coordinator of the Economy during the Administrations of former Presidents Olusegun Obasanjo and Goodluck Jonathan and now Director General, World Trade Organisation, WTO, asked President Muhammadu Buhari to approve the use of the digital currency in trade transactions, Central Bank of Nigeria, CBN, including Godwin Emefiele , had laughed at her. This is because of their strong opposition to the use of crypto currency in trade transactions in Nigeria.
Okonjo-Iweala,the WTO, Director General, may have read the hand writing on the wall that Nigeria which is the largest economy in the African Continent may lose out in trade and investment opportunities if it fails to adopt the digital currency to boost its e-commerce.
She was said to have told the Kastina state born Nigerian President that ’’to enhance the country’s investment facilitation, the government has to cut down on trade costs, ranging from infrastructural costs, regulatory costs, linkage costs, to Customs costs. This is in addition to reducing other costs associated with moving goods from the factories, farm gate, to the final consumer. She had painted the sorry state of the trade costs between Nigeria and her trading partners which she had said was slightly above 306 percent.
Recall that prior to the WTO Director General advice to the Katsina state born Nigerian President to approve the use of digital currency payment systems trade transactions, the Emefiele led apex bank had turned the mind of the Nigerian President against it, insisting that it was not the best for the country . Although, he agreed that ‘’some of the crypto currency firms are Legitimate but much are more illegitimate’’.
The CBN, had shown that it was in support of the use of the digital currency payment system in trade transactions which is gradually dominating the world economy. On January 5, 2021, the Regulatory bank Authority had released a circular addressed to the Commercial banks and other Financial Institutions across the country that transactions in crypto currencies and facilitating payment for digital currency exchanges were prohibited.
The banks and Financial Institutions were also asked to ‘’to identify the individuals or Corporate entities that transact business on crypto currency or operate crypto currency exchanges and close such accounts’’ thus, forcing many who were into the digital currency trading business to go underground to escape arrest.
An iInformed source had told The Value News that when it became clear that the CBN, could not effectively control those still trading on crypto currencies,in the country, the CBN governor, had no option but to draw the attention of Hajia Zainab Ahmed, minister of Finance, Budget and National Planning and who in turn had reached out to the retired Army General, on the need to do a rethink on the digital currency for payment system for trade transactions. The duo were said to have agreed to Emefiele’s suggestion that Nigeria should cue into the new technology to avoid being left behind by the world.
It was, therefore, not surprising that based on the favourable response from the Nigerian President towards the use of crytocurrency payment systems in trade transactions, the CBN, governor was digital currency for trade transaction payments systems.
The insider source had told The Magazine that the government may have been forced to drop its hardline position against the use of the digital currency payment system in the country because Elon Musk, the Chief Executive Officer, CEO, of Tesla, had cried out to the government that the country’s banking and payment facilities are no longer available for crypto currency transactions which was not good enough for the businessmen.
He was said to have promised to invest $1.5billion in the crypto currency market in Nigeria which was said to have pushed the price of Bitcoin which staff had said he supports., there are other cryptocurrrency sources of payment systems such as Litecoin , Ethereum and Bitcoin Cash, that may have benefited from the Bitcoin price increase as Musk, who many believe was worth $300million promised to make the $1.5 billion investment into the Nigerian crypto currency which would have adversely affected the naira in the Foreign Exchange market that may force the CBN, to thinker with the option of devaluing the currency again.
It is instructive to note that Musk, the Tesla, CEO, had earlier challenged the Nigerian government that ‘’if it could ban the use of crypto currency in trade transactions payments, it should have also considered it necessary to provide an alternative for the Nigerian Youths to do their business but failed to do so’’. Emefiele, the CBN, governor, described as the ‘’big boss’’, in crypto currency trading circles , may have gotten the message loud and clear that naira may be crashed by Multi-billionaire Musk that he has to act fast’’ to make it happen in Nigeria’’.
The fallout was that on Monday, October, 24, 2021, the Nigerian President launched the CBN e-naira crypto currency, stressing that ‘’the adoption of the digital currency would increase the country’s Gross Domestic Product, GDP, by $29 billion over the next 10 years’’.
Given an insider information, he had said that the approval was given to the CBN ‘’to roll out the e-naira, digital currency as the leading innovator in the form of the money they produce and in payment services they deploy for efficient transactions’’. He noted that ‘’the apex bank had invested heavily in the top ten countries in the world to roll out the country’s digital currency’’. Emefiele, the CBN, governor, had alluded to this recently.
Recall that the Nigerian President, who was acting on the advice of the CBN, governor was initially opposed to the adoption of the e-naira crypto currency but could proudly tell the International Community that Nigeria has become the first country in the African Continent and the world in general to introduce the digital Currency for trade transactions.
According to him, the new payment system which has taken four years to crystalise will ’’drive financial inclusion, serve as a backbone for electronic payment in Nigeria and also enable the movement of more people from the informal to the formal sectors of the economy that would scale up the tax base of the country’’.
Emefiele, may have alluded to the huge investment on the e-naira digital currency this when he stated that ‘’it was product of several years of research’’. He may have gladdened the heart of Nigerians when he said that ‘’it will advance the boundaries of payment systems in order to make financial transactions easier’’. He may have gladdened the heart of Nigerians when he vowed to ensure that ‘’ the e-naira, like the physical Naira will be accessible to everyone to do their business transactions and payments with ease’’.
An elated Buhari had said that the CBN digital currency has two applications: Naira speed wallet and Naira Merchant wallet. The two Applications were Launched on Goggle Play store and Apple play store at the state House last Monday amidst applause, Abuja, the Federal Capital Territory, FCT, by dignitaries who were at the event.