Nigeria Seeks to Boost E-Naira Users 10-Fold as Cryptos Grow

 Nigeria, which has attracted just 840,000 users for its digital currency since October, is seeking to boost adoption of the e-naira almost 10-fold in the next 12 months by luring people without bank accounts.

The Central Bank of Nigeria is targeting 8 million users in the “second phase” of the digital currency’s expansion, central bank Governor Godwin Emefiele said Thursday in Abuja, the capital.

“Just like the naira, the e-naira is expected to be available to all Nigerians and will provide more possibilities to bring the unbanked into the digital economy,” Emefiele said during the finals of a central bank-sponsored hackathon to build products around the e-naira.

The steady depreciation of the naira has seen many residents of Africa’s most populous nation pivot toward cryptocurrencies, even though the central bank ordered commercial lenders to stop transactions or operations in digital tokens. While there are 270,000 active users of e-naira, as many as 33.4 million Nigerians have either owned or traded cryptocurrencies, according to a report by KuCoin, a Seychelles-based crypto exchange.

The adoption of stable coins like USDT is on the rise in the West African nation, according to Paxful, a peer-to-peer exchange. The average monthly trade volumes increased 10-fold to $25 million in June 2022. Trade volumes for the first half of 2022 are nearly $400 million compared to $760m for last year on Paxful alone.

While the e-naira is an exciting project, accelerating inflation and a weakening currency have deterred its adoption, said Keturah Ovio, chief executive officer of book-keeping startup Dukka. “To drive adoption, the central bank has to take initiatives to drive down inflation and improve trust in the local currency.”

Africa’s most-populous nation has shown more interest in cryptocurrencies than any other country since the digital assets began to decline in April, according to a study by price tracker CoinGecko.

Meanwhile, from Monday, people without bank accounts will be able to download and open an active e-naira wallet by using the unstructured supplementary service data, or USSD, and dialing *997 from their mobile phones, said Emefiele.

Only about 45% of adults in the nation with more than 200 million people have bank accounts, according to the World Bank. That compares with an average of 70% in the BRICS economies. The e-naira has attracted slightly over 200,000 transactions valued at 4 billion naira ($9.4 million), just a fraction of the 54 trillion naira through the Nigeria Instant Payment System between January and February 2022.

The expansion of access to the e-naira platform will further deepen its integration with the existing national payment infrastructure, Emefiele said. Both merchants and consumers with bank accounts will now be able to use the nation’s existing payment mechanism to transfer and receive e-naira.

“We don’t have a choice but to live with the fact that we are now in a digital economy,” Emefiele said. “The use of cash will dissipate to zero and the use of digital currency will increase to become part of our lives.”

Anthony Osae-Brown

Bloomberg

Related story: Thriving Under Pressure: Why Crypto Is Booming in Nigeria Despite the Banking Ban

Police in Nigeria find 20 mummified bodies in ‘suspected ritual shrine’

Police in Nigeria have discovered 20 mummified bodies including those of children in a building in Benin City, in a case that has shocked the country.

Three suspects were arrested during the raid in southern Nigeria, Jennifer Iwegbu, a police spokesperson said in a statement late Wednesday. Armed police officers raided the building in Benin City, the capital of Edo state, acting on intelligence that it was a “suspected ritual shrine”, she said.


“Fifteen mummified male corpses, three mummified female corpses and two mummified children corpses were discovered at the scene”, just three miles (5km) from the city centre, said Iwegbu.

Nigeria’s security forces have in the past uncovered such shrines used by ritualists and kidnappers, but the latest discovery is one of the most shocking in recent years considering the number of victims.

Many residents arrived at the building expressing horror over what seemed to have been an operation hidden away from the eyes of even nearby neighbours.

It is not immediately clear how long the bodies had been in the building and the suspects were being interrogated, the police said. All three were young men, and a police medical team was part of the investigations, Iwegbu said.

“An intensive effort is ongoing to arrest the other fleeing suspects,” she added.

AP

Related stories: Nigerian police identify Lagos, Ogun, Kaduna as hotspots for ritual killings

Nigerian electricity union strike causes nationwide blackout

Striking electricity workers shut down Nigeria's power grid Wednesday, plunging the West African nation's more than 200 million citizens into darkness for several hours, officials said.

The nationwide blackout began in the afternoon moments after the union called a strike to protest non-payment of benefits for former members and other issues related to working conditions, the Transmission Company of Nigeria said.

“Several 330kV transmission lines and 33kV feeder lines across the power system network had been switched off by the union members resulting in ... multiple voltage escalations at critical stations and substations,” company spokeswoman Ndidi Mbah said in a statement,

Mbah said talks with the union had been underway for several days but had not been fruitful.

About 12 hours after the company's statement, power was restored in parts of the country after the electricity workers’ union said it called off the strike.

On social media, many people had voiced their anger and frustration over the strike, which they said worsened the plight of many businesses and homes already running on gasoline-powered generators as a result of inadequate electricity supply.

Such strikes in addition to the poor generation of power and the frequent collapse of the electricity grid have been blamed for the poor electricity supply that has been a decades-long challenge for many Nigerians.

As many as 92 million Nigerians lacked access to electricity in 2020, more than any other country in the world, according to the World Bank-backed Energy Progress Report 2022.

By Chinedu Asadu

ABC News

Emirates to suspend Nigeria flights from September over trapped funds

Dubai's Emirates will suspend flights to Nigeria from next month over an inability to repatriate funds from Africa's most populous nation, the airline said on Thursday.

The decision highlights the difficulties faced by international carriers that fly to Nigeria, which is one of the biggest markets in Africa for several of them.

The country has restricted access to foreign currency for imports and for investors seeking to repatriate their profits due to a shortage of dollars. Nigeria gets about 90% of its foreign exchange from oil, but is struggling to produce due to pipeline theft and years of under-investment.

The International Air Transport Association said in June Nigeria was withholding $450 million in revenue that international carriers operating in the country had earned.


Emirates said it had made no progress in efforts to initiate dialogue with the relevant authorities for their urgent intervention.

"Therefore, Emirates has taken the difficult decision to suspend all flights to and from Nigeria, effective 1 September 2022, to limit further losses and impact on our operational costs that continue to accumulate in the market," it said in a statement.

A Federal Ministry of Aviation spokesperson did not immediately respond to a request for comment.

Emirates had earlier sent a letter to the government saying it could cut flights to Lagos this month because it could not get $85 million stuck in the country as of July, a figure that had been rising by $10 million per month.

Emirates said it would re-evaluate its decision if the situation over the blocked funds changed in the coming days.

Affected customers would be helped to make alternative travel arrangements where possible, it added.

By MacDonald Dzirutwe 

Reuters

Nigeria's Inflation Hits 17-Year High as Food Prices Soar

Nigerian authorities say the country's inflation rate jumped to nearly 20% in July, compared to last year, the highest in nearly two decades. Consumers in Africa's biggest economy are struggling to keep up with rising prices for basic foods.

Nigeria’s National Bureau of Statistics (NBS) said Monday the country’s inflation rate in July was 19.64% - the highest rate since September 2005.

A NBS report found the highest increases were for necessities like food, fuel, transportation and clothing.

Food prices have risen steadily in Nigeria for years, due to the effects of climate change, the COVID-19 pandemic and widespread insecurity.

But in February, when Russia invaded Ukraine, commodity prices soared, affecting the ability of millions of citizens to meet their basic needs.

Abuja resident James Orshio earns the equivalent of about $50 a month from his sales job but said his salary can no longer cushion economic pressures.

"There's a lot of challenges now due to the increment [increases] of prices; I cannot even talk of going to the market now to buy something to feed myself because the prices are not encouraging at all,” he said. “A loaf of bread that used to be 300 naira is now 1,000 naira. Even some of the bakers in Abuja are not working because of the high price."

In a bid to address inflation, Nigeria's Central Bank (CBN) has been tightening monetary policy by increasing interest rates from 11% in January to 14% in July.

Akintunde Ogunsola, founder of Abuja-based financial consulting firm Karma Professional Service, explained the reason for the CBN’s policy.

"What is happening is that we have too much money in circulation chasing a few goods, and that's what causes inflation,” he said. “There is scarcity in supply and that's why CBN is using the open market operation to reduce the money in circulation by increasing [the] interest rate so that people will be saving money back into the bank, like mopping up money from the economy."

Nigeria's import-dependent economy has been further hit by currency devaluation. The naira has lost more than 30% of its value in seven months.

But Ogunsola said inflation nowadays is a global problem.

"It's not only in Nigeria alone that we're experiencing this,” he said. “The United States’ inflation is also going up. Even our neighbors, Ghana, their inflation rate is already over 30%.”

In March, the World Bank estimated that about 4 out of 10 Nigerians live below the national poverty line.

Experts predict the inflation rate will increase further in coming months and may put many more Nigerians on the brink of poverty.

By Timothy Obiezu

VOA