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Emefiele Lists Limitations To A Fully Digitized Financial Ecosystem

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The Governor of the Central Bank of Nigeria (CBN) Mr. Godwin Emefiele on Tuesday listed impairments stacked against widening the digital economic space that should be demolished to deepen the global competitiveness of the country.

Fidel Info reports that while speaking at the 2022 Executive Policy Seminar of the CBN themed: “Digitalisation of Money and Monetary Policy in Nigeria”, Emefiele, who was represented by the Deputy Governor of Financial Systems Stability (FSS), Mrs. Aisha Ahmad, noted that the existence of low level formal financial services, low income and financial illiteracy, underdeveloped technology ecosystem and weak infrastructure, continue to limit the potential for integration of digital financial services in Nigeria.

Without Prejudice to the  success recorded so far in the digital transformation journey of the financial sector and economy in general, he inferred that there was still much work to be done.   He said: “Although considerable gains have been achieved in boosting financial inclusion in Nigeria, at 64.0 per cent, the inclusion rate slows down the digital transformation wheel, as all citizens must be carried along to optimize the gains of a digital economy”.

Emefiele stated that the major turning point in the Bank’s digitization journey in the last decade, was the launch, on 25 October 2021, of the eNaira, Nigeria’s central bank digital currency (CBDC).

“The eNaira was developed to broaden the payment possibilities of Nigerians, foster digital financial inclusion, with potential for fast-tracking intergovernmental and social transfers, capital flow and remittances, among other endless possibilities.

“Since its launch, a total of N8 billion, consisting of over 700,000 transactions, has passed through the eNaira platform. As part of the Bank’s effort to further integrate and broaden the usage of the eNaira, it was assigned an Unstructured Supplementary Service Data (USSD) code, enabling payments by simply dialling ‘*997#’ on a mobile phone”.

He noted that the digitisation of money has been aided by a myriad of factors, including internet penetration; cloud computing; big data analytics; advancements in artificial intelligence; and the emergence of distributed ledger technology (DLT); among others.

“In addition to the afore-mentioned drivers, the COVID-19 pandemic also accelerated the shift to digital payments, beyond the obvious advantages of a digitally driven payment system, leading to greater economies of scale and scope, network externalities, and low marginal costs”, he stated.

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