The Central Bank of Nigeria (CBN) has assured Nigerians and other would-be users that the eNaira, Nigeria’s soon-to-be-launched digital currency, can be used by the government for direct payments to citizens eligible for specific welfare programmes.
The apex bank, in a document titled ‘Design Paper for the eNaira’, indicated that the digital currency would make it possible for government to make targeted welfare payments to citizens directly, without the need for any intermediary.
It noted that over the past months, COVID-19 pandemic had posed a challenge to the global payment system, especially those that had to do with distribution of welfare packages to beneficiaries.
To mitigate the challenge, the apex bank stated that eNaira would serve as a means by which the challenge of government’s monetary distribution to citizens can be effectively and efficiently addressed to ensure accountability is achieved.
The CBN stated: “The COVID-19 pandemic tested the effectiveness of payment systems globally and highlighted gaps especially in the distribution mechanism of welfare incentives. In some instances, cash was distributed due to lack of visibility and adaptability of existing payment infrastructure to new and emerging modes of value transfer.
“The eNaira provides a clear means for the government to send direct payments to citizens eligible for specific welfare programs more rapidly than through other means. This ensures that accountability is achieved, and the right persons get the funds. When a need arises, such as in times of economic crises, the central bank can also serve as a government agent and execute eNaira transfers to individuals and businesses affected.
“The eNaira will make it possible for governments to make targeted welfare payments to citizens directly, without the need for any intermediary. This will reduce the cost of delivering welfare benefits to citizens in need of welfare support and ensure the right people are receiving support”, it added
According to the bank, the adoption of eNaira will provide seamless process for government to send direct payments to citizens as part of its benefits to the country
It would be recalled that the apex bank had earlier assured that the adoption of eNaira would create a secure and cost-effective process for Diaspora remittance inflow to the country, amongst other benefits.
Similarly, it also stated that the digital currency’s adoption would improve e-transactions as Nigerians without internet-enabled phones will be able to do transactions without having to subscribe to data.
