USSD Code To Improve Effectiveness Of eNaira – CBN
The Central Bank of Nigeria, CBN, has said the introduction of the Unstructured Supplementary, USSD, code will boost the effectiveness of the eNaira, a Central Bank Digital Currency, CBDC.
This was made known by the Deputy Governor of the CBN, Kingsley Obiora, at the IMF African Department Speakers Series held virtually on Friday.
The series focused on “CBDC and Private Digital Payments in Kenya and Nigeria: Challenges and Opportunities for Sub-Saharan Africa.”
The eNaira was inaugurated by the CBN on October 25, 2021, with the aim of making financial transactions easier and seamless for every strata of the society.
Mr Obiora said the introduction of the USSD code became necessary to improve financial inclusion in the country and to ensure people without smartphones could still transact on the eNaira platform.
“We have made serious progress in the last seven to eight years because when the current governor resumed in 2014, one of the pillars of his vision was to significantly improve financial inclusion.
“So at the time, we were at 48 per cent of our population within the financial system and given several policies that he conceived and implemented, we are almost at 70 per cent.
“That still leaves us with about 30 per cent of our population out of the financial system and we believe the CBDC can help reduce that number even more.
“A lot of people might not have smartphones but that is essentially the next step of our improvement in the CBDC, to introduce the USSD code, so those that do not have smartphones can still transact,” Mr Obiora said.
The CBN deputy governor said that the barrier to entry on the CBDC platform was low, which made it possible for everyone with a Bank Verification Number (BVN) to be onboarded into the eNaira platform in a few minutes.
He said the value of the country’s digital payments grew from $324 billion in 2008 to about $2.4 trillion presently, adding that Nigerians were now used to digital payments.
”As you know, within the continent we have one of the largest Fintech companies, Futterwave, Paystack, etc,” the apex bank boss added.
He said that the CBDC had significant benefits for Nigeria, which was why the CBN decided to introduce it.
Mr Obiora listed the benefits to include rapid financial inclusion, reducing the cost of processing cash, enabling direct welfare payments to citizens, and reducing the informal economy.
Others are improving tax collection, boosting cross-border trade and remittances, reducing the cost and improving the efficiency of payments and just endearing economic growth in general.