President Buhari – Emerging Markets

Nigerian President Muhammadu Buhari suggested in a recent speech that the central bank's new digital currency E-Naira (CBDC) could add $29 billion to his country's GDP in ten years.

Africa's first CBDC

President Buhari made bold remarks in his speech at the launch of the e-naira CBDC on Monday: “In fact, some estimates suggest that the adoption of CBDC and its underlying technology, called Blockchain, can add $29 billion to Nigeria’s GDP over the next 10 years.” In addition to increasing Nigeria's GDP, President Buhari suggested that such a digital currency could help shift more people and businesses from the informal sector to the formal sector.

While acknowledging that many countries are still in the research and experimental phase, the Nigerian leader insists that the Central Bank of Nigeria (CBN) – which he said has been exploring CBDCs since 2017 – is well positioned to launch the digital currency.

In his speech, published by Premium Times, Buhari gives his reasons for approving the CBN's request to explore the possibility of issuing what is now Africa's first CBDC. He explained:

This move was underpinned by the fact that the CBN is a leading innovator in the money they produce and the payment services they use for efficient transactions. They have invested heavily in creating a payment system that is in the top ten in the world and certainly the best in Africa.

E-Naira to increase the effectiveness of monetary policy

According to the President, it is because of this payment system – as well as the central bank’s support in several private sector initiatives to improve the existing payments landscape – that CBN is qualified to issue the e-naira.

However, despite his high praise for Nigeria's financial system, President Buhari said the pilot phase of the CBDC rollout needs to be closely monitored and monitored. Finally, after successful testing, the e-naira is expected to help increase remittances, promote cross-border trade, improve financial inclusion and make monetary policy more effective.

What do you think of President Buhari’s comments on e-Naira? Tell us what you think in the comments section below.

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