Public Perception Of Nigeria Electronic Naira (E-Naira): A Study Of Kano Metropolis
This study was carried out to examine public perception of Nigeria electronic naira (e-naira) using kano metropolis, Kano State. Specifically, the study aimed to investigate if the launching of e-naira will enhance public users’ ease in performing financial transaction, determine the public perceptions on the challenges of using e-naira and ascertain the benefit of e-naira launching in Nigeria. The study employed the survey descriptive research design. A total of 141 responses were validated from the survey. From the responses obtained and analyzed, the findings revealed that launching of e-naira enhance public users’ ease in performing financial transaction. The study also revealed that there are challenges encountered by the public while using e-naira platform. The study further revealed that the benefit e-naira launching would offer to Nigeria individuals and business is that it enables effective, equitable, and faster distribution of cash assistance to households, improve financial inclusion, enable the government to make welfare payments more easily and foster cross-border trade. Lastly, the study revealed that there will be need for educating the public further on this new development. The study thereby recommend that government should create more awareness about eNaira among the public and the MSME sector in particular, they should also enhance eNaira security features; providing support interventions using eNaira, and routing government financial transactions through eNaira wallets.
Table of Content
- Title Page
- Table of Content
- List of Tables
- 1.1 Background of the Study
- 1.2 Statement of the Problem
- 1.3 Objective of the Study
- 1.4 Research Questions
- 1.5 Significance of the Study
- 1.6 Scope of the Study
- 1.7 Limitation of the Study
- 1.8 Definition of Terms
Review of Literature
- 2.1 Conceptual Framework
- 2.2 Theoretical Framework
- 2.3 Empirical Review
- 3.1 Research Design
- 3.2 Population of the Study
- 3.3 Sample Size Determination
- 3.4 Sample Size Selection Technique and Procedure
- 3.5 Research Instrument and Administration
- 3.6 Method of Data Collection
- 3.7 Method of Data Analysis
- 3.8 Validity of the Study
- 3.9 Reliability of the Study
- 3.10 Ethical Consideration
Data Presentation and Analysis
- 4.1 Data Presentation
- 4.2 Analysis of Data
- 4.3 Answering Research Questions
Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
1.1 Background of the Study
Without a doubt, the global financial system is embracing the current technological transformation from physical currency to practically virtual currencies. In recent years, rapid technological innovation and new business models have led in a slew of novel retail payment methods. These developments point to substantial changes in the retail payment environment, including a decrease in cash usage. As a result of this tidal wave, digital money innovation arose.
According to Gilbert, Scott, and Loi, Hio. (2018), digital currencies have properties similar to traditional currencies but, unlike printed banknotes or minted coins, do not often have a physical form. The lack of a physical form allows for near-instantaneous online transactions and removes the costs of sending cash and coins. As a consequence, as long since both parties recognise the currency’s legality, digital currencies will continue to be useful for inter-party transactions, as they provide the benefit of speedy settlement, particularly in online communities. Although cryptocurrency is the most popular form of digital currency, there are thousands of them in the modern world, each of which operates and enjoys security thanks to the mutually adopted encryption codes by the parties in such transactions, especially since most governments around the world have shied away from conferring any form of endorsement or legitimacy on transactions conducted through such channels.
Taking advantage of this rapid technological progress and financial market development, has led world economies into transiting from paper currency to digital currency of which Nigeria is not not left behind. Abdulkareem M. (2021) explored that central banks globally have been working delicately on their digital currency by gradually weaning themselves off rapidly-declining cash payments, and this is the reason the Central Bank of Nigeria joined the fray so that Nigeria is not left in the lurch which gave rise to the launch of her e-Naira which is coming after instructing banks to close cryptocurrency and ban crypto-related accounts in February 2021 (premiumtimesng.com). However, the implications for payment system efficiency are still to be determined and the potential risks that may arise from the operation of these schemes. Thus, should digital currencies become widely used for large-value transactions or for other asset types beyond funds transfers, their impact on other areas of responsibility for central banks, such as payment system oversight and regulation, financial stability and monetary policy, and associated tendencies of fraud and money laundering, might become more prominent, posing a relatively high risk for public users.
Following the planned launch of the e-Naira guidelines, a sequel to this stipulation has arose, generating significant public interest.Of primary interest to the Nigerian public is the prospect of effective implementation of the guidelines in a manner that will impact the public interest most profitably without avoidable risks. Furthermore, considering that transactions in this mode run without any physical exchange of funds but through computers that still remain mysterious to most Nigerians, the level of exposure to digitally non-compliant people remains significant.
1.2 Statement of the Problem
Prior to the emergence of electronic naira, Nigeria paper naira has experienced significant foreign exchange crisis and the pace of depreciation of the naira has aroused serious concern among residents which compelled the need to attempt an alternate legal tender. Additionally is the restriction of cryptocurrencies as advised by CBN in the year therefore the necessity to grow the country currency from paper to electronic. Kalu (2021) asserts that Central Bank of Nigeria issued its own digital currency on the basis of lowering the cost of managing paper currency, leveraging new emerging digital technologies, improving the digital readiness landscape, maturing identification registries, and driving financial inclusion. While the benefits of digital money in permitting rapid transactions are noteworthy, the exercise’s bad effects cannot be underestimated.
Adolphus (2021) remarked that at the time, the country’s financial sector is manifesting major challenges owing to weak administration, which have continued. Hence, the implementation of the e-Naira should not be permitted to aggravate the issues in the sector. Therefore, the obligation to guarantee that all operators of the project have a verifiable track record and a degree of integrity that the public can depend on is crucial. Closely tied to the concerns is the confusing condition of effective execution of the suggestions, whose lack of public education and enlightenment in respect of the seamless transition of more Nigerians to digital transactions has been murky.
According to Daily Trust journal (2021), the editor underlined that the general people are starting to worry about the security of this new digital money and the extent of its vulnerability to hackers and fraudsters. This is because in Nigeria, there is a high rate of illegal activities perpetuated by fraudsters through online transactions, illicit money transfers, clearing of accounts, western wire, and hacking into individual accounts. Hence, this has sent a bad signal to the public at the debut of the e-naira, making them have worries on the safety their wallet should they bank with CBN and what the consequences of the digital money hold for them as users. Therefore, it is vital to assess this circumstance thoroughly. Therefore, it is against this backdrop that this study aims to assess the public perception of Nigerians on electronic Naira (e-naira) using Kano State as a case study.
1.3 Objective of the Study
The broad objective of this study is to examine public perception of Nigerian on electronic Naira (e-naira) using Kano State as case study.
Specifically, the study seeks to:
- Investigate if the launching of e-naira will enhance public users’ ease in performing financial transaction.
- Determine the public perceptions on the challenges of using e-naira.
- Ascertain the benefit of e-naira launching in Nigeria.
1.4 Research Question
The research will be guided by the following question:
- Would launching of e-naira enhance public users’ ease in performing financial transaction?
- Would there be any challenges encountered by the public while using e-naira platform?
- What are the benefit e-naira launching would offer to Nigeria individuals and business?
- Would there be need for educating the public further on this new development ?
1.5 Significance of the Study
Findings from the study will be relevant to economic developers, policy maker, government and public users. To government, policy makers and economic developers, , the result of the study will enlighten them on the need to throw more on this new development in other help the general public gain clarity about e-naiara and furthermore clear their doubts and fears on its usage. To other sectors of the economy who this new development would affect their operations, the result of the study will enable them to brace up to the challenges that will accompany the launch of e-Naira and find a way to downplay it in other to remain relevant in the changing business environment. Finally findings from the study will add to the existing body of literature and serve as reference tool for both scholars and student who wishes to conduct further studies in related field.
1.6 Scope of the Study
The scope of this study border on an examination of public perception on e.Naira. The study will further determine if their are percieved challenges e-Naira users will face while using the platform. The study is however delimited to Kano Metropolis of Kano State in Nigeria.
1.7 Limitation of the Study
Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing that it is a new discourse thus the researcher incurred more financial expenses and much time was required in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. Additionally, the researcher will simultaneously engage in this study with other academic work. However in spite of the constraint all these constraint were downplayed to give the best.
1.8 Definition of Terms
Digital currencies are monies that exist not in physical form but only as electronic data, but perform the basic functions of money being unit of account, store of value and means of exchange.
eNaira is the name given to the CBN’s first proposed digital currency. eNaira is a central bank digital currency (CBDC) issued by the Central Bank of Nigeria as a legal tender. It is the digital form of the Naira and will be used just like cash.
Summary, Conclusion and Recommendation
In this study, our focus was on public perception of Nigeria electronic naira (e-naira) using residents of kano metropolis as a case study. The study specifically was aimed at highlighting investigate if the launching of e-naira will enhance public users’ ease in performing financial transaction, determine the public perceptions on the challenges of using e-naira and ascertain the benefit of e-naira launching in Nigeria. A total of 141 responses were validated from the enrolled participants where all respondent are drawn from residents of Kano metropolis.
Based on the finding of this study, the following conclusions were made:
- Launching of e-naira enhance public users’ ease in performing financial transaction
- There are challenges encountered by the public while using e-naira platform
- The benefit e-naira launching would offer to Nigeria individuals and business is that it enables effective, equitable, and faster distribution of cash assistance to households, improve financial inclusion, enable the government to make welfare payments more easily and foster cross-border trade.
- There will be need for educating the public further on this new development
Based on the responses obtained, the researcher proffers the following recommendations:
- That government should create more awareness about eNaira among the public and the MSME sector in particular, they should also enhance eNaira security features; providing support interventions using eNaira, and routing government financial transactions through eNaira wallets.
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Frequently Asked Questions (FAQ)
What is the Nigeria Electronic Naira?
- The Nigeria Electronic Naira, also known as the eNaira, is a digital currency introduced by the Central Bank of Nigeria (CBN). It is a form of electronic money designed to complement the existing physical currency, the Nigerian Naira. The eNaira operates on a blockchain-based platform and aims to facilitate faster, cheaper, and more secure financial transactions within Nigeria.
How does the Nigeria Electronic Naira work?
- The Nigeria Electronic Naira operates on a blockchain-based platform developed by the Central Bank of Nigeria. Users can create digital wallets through authorized financial institutions and load their eNaira wallets with funds. These funds can be used for various transactions, such as payments, transfers, and purchases. The eNaira can be accessed through mobile apps or other digital platforms connected to the blockchain network.
Is the Nigeria Electronic Naira legal?
- Yes, the Nigeria Electronic Naira is a legal form of currency introduced by the Central Bank of Nigeria. The CBN has the authority to issue and regulate the eNaira, and it is considered a legal tender within Nigeria. The electronic currency operates alongside the physical Nigerian Naira and has the same legal status.
What are the benefits of using the Nigeria Electronic Naira?
The Nigeria Electronic Naira offers several benefits, including:
- Increased efficiency: The eNaira enables faster and more efficient transactions, reducing the time required for transfers and payments.
- Cost-effective: Digital transactions through the eNaira can be more affordable compared to traditional banking services, particularly for smaller transactions.
- Financial inclusion: The eNaira aims to improve financial inclusion by providing access to banking services for individuals who may not have had access to traditional banking systems.
- Reduced fraud: The eNaira incorporates security features that help mitigate fraud and counterfeiting, making transactions more secure.
- Enhanced transparency: Blockchain technology underlying the eNaira provides a transparent and auditable transaction history, contributing to increased accountability.
How can I acquire the Nigeria Electronic Naira?
- To acquire the Nigeria Electronic Naira, individuals can create digital wallets through authorized financial institutions in Nigeria. These wallets can be accessed through mobile apps or other digital platforms provided by the participating financial institutions. Users can then load their wallets with funds by linking their bank accounts or through other designated channels.
Can I convert my physical Naira into the Nigeria Electronic Naira?
- Yes, it is possible to convert physical Nigerian Naira into the electronic form. Users can deposit their physical currency with authorized financial institutions and receive an equivalent amount of eNaira in their digital wallets. Similarly, users can also convert their electronic Naira into physical currency if required.
Is the Nigeria Electronic Naira secure?
- The Nigeria Electronic Naira is designed to be secure. It operates on a blockchain-based platform, which offers enhanced security features such as cryptographic encryption and decentralization. The Central Bank of Nigeria has implemented measures to protect the eNaira system from hacking, fraud, and unauthorized access.