eNaira: What is it? how it works & all you need to know

The Central Bank of Nigeria (CBN) on 25th October 2021 launched the eNaira, a digital currency for Nigerians to use for digital transactions.

A lot has been said about the introduction of the eNaira and its implications for trade and commerce in the country. In this piece, we examine what the eNaira is all about and how you can get to be a part of it.

What is eNaira?

eNaira is a digital currency that is issued by the Central Bank of Nigeria (CBN) and is a unique form of digital money denominated in Naira. eNaira functions as a medium of exchange and a store of value, providing better payment prospects in retail transactions as compared to cash payments. Similarly, due to its exclusive operational structure, the eNaira is remarkable and quite different from other forms of central bank money.

The eNaira is thus a digital currency similar to other digital currencies including, cryptocurrency, virtual currency, and central bank digital currency. A digital currency typically is any currency, money, or money-like asset that is primarily managed, stored, or exchanged on digital computer systems, especially over the internet.

One might wonder what are the benefits and basic features of the eNaira and if it is worth using in a country like Nigeria where government financial policies are oftentimes opaque and flippant.

Basic facts about the eNaira

  1. The eNaira is meant to provide financial inclusion to the populace by making financial services available to people or communities who do not have enough banking opportunities. The eNaira basically eases transactions and offers digital stability, thus reducing the need for physical cash.
  2. The eNaira is to ease trade both locally and internationally by making financial transactions cheap, quick and better. Offline banking and payments with cash take time for processing but with the eNaira, the delay is eliminated. Nigerians in the diaspora can send money into Nigeria using the eNaira and earn some incentives for doing so.
  3. The eNaira has a unique identity and security feature which makes it secure and cannot be counterfeited, unlike the paper Naira.
  4. Another thing you need to know about the eNaira is that it aids the revenue collection process since it reduces cash handling costs. Revenue collection agencies would find this very useful in their line of work.
  5. Unlike cryptocurrencies that have no government institutional backing, the eNaira is backed by the government and is pegged against the traditional Naira. It will not fluctuate due to market influence at a different rate from the traditional Naira. Thus 1 eNaira is equivalent to N1.
  6. The eNaira has transaction and balance limits for individual eNaira wallets imposed by the CBN:

    For Tier 0, the daily transaction and balance speed wallet limits are N20,000.00 and N120,000.00, respectively.

    For Tier 1, daily transaction and balance speed wallet limits are N50,000.00 and N300,000.00, respectively.

    For Tier 2 customers, daily transaction and balance speed wallet limits are N200,000.00 and N500,000.00, respectively.

    Finally, for Tier 3 customers, daily transaction and balance speed wallet limits are N1,000,000.00 and N5,000,000.00, respectively, while there isn’t any limit for Merchants.
  7. The use of the eNaira comes with charges however, the CBN stipulates that while charges for transactions that originate from the eNaira platform shall be free for the first 90 days commencing from October 25, 2021, it would revert to applicable charges as outlined in the Guide to Charges by Banks, Other Financial and Non-bank Financial Institutions.

What you can do with the eNaira

Here are things you can do with eNaira:

  • Contactless Payment for goods and services. Customers purchasing a good or service can make in-store payments using their eNaira wallet by scanning QR codes.
  • Bank Account Management. You can monitor your eNaira wallet, check balances and view your transaction history.
  • Peer-to-peer payment. One of the strong points about cryptocurrency wallets has been the peer-to-peer payment system where wallet owners can send cryptos to their peers using their wallets. The eNaira replicates this feature by allowing users to send money to one another using a linked bank card.

There are 5 ways payments can be made on eNaira

  1. Individual to another (Person to Person – P2P)
  2. Individual to Business/Merchant (Person to Business – P2B) / Business to Person (B2P)
  3. Individual to Government (Person to Government (P2G) / Government to Person (G2P). This feature is not yet available on the app.
  4. Cash or Bank account to eNaira wallet; and
  5. eNaira wallet to cash or bank account

Is eNaira secure and safe to use?

The eNaira is safe to use. The system uses a two-factor authentication system in addition to cryptographic encryption to ensure the safety of customers’ wallets and the eNaira holding. However, be aware that unlike bitcoin and similar cryptocurrencies, the Enaira is regulated by the Central Bank of Nigeria.

Where to download the eNaira app

You can download the eNaira via Google Playstore on your android device or on the App Store for your ios devices. As at the time of writing this piece, the app on Playstore had garnered over 100k downloads.

How to create an eNaira wallet account

1. Download the eNaira app

After downloading the app, you need to create a new account using your phone number and Email Address.

2. Verify with a token

A six-digit Token will be sent to your email address.

Open your email and input the token into the Token box.

3. Select your bank and provide relevant information

Select your Bank from the list of banks and input all details including Date of birth, Account number, Bank Verification Number, Password (minimum of 12 characters).

4. Agree to terms and conditions

Agree to the terms of service and click on the “Continue”  button.

A registration success message will show up, informing you that an account activation email has been sent to your email address.

5. Activate your account

Click on the Activation link in the email and your eNaira wallet will be activated.

You can then start using your eNaira wallet for digital transactions.

What is the difference between the eNaira and your regular Bank account?

The eNaira is the digital form of cash and is a direct liability on the Central Bank of Nigeria while the customer deposits are direct liabilities on the financial institutions. In other words, the Central Bank is responsible for your eNaira wallet.

How to Contact the eNaira team to lodge a complaint

If you have a complaint, you can track the complaint on the official CBN Consumer Complaint Management System (CCMS) using the reference/tracking number sent to your email.

Head office address

Plot 33, Abubakar Tafawa Balewa Way Central Business District, Cadastral Zone, Abuja, Federal Capital Territory, Nigeria.

Phone number and email

Phone: +234800MYENAIRA

Email: helpdesk@enaira.gov.ng

eNaira Website


Will the eNaira stand the test of time?

The answer to this question can only be revealed over time. Nigerians are known to be conservative and wary about financial transactions online however the young demographic who are already trading forex and cryptocurrencies can adopt this digital currency if they buy into the eNaira idea.

There was a backlash against the adoption of the eNaira and many negative reviews leading to the removal of the app from Google Playstore a few days after the launch of the app. The app is back on Playstore and it appears to be gaining momentum.

Interestingly, a vast segment of Nigeria’s population do not have internet access and thus would be ignorant about and very sceptical of innovation like the eNaira. While digital currencies and fintech are the future of the world of finance, we can only express cautious optimism and wait to see how things pan out in the coming years.

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Iniobong Umoh

Iniobong Umoh

Iniobong Leroi Umoh is a storyteller, techie, and content writer with MakeMoney.ng. He is enthusiastic about Tech, Finance, and Research. His works have been featured on different online and offline platforms.

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