A recent working paper released by the International Monetary Fund (IMF) titled "Nigeria's eNaira, One Year After" reveals that approximately 98.5 percent of eNaira wallets downloaded following the unveiling of the digital currency have been abandoned.

The IMF report examines the performance of the eNaira within its first year and highlights the disappointingly low adoption rate of the digital currency. The average number of eNaira transactions since its introduction amounts to only around 14,000 per week, which represents a mere 1.5 percent of the total number of wallets in existence. This means that, on any given week, 98.5 percent of wallets have not been utilized even once, as stated in the paper.

The IMF emphasises that the eNaira project has not progressed beyond the initial wave of limited adoption, and the usage of digital currency by households and merchants has been slow. The report points out that the number of retail wallet downloads experienced a surge initially but then tapered off. While it took just 25 days to reach 500,000 wallet downloads, it took an additional 63 days to reach 600,000 and another 143 days to reach 700,000.

As of the end of November 2021, the total number of retail eNaira wallets stood at approximately 860,000, accounting for a mere 0.8 percent of Nigeria's active bank accounts. In comparison, the number of merchant wallet downloads reached around 100,000 by the end of June, representing just one-eleventh of the number of merchants with Point-of-Sales (POS) terminals that enable credit or debit card payments.

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The IMF report also highlights the low transaction volume recorded by the downloaded wallets, with many remaining inactive after the initial surge upon launch. On average, only 1.5 percent of the downloaded wallets were used for eNaira transactions each week. The average value of these transactions was approximately 923 million naira per week, which accounts for a mere 0.0018 percent of the average amount of M3 during the same period. The average value per transaction was around N60,000.

The IMF suggests that the potential of eNaira in promoting financial inclusion requires a strategy to establish the right relationship with mobile money, considering its potential to either complement or substitute existing mobile money services. The report also notes that integrating the Central Bank digital currency (CBDC) into the remittance process could result in substantial cost savings.

The eNaira, Nigeria's Central Bank Digital Currency (CBDC), was officially launched by President Muhammadu Buhari on October 25, 2021, in Abuja. Nigeria is among the few countries worldwide to develop an official digital currency. The eNaira was developed by the fintech company Bitt, which has also been involved in creating CBDCs for some East Caribbean countries. The Central Bank of Nigeria governor, Godwin Emefiele, announced at the launch that 500 million eNaira (equivalent to $1.21 million) had already been minted.