The Central Bank of Nigeria (CBN), says it is set to
introduce the Unstructured Supplementary (USSD) code
as part of steps to improve the Central Bank Digital
Currency (CBDC).
The Deputy Governor of the CBN, Kingsley Obiora, said
this at the IMF African Department Speakers Series
held virtually on Friday.
The News Agency of Nigeria (NAN) reports that the
series was focused on “CBDC and Private Digital
Payments in Kenya and Nigeria: Challenges and
Opportunities for Sub-Saharan Africa.”
NAN recalls that the CBN inaugurated the CBDC, also
known as the eNaira, on Oct. 25, 2021, aimed at
making financial transactions easier and seamless for
every strata of the society.
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,” 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.
Obiora said the value of the country’s digital payments
grew from 324 billion dollars in 2008 to about 2.4
trillion dollars 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.
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.
He, however, listed some of the key risks to
introducing the CBDC to include banking sector
disintermediation, operational risks of knowing that
there is non-stop service, cyber security risks, internet
disruptions and financial literacy.
Obiora said that Nigeria was doing well based on a
PwC report, which showed that Nigeria was number
one in terms of adoption, adding that the CBN would
keep growing and improving on the system.
Speaking on adopting cryptocurrency in Nigeria, the
deputy governor said for now it would not become
part of the country’s financial system because of the
volatility that it could create for the system.
Commenting on the high cost of food and fuel in
Nigeria caused by the war in Ukraine, he said that the
problem was more political than economic.
According to him, we hope that world leaders will sort
this out as quickly as possible because ordinary people
who have no egos and did not cause this problem are
the ones that are suffering the most.
“Within Nigeria what we are seeing is that farm gate
food prices have either stabilised or reduced, whereas
in the market it actually has increased.”
Obiora said a lot of the problems with rising food
inflation were due to logistic problems and the issue of
higher prices of fuel and transportation.
“We are trying to deal with that by investing a bit in a
commodity exchange so that they can stabilise prices.
He said, “within the monetary policy committee, rates
will be raised at least to signal that we will continue to
keep an eye on inflation and stand ready to do
whatever it takes to turn it around.”
According to the moderator, Mr Abebe Selassie,
Director, African Department, IMF, the series is a
platform where Africa’s pressing economic policy
issues are discussed and organised by the IMF’s
African Department.
Selassie said the series provided an opportunity for
policymakers, academics, and analysts to offer their
perspectives on economic and policy issues relevant to
the IMF’S African constituency. (NAN)

https://www.vanguardngr.com/2022/06/cbn-to-introduce-ussd-code-to-improve-enaira/
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