CBN to introduce USSD code to boost eNaira

The Central Bank of Nigeria (CBN) has revealed its plan to introduce the Unstructured Supplementary (USSD) code as part of steps to improve the Central Bank Digital Currency (CBDC).

Kingsley Obiora, the Deputy Governor of the CBN revealed this during the IMF African Department Speakers Series last Friday. "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.  

Even though USSD is an old technology, nine out of ten mobile money transactions in sub-Saharan Africa are executed through the technology. Over 100 USSD codes are currently used in Nigeria, according to the Stax USSD Directory.

Adopting USSD will enable the CBN to achieve its goal of 95% financial inclusion by 2024 as more individuals in rural communities with low internet penetration and low availability of smartphones will get to access the digital currency.

Between January and December 2020, the value of USSD transfers in Nigeria increased, going from roughly ₦30 billion to ₦551 billion Naira. The National Bureau of Statistics said Nigerians used USSD codes to transfer ₦1.63 trillion in the last quarter of 2020.

Launched in October 2021 as the first national digital currency in Africa, eNaira's adoption rate has been low. Last month, we ran a poll to ascertain the adoption rate, out of 86 respondents, 98% said they have not used the currency.

In its CBDC Global Index, PwC said around 666,000 eNaira speed wallets have been created across 160 countries as of December 2021. According to the report, 90 per cent of the transactions were person-to-business and vice versa. The eNaira ranked first on the global index of retail CBDCs.