Amid a nationwide cash shortage, Nigeria’s central bank digital currency (CBDC), eNaira, has seen a marked increase in usage as citizens struggle to access physical currency. The rise in eNaira transactions comes as Nigeria faces a liquidity crisis, with many residents turning to the digital currency for daily transactions in response to a severe shortage of cash.

The Central Bank of Nigeria (CBN) reports that usage of the eNaira has grown significantly since the onset of the crisis. The shortage is reportedly due to a reduction in the supply of banknotes, attributed to recent central bank policy aimed at curbing inflation and improving security around Nigeria’s monetary system.

Growing Reliance on Digital Currency

The cash shortage has pushed more people, including merchants and consumers, to adopt the eNaira for daily transactions, including purchasing food, paying for transportation, and covering essential expenses. For many Nigerians, the eNaira has become a practical alternative to cash, which remains scarce in banks and ATMs across the country. Local vendors have reported increased demand for digital payment options as traditional cash transactions are no longer feasible for many.

The CBN introduced eNaira in October 2021 as Africa’s first CBDC, promoting financial inclusion and reducing the cost of transactions. However, initial adoption was slow, with many citizens preferring cash or other digital alternatives. The ongoing cash crisis, however, has underscored the eNaira’s importance in enabling secure, government-backed digital transactions amid physical currency shortages.

Central Bank’s Response to the Crisis

To address the shortage, the CBN has encouraged citizens to embrace digital payment methods, particularly the eNaira, while announcing measures to ease liquidity pressure in the coming weeks. The CBN has also appealed to commercial banks to increase access to the eNaira platform, allowing Nigerians without smartphones to transact through simpler mobile devices. Reports indicate that the central bank is working closely with financial institutions to scale eNaira’s accessibility nationwide.

The CBN’s efforts have helped drive increased public interest in the eNaira as Nigeria confronts the impact of a limited cash supply. Many citizens are now downloading the eNaira app, with downloads spiking since the shortage began.

With the cash crisis still unresolved, eNaira usage is expected to remain elevated as Nigerians adapt to digital payment solutions. As the CBN continues to push for eNaira’