25 of 130 countries exploring CBDCs are in Africa — Report

A new report from U.S. based research firm, The Atlantic Council, has revealed that 130 countries are exploring central bank digital currencies (CBDCs), and 25 of these countries are in Africa. 

The details 

• On its CBDC tracker, the firm noted that Nigeria is still the only African country to have launched a CBDC. 
• Ghana, South Africa and Tunisia are currently piloting CBDCs, Benin Republic’s digital currency status was marked ‘inactive’ and Senegal’s project was canceled. 
• While only Mauritius’ is at its development stage, most African countries covered in the report are still at research phase. 

Why this matters 

•  CBDCs have been described as a useful tool for promoting financial inclusion and solving cross-border remittance issues in Africa. 
• In what is the most expensive in the world, it costs an 8.9 percent fee — sometimes as high as 16 percent — to send money to Sub Saharan Africa. 
• The International Monetary Fund (IMF) projected that CBDCs could not just make remittances easier, faster and cheaper but also boost international trade in Africa. 

Before now 

• Nigeria’s CBDC — the eNaira — witnessed low adoption in its early days. The IMF reported that as of November 2022, there were less than one million wallets. 
• However, since October, new reports said that 13 million additional wallets have been created. The former governor of the Central Bank of Nigeria, Godwin Emefiele attributed the surge to the government of Nigeria’s social welfare program. 
• Nigeria’s West African neighbor, Ghana, announced that the pilot of its proposed CBDC, the eCedi was successful. However, it postponed the launch due to a ‘dislocation’ of the economy. 
• Tanzania, Kenya and Zimbabwe have announced that they are slow and cautious with their approach to launching a CBDC.