The International Monetary Fund (IMF) says 98.5 percent of eNaira wallets have not been used even once.

In its recently released working paper titled ‘Nigeria’s eNaira, One Year After’, the Bretton Woods institution took stock of the first year of the eNaira —the first central bank digital currency (CBDC) in Africa.

President Muhammadu Buhari formally launched the digital currency at the state house in Abuja on October 25, 2021.

The IMF said despite the laudable undisrupted operation for the first full year, the CBDC project has not yet moved beyond the initial wave of limited adoption.

The fund said the take-up of the eNaira by households and merchants has been slow.

The IMF described the public adoption of the eNaira as “disappointingly low” due to the levels of wallet downloads and transactions.

The fund said as of end-November 2021, the total number of retail eNaira wallets amounted to about 860,000 — a figure equivalent to just 0.8 percent of Nigeria’s active bank accounts.

“The retail wallet downloads saw a few weeks of initial surge before tapering off. More specially, it only took 25 days for the number of downloaded wallets to reach 500,000 units—but going from there to 600,000 units took another 63 days; and to 700,000 units yet another 143 days,” the paper reads.

“As of end-November 2021, the total number of retails eNaira wallets amounted to about 860,000. This is just 0.8 per cent of Nigeria’s active bank accounts.

“Merchant wallet download has reached about 100,000 in end-June, which is about one eleventh of the number of merchants with Point-of-Sales (POS) terminals—which enables credit or debit card payments.”

On transactions, the IMF said most wallets appear to remain inactive except for a limited window of weeks of activity surge.

The institution said the average number of eNaira transactions weekly were carried out only by 1.5 percent of downloaded wallets.

“The average number of eNaira transactions since its inception amounts to about 14,000 per week—only 1.5 percent of the number of wallets out there. This means that 98.5 percent of wallets, for any given week, have not been used even once,” the paper further reads.

“The average value of eNaira transactions has been 923 million naira per week—0.0018 percent of the average amount of M3 during this period. The average value per one transaction has been 60,000 naira.”

The IMF said network effects suggest the initial low adoption spell would require a coordinated policy drive to break it.

“The eNaira’s potential in financial inclusion requires a strategy to set the right relationship with mobile money, given the former’s potential to either complement or substitute the latter,” the institution said.

“Cost savings from integrating CBDC—as a bridge vehicle—in the remittance process may also be substantial.”