10Naira = 10 e-Naira = 10 w-Naira
With e-Naira not increasing the material value of that N10, why must I convert that pure Naira to e-Naira? For most Nigerians, the problem is not how to “store” their naira but how to make more Naira. Provided e-Naira does not solve that problem at scale, it has limited value.
In engineering, we call it transduction, moving something from one energy state to another. When you do that, you expect to optimize usage at the new energy state. e-Naira could save transaction cost but that is exceedingly minimal and insignificant for most when you compare the troubles associated with the transduction.
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
So, what is the new value that e-Naira gives me that w-Naira or pure Naira does not? That is why I am not bullish on e-Naira and certainly do not believe in the experiment El Salvador is doing. The problem in that country is not whether people pay in Bitcoin or their local currency, but the ability to earn that money, irrespective of the form.
Yes, the new form of currency does not do anything because the new state, post-transduction, does not deliver any leverageable advantage. For me, expecting to drive economic growth that way is not a sound policy. That is a big own-goal especially now that the investment has dropped by half, impoverishing its people.
w-Naira means money in a fintech wallet, mobile banking app, etc.
Comment on LinkedIn Feed
Comment: The e-naira does not bring any significant value to the holder, rather it’s the issuer that is saving minting cost, in addition to trailing every transaction. You cannot scale digital currency in a country where every key infrastructure is subpar, the Immigration Service is comfortably having server blackouts whenever it pleases, and it doesn’t bother them a great deal. The grid that is sub 5000MW keeps collapsing. What happens if e-naira server fails to come up? Even the bus conductor won’t let you come down from the bus.
As for El Salvador, you cannot be afraid of falling down when you are already lying on the ground, it’s already a failed state, so any experiment there carries minimal risk.
It’s only productive systems that generate new wealth and increase purchasing power, moving the same value of money around doesn’t give you that. We are simply swapping and flipping, no increased productivity.
El Salvador Loses Half Of Its Crypto Investment In Value, As Bitcoin Crashes
---
Register for Tekedia Mini-MBA (Feb 10 - May 3, 2025), and join Prof Ndubuisi Ekekwe and our global faculty; click here.
The e-naira does not bring any significant value to the holder, rather it’s the issuer that is saving minting cost, in addition to trailing every transaction. You cannot scale digital currency in a country where every key infrastructure is subpar, the Immigration Service is comfortably having server blackouts whenever it pleases, and it doesn’t bother them a great deal. The grid that is sub 5000MW keeps collapsing. What happens if e-naira server fails to come up? Even the bus conductor won’t let you come down from the bus.
As for El Salvador, you cannot be afraid of falling down when you are already lying on the ground, it’s already a failed state, so any experiment there carries minimal risk.
It’s only productive systems that generate new wealth and increase purchasing power, moving the same value of money around doesn’t give you that. We are simply swapping and flipping, no increased productivity.
The key message there is transduction. I Iearnt it now. You can’t bring a new system but people are not able to see the additional value and you expect people to embrace it. Some od these systems, like POS at fueling stations increase pump downtime. Even the mandate from govt did not move that needle of adoption. We hope to change that with FuelPAY. If we allow ePayments at pumps without impacting pump efficiency, we believe we will do well.
Thanks again for this insight on transduction.