Due to the increasing popularity of bitcoins, world’s apex banks have been working towards developing government-backed digital currencies.

From CBN’s February 5, 2021, instruction to banks and other financial institutions to refrain from dealing with crypto currency (a digital currency) and facilitating payment for crypto currency exchanges, the apex bank by October 1, 2021 will launch Nigeria’s Digital Currency dubbed “e-naira”.  CBN had on August 30, 2021 announced Bitt Inc as a technical partner in the digital currency scheme. Bitt Inc, is a financial technology business that uses block chain and distributed ledger technology to enable safe peer-to-peer transactions with seamless mobile money across Bitt’s software and mobile apps.  According to CBN, Bitt Inc. was key to the development and successful launch of the central bank digital currency (CBDC) pilot of the Eastern Caribbean Central Bank (ECCB).  So the selection of the company was hinged on the company’s technological competence, efficiency, platform security, interoperability, and implementation experience and tested and proven digital currency experience, which is already in circulation in several Eastern Caribbean Countries.

E-naira is an electronic form of legal tender; a platform believed to drive digital transactions, e-commerce, import and export, financial derivatives and other transactions. E-naira has some similarities with crypto currencies and as well as some differences.  It operates on a similar platform. In fact one physical Naira will be equal to one E-Naira. While CBDC is permitted, crypto currencies are not permitted. E-Naira will not grow in value like Bitcoin or other crypto currencies, but will function the same way like Bitcoin.

Prior to the launch date, guidelines, clarifications have been issued and made. CBN is not going to be in competition with the banks but is going to participate in the space with Banks, Fintechs, NIPS, Telecom, etc. for the first day, CBN is to deploy and later, the FIs are to be integrated at zero cost in the CBN APIs at different stages depending on the robustness of their respective IT systems. Banks already have an e-wallet platform, it is just to migrate and upload.  The existing interbank transfer system will still prevail.  E-wallet is to be initiated by customers, from banks to CBN.

The liability of the e-naira money is directly on CBN, the same way the liability of the cash we hold today rests with the apex bank. However every stakeholder takes responsibility and liability.  For instance, if lapse is from the customer; such as misplacement of PIN, of course the customer takes liability, but if the loss is systemic, then the FIs and/or CBN take responsibility. It will have the same value with the same physical naira but not backed with physical cash.  The same way physical cash is accepted as a legal tender, e-naira is to be accepted as a form of payment by all merchants and business outlets. The e-naira will be available for corporate accounts but not on day one.  As the system upgrades and integrates, it will come in.  The scheme is going to be started in pilot in some states; Lagos, Kano, Abuja and Port Harcourt.

Upon launching, CBN will provide an interim e-wallet (speed wallet) for customers until FIs develop and launch their individual wallets. There are going to be 4 types of wallet; Tier 1, 2, 3 and the merchant. 

TypeCumulative Balance LimitTransfer LimitKYC Requirement
Tier 1N300,000N50,000No existing bank account, phone validated by NIN
Tier 2N500,000N200,000Existing bank account and BVN
Tier 3N5,000,000N1,000,00Existing bank account and BVN
MerchantNo limitN1,000,00Full KYC Requirement and anti-money laundering and terrorism regulation of the CBN

Tie 1 e-wallet holders are unbanked and expected to use their phone numbers and other personal data to register. That means if your transaction value is less than N50,000 a day, you do not need a bank account to the e-naira; you can use a NIN verified phone number to buy e-naira

For the pilot scheme, the participants are CBN, FIs, e-Government, Merchants, and Retail Consumers. CBN will be handing the first product component that includes issue, distribute, redeem and destroy the currency. Store data on a cloud server, monitor and analyse currency transactions.

The licensed financial institution will be able to request currency or issue stable coins, manage digital currency across branches, KYC, identify and AML compliance capability, while the government will be able to efficiently process digital payments sent to and received from citizens and businesses.

Merchants will provide low-cost payment and business management software, POS, remote payment solutions, online capabilities, transaction analysis and reconciliation. The Retail Consumer Suite features user-centered designs for a great user experience. The architecture will be expandable to enable innovation; features advanced privacy and security.

The aim of the e-naira is to lower pressure in the use of cash, ensures that CBN is in control of the financial system, increase financial inclusion, and help the apex bank drive certain policy on tax allocation and management and cross border transactions.

It is also believed that the CBDC will help strengthen the banking system and make it easier to comply with existing laws such as anti-money laundering, customer protection against fraud and ensure the safety and stability of the payment system.  The e-naira offers all the benefits of cash but in digital form.

Another advantage is cost. The cost of printing physical cash is very high.  This high cost translates to higher cost of transaction and charges. But it virtually costs nothing to create digital currency, which consequently translates to lower fees users will pay.  Transaction invariably will come down and thus transcends even to the un-banked.

Another advantage is efficiency.  The technology is fast and efficient; about 99% efficient.  There will be nothing like partial execution of transactions; either it goes or it fails and with minimal intermediaries.

The e-naira has a non-interest bearing CBDC status and no charges on merchant services, user-to-merchant and peer-to-peer wallet transactions.  Also zero charges will apply when users send money from their wallet to bank accounts or make withdrawals at agent or merchant locations.

For you to receive and spend e-naira, you need to have an electronic wallet.  To have an e-wallet, you have to download the e-naira app from the Android Google Play Store and Apple iOS store and then follow the typical instructions in connecting your bank. The bank will do the KYC and create your e-naira wallet. Your e-wallet comes with strong encryption; that gives the user/owner full control of it. 

Once you have your e-naira, you can access it by logging in with your credentials to perform transactions electronically. For funding, you fund it just the way you fund your normal bank account or utilize the option of walking into a bank, hand over your cash and have it digitized, especially for those who already have bank accounts.

Idika Aja, ACS, writes from Lagos and can be reached via E-mail – idikaaja@yahoo.com or 08034003768. Article first published by National Business Extra Newspaper. Page 17 below:



International Breweries PLC emerged the NSE30 stock of the week ended September 10, 2021.  Share price and market capitalization appreciated by 3.23%; gaining N4.03b W-o-W; closing at marketing capitalization of N128.94bn.

On the other hand, the NSE 30 dipped further by -0.31%; losing N54.68bn compared to previous week ended September 3, 2021.

On Thursday, September 16, 2021, the ASI YTD performance worsened to -3.38%, as the ASI declined 0.15% to settle at 38,911.31 points due to sell pressure in stocks like INTBREW, DANGSUGAR, WAPCO, GTCO, UBN and ETERNA.

S/N WEEK – 3/9/21WEEK – 27/8/21
  % +/(-)AMT IN BN% +/(-)AMT IN BN
1Okomu Oil0.00%0.000.00%0.00
2Presco Plc0.00%0.008.90%6.50
3Guinness Nig Plc0.00%0.000.00%0.00
4International Breweries3.23%4.03-1.06%-1.34
5NB Plc1.35%5.20-7.69%-31.99
6Dangote Sugar-0.85%-1.82-0.56%-1.21
7Flour Mills-3.50%-4.133.45%4.10
8NASCON Allied Ind.0.00%0.000.00%0.00
9Nestle Plc0.00%0.000.00%0.00
10Unilever Nig Plc0.00%0.000.00%0.00
11Transcorp Plc-3.19%-1.222.17%0.81
12Access Bank0.00%0.001.10%3.55
16Fidelity Bank-2.13%-1.45-2.08%-1.45
17GTB Plc-2.87%-23.541.09%8.83
19Sterling Bank-0.66%-0.29-1.95%-0.86
20UBA Plc-1.94%-5.133.33%8.55
22Zenith Plc-0.41%-3.14-1.23%-9.42
23Custodian Investment2.29%0.883.15%1.18
25BUA Cement0.00%0.000.00%0.00
26Dangote Cement Plc0.00%0.00-1.84%-78.39
27Lafarge (WAPCO)0.00%0.001.82%6.44
28Seplat Petroleum0.00%0.000.00%0.00
2911 Mobil Plc0.00%0.000.00%0.00
30Total Plc0.00%0.000.00%0.00
 NSE-30 INDEX-0.31%-54.68-0.62%-104.94

International Breweries Plc was incorporated in December 1971 by its founder and first Chairman, Dr. Lawrence Omole under the name International Breweries Limited. The Company commenced production of its flagship product Trophy Lager in December 1978 with an installed capacity of 200,000 hectoliters per annum.  Other brands packaged and marketed by International Breweries Plc include Castle Milk Stout, Castle Lager, Redds, Hero, Grand Malt and Voltic Water.

Currently, INTERBREW is unprofitable and not forecasted to become profitable over the next three years.  For the years 2020, 2019 and 2018, the company declared loss after tax of (N12,365.08) Million, (N27,790.67) million and (N3,933.45) million respectively. The loss continued in 2021.  For the H1 2021 ended June 30, 2021, it declared a net loss of (N11,308.63) Million. The last time the company declared profit was in 2017; a profit of N1,395.23 Million.

In terms of return, it posted a good return, better than the NG Breweries and NG Market with relatively low volatility in share price movement.  Still on the positive side, the stock is considered undervalued; trading (N5.00) 75.5% below its estimated fair value of N20.39.  Picking undervalued stock is good especially with the anticipation of a sustained depressed sentiment as the market within the week ended September 17, 2021 witnessed bargain hunting for bellwether stocks.

However, because the company is unprofitable, its PE ratio could not be compared to the African Beverage Industry and the NG market.  Typically when you are buying stock in a company with a negative P/E, you should be aware that you are buying shares of an unprofitable company with associated risks.

Idika Aja, ACS, writes from Lagos and can be reached on 08034003768