There was no newsletter last week. This was because it fell on the same day as the #EndSARS memorial. I did have a post lined up but I decided to set it aside.
Although I made an announcement on my Twitter page, I’m still going to extend my apologies to those of you who were expecting a post and didn’t get any. I’ll try to make up for it with this one.
One of the unreal stories I read this week was from South Africa. An ex-policewoman who was found guilty of killing five relatives and her boyfriend. More interesting was the motive behind the murders which was to claim the life insurance policies of all her victims.
I had only ever heard of this form of insurance fraud when watching TV shows. I’d never thought someone in the real world would be capable of such horror. Not once but six times! Truth really can be stranger than fiction.
In fact, the only reason she was caught was because the person she hired to carry out a hit on her sister and her five children took the matter to the police who then set up a sting operation that eventually put her nefarious plans on hold.
Take a moment to imagine the depths of that woman’s turpitude for a hitman to grow a conscience and say “Nah, not doing this. Gotta snitch on you ma’am!”
Another story which caught my eye was from China. Li Jiaqi, a popular Chinese live streamer, sold about $3 billion worth of goods online in 12 hours. And what was he selling mostly? Cosmetics.
Jiaqi is known there as the ‘lipstick brother’. He’d try out various brands on his stream and make his recommendations, either to go with or discard.
By his admission his average number of viewers hovered around 20 million. At the end of Wednesday’s half-day marathon he had amassed 250 million viewers with billions in sales to match.
Just take pause to think of how huge this is. For context, Twitter makes $3.72bn in revenue annually. One streamer from China just about matched that in 12 hours. And he was not alone. A couple of others also made similarly outrageous sales within a short period proving that live e-commerce may very well be here to stay.
The really big news which is most relevant in the Nigerian context is the CBN’s official launch of the e-Naira. In my previous post, I worried about whether it would gain acceptance by Nigerians. It would appear that is just one of several concerns.
For one, accurate information about what the e-Naira is—and isn’t—is hard to come by. Even the experts are somewhat unsure of what it is. Clearly the CBN has not done a great job in properly disseminating information.
An economics professor and a former economic adviser to the American government, Steve Hanke, had this to say about the e-Naira:
“Nigeria's central bank has launched a digital currency, eNaira, just months after barring financial institutions from transacting in crypto. Wrong move. The naira’s junk. Today, I measure inflation at 29.75%/yr. No.1 priority should be inflation control.”
The point to keep in mind here is that as the currency keeps losing value its appeal as a digital swap would be almost nonexistent. As one Twitter commenter notes, the e-naira is not backed by physical cash which makes the CBN the real winner as it may be able to mint at will thus raising fears of further inflation.
The fact that we already have multiple POS agents on just about every Nigerian street makes one wonder what the purpose of the e-Naira is. What novel idea does it come with? What problems does it solve for the average Nigerian? Money in the e-Naira wallet does not accrue interest, nor is it fungible enough to be used for international transactions.
Concerns about the app not undergoing beta testing have been at the fore as well which comes with the risks of it suffering glitches or being susceptible to hacks. It eerily feels like the case of a regulator competing in a space it should be regulating. If there are any lessons to be gleaned from similar actions with the NNPC in the oil industry it is that this rarely ever ends well.
It doesn’t help either that a prominent account of the e-Naira handle on Twitter belongs to a known pro-government (BMC) supporter which very well tells you all you need to know.
One expects that the handle will be disowned soon as after all Twitter is still banned in Nigeria. It would be farcical and yet unsurprising to have the CBN communicate via a proscribed platform.
If you need any more proof that the e-Naira is up to a rocky start, here’s a screenshot from their website. No more words necessary.
Meanwhile, a popular finance expert has argued that the move would help boost financial inclusion especially among the large section of the population without a bank account.
Yet, I would counter that I just don’t see it. This feature already exists on mobile money applications like Paga and Opay. Why for instance, should the market woman be bothered about downloading the e-Naira when she already has multiple channels to receive her cash?
Or to better put it, what incentive does the CBN have in mind to get the e-Naira widely adopted aside from press releases?
Perhaps the CBN governor, Godwin Emefiele, might want to take a cue from the government of El Salvador who offered all adult citizens that downloaded and registered the government’s cryptocurrency app $30 worth of bitcoin.
This is Nigeria though and I won’t hold my breath on that one—and neither should you.
Another amazing newsletter 👏.. I honestly feel that Nigeria 🇳🇬 has way more pressing issues than this e-naira. Improving the economy and value of the actual naira for one is a good start.