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Using eNaira CBDC to solve economic problems in Nigeria

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  • Ozili, Peterson K

Abstract

This paper discusses how the eNaira central bank digital currency (CBDC) might be used to solve some economic problems in Nigeria. It presents the eNaira as a payment option, a monetary policy tool and a financial stability tool to solve some economic problems in Nigeria. I show that the eNaira can be instrumental in solving fiscal revenue challenges, controlling inflation, increasing foreign exchange accretion, managing exchange rate, addressing food insecurity, reducing financial stability risks, reducing poverty level, and recovering from a recession. The implication is that the eNaira can support the monetary, fiscal and regulatory authorities in preserving macroeconomic stability. However, a trade-off might arise among policy objectives if the eNaira cannot achieve multiple policy objectives at the same time.

Suggested Citation

  • Ozili, Peterson K, 2023. "Using eNaira CBDC to solve economic problems in Nigeria," MPRA Paper 118805, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:118805
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    File URL: https://mpra.ub.uni-muenchen.de/118805/1/MPRA_paper_118805.pdf
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    References listed on IDEAS

    as
    1. Agur, Itai & Ari, Anil & Dell’Ariccia, Giovanni, 2022. "Designing central bank digital currencies," Journal of Monetary Economics, Elsevier, vol. 125(C), pages 62-79.
    2. Davoodalhosseini, Seyed Mohammadreza, 2022. "Central bank digital currency and monetary policy," Journal of Economic Dynamics and Control, Elsevier, vol. 142(C).
    3. Gabriel Chodorow-Reich & Gita Gopinath & Prachi Mishra & Abhinav Narayanan, 2020. "Cash and the Economy: Evidence from India’s Demonetization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(1), pages 57-103.
    4. Jesus Fernandez-Villaverde & Daniel Sanches & Linda Schilling & Harald Uhlig, 2021. "Central Bank Digital Currency: Central Banking For All?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 41, pages 225-242, July.
    5. Kumhof, Michael & Noone, Clare, 2021. "Central bank digital currencies — Design principles for financial stability," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 553-572.
    6. Ulrich Bindseil, 2019. "Central Bank Digital Currency: Financial System Implications and Control," International Journal of Political Economy, Taylor & Francis Journals, vol. 48(4), pages 303-335, October.
    7. Klaus Abberger & Wolfgang Nierhaus, 2008. "How to Define a Recession?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(04), pages 74-76, December.
    8. Ohik Kwon & Seungduck Lee & Jaevin Park, 2022. "Central bank digital currency, tax evasion, and inflation tax," Economic Inquiry, Western Economic Association International, vol. 60(4), pages 1497-1519, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    eNaira; CBDC; central bank digital currency; fiscal revenue; inflation; foreign exchange; food insecurity; financial stability; poverty; Nigeria; blockchain; exchange rate; recession.;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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