How Central Bank Digital Currencies Are Being Piloted Across the Continent

ABUJA — Africa has emerged as one of the most active regions globally for central bank digital currency experimentation, with the continent’s monetary authorities approaching the question of whether to issue a digital version of their national currency from strikingly different directions, at different speeds and with different stated objectives. Nigeria’s eNaira, launched in October 2021, stands as the continent’s most prominent example of a fully deployed retail CBDC, while Ghana, South Africa, Tanzania and others have pursued pilots or research programs of varying ambition. The diversity of approaches reflects the diversity of the continent itself: no single framework captures the different levels of mobile money penetration, currency stability, financial inclusion challenges and political economy that shape how each central bank assesses the case for issuing digital money.

Nigeria launched the eNaira as Africa’s first central bank digital currency and one of the earliest in the world deployed at national scale rather than as a limited technical pilot. The Central Bank of Nigeria framed the project around two primary objectives: advancing financial inclusion among the roughly 35 to 40 percent of Nigerians estimated to lack formal bank accounts, and providing an additional channel for government benefit disbursements that would be cheaper and more transparent than cash distribution. The eNaira wallet was designed to be accessible through a mobile phone without requiring a bank account, a deliberate architectural choice aimed at the unbanked population that the inclusion agenda targeted.

Adoption in the years following launch ran well below the central bank’s initial expectations. Usage figures from independent assessments suggested that the large majority of Nigerians had not actively transacted using the digital currency, even as mobile money transfer volumes through private payment rails — Opay, PalmPay, bank mobile apps — continued to grow strongly over the same period. The eNaira’s struggle illustrated a fundamental challenge facing retail CBDCs more broadly: awareness, trust and habitual behavior built around existing payment tools are difficult to shift through the introduction of a new instrument, however technically capable, without either strong incentives for use or distribution infrastructure that reaches people where they already transact.

The Central Bank of Nigeria responded by expanding the network of merchants and agents accepting the eNaira, introducing cashback incentives on transactions and integrating the digital currency into the government’s social transfer payment systems. Whether these measures have been sufficient to close the adoption gap meaningfully remains a subject of debate among Nigerian economists and payments experts, with some arguing that the eNaira’s design fundamentally needs rethinking and others contending that adoption timelines for new monetary instruments are inherently long and that the current trajectory, while slower than hoped, is not atypical for a genuinely novel payment product.

Ghana has pursued a more cautious, phased approach with its eCedi initiative, beginning with controlled trials among a limited group of users and merchants before considering any broader public rollout. The Bank of Ghana has emphasized interoperability with existing mobile money platforms as a central design priority, seeking to avoid competing directly with the mobile money ecosystem that already serves the large majority of the country’s digitally active population — a market in which MTN MoMo holds a commanding position. By positioning the eCedi as a complementary settlement layer rather than a competing consumer product, Ghana’s central bank has attempted to learn from the tension between CBDC ambitions and established private payment systems that has surfaced in several other markets globally. The eCedi pilot has involved testing both card-based and mobile-based access mechanisms, reflecting recognition that not all Ghanaians who might benefit from a digital currency have consistent smartphone access.

South Africa has taken a markedly different posture, focusing its central bank’s CBDC research most intensively on wholesale rather than retail applications. A wholesale CBDC — digital currency used for settlement between banks and financial institutions rather than directly by consumers — is argued by proponents to offer the most immediate efficiency gains from the technology, reducing settlement risk and cost in interbank transactions without requiring the mass consumer adoption that retail CBDCs demand. The South African Reserve Bank has also participated in multi-currency, multi-central-bank cross-border settlement experiments involving other regional monetary authorities, including Project Dunbar, which examined how wholesale CBDCs issued by different central banks might facilitate cross-border settlement without correspondent bank intermediaries. Results from such experiments have been technically promising while underscoring the regulatory and governance complexity of multi-jurisdictional arrangements.

Kenya’s central bank published research concluding that a retail CBDC was not currently a priority given the depth of mobile money penetration already achieved through M-Pesa and competing platforms — a notable instance of a major African monetary authority reaching a considered judgment that the distributed, private-sector model of mobile money had already solved the problem that a retail CBDC would otherwise be designed to address. The decision has drawn both endorsement and criticism: supporters argue it reflects pragmatic recognition that regulatory and technical resources are better deployed elsewhere, while critics contend that ceding the digital currency space to private operators indefinitely creates long-term risks for monetary sovereignty and public access to central bank money.

Tanzania, Rwanda, and Morocco have each announced or are conducting CBDC feasibility studies at various stages of development. Morocco’s central bank, Bank Al-Maghrib, has been among the more systematic in its approach, commissioning technical assessments of different CBDC architecture options and engaging with the International Monetary Fund on macroeconomic implications before committing to a direction. Rwanda, which has built a reputation as a regional technology governance leader, has examined CBDC in the context of its broader digital economy strategy, though without yet moving to a formal pilot phase.

Smaller and more economically stressed markets have approached the question with particular urgency but also particular complexity. Zimbabwe, whose history of catastrophic hyperinflation has permanently shaped public attitudes toward domestically issued currency, has explored gold-backed digital currency instruments distinct from the conventional fiat-denominated CBDC model. The Zimbabwean approach reflects a reality facing any CBDC project in a country with severe currency credibility challenges: a digital instrument denominated in a currency the public already distrusts gains little from being issued digitally rather than physically, while a gold-backed design introduces different technical and custodial complexities.

The technical architecture underlying African CBDC projects has varied considerably. Nigeria’s eNaira operates on a permissioned blockchain platform, while several other central banks have evaluated both distributed ledger and conventional centralized database architectures, weighing different tradeoffs around throughput, auditability, cost and resilience. International technology vendors and consultancies have positioned themselves prominently in the CBDC advisory space, offering African central banks turnkey platforms, a dynamic that has prompted some economists to raise questions about the degree to which vendor relationships rather than purely domestic policy considerations have shaped the pace and technical choices of specific CBDC projects.

Commercial banks in markets where CBDC pilots are underway have expressed concern about the long-term implications for their deposit bases. If retail CBDC adoption were to scale significantly, customers might shift deposits from commercial bank accounts into central-bank-issued digital currency, a phenomenon referred to as deposit disintermediation, with potential knock-on effects for banks’ ability to fund lending. Central banks have generally addressed this concern through holding limits — caps on how much CBDC any individual can hold — designed to limit the scale of potential deposit migration rather than to prevent it entirely.

Privacy concerns have also figured in public debate around several CBDC rollouts. Critics in multiple countries have raised questions about the extent of transaction visibility a central bank would have over individual digital currency usage compared with cash — which remains the most widely used truly anonymous payment medium — or even private mobile money platforms, which while not anonymous are at least operated by commercial entities rather than the state. Central banks have generally sought to address these concerns through tiered account designs that limit the amount of personal data associated with low-value, low-frequency wallets, though independent privacy assessments of these design choices remain limited.

As African central banks continue to weigh whether to advance from research to pilot or from pilot to broader deployment, the continent’s CBDC landscape will be watched closely by monetary authorities globally. Africa’s combination of high mobile penetration, large unbanked populations, significant remittance flows and diverse currency stability profiles makes it a particularly instructive testing ground for the question of whether central bank digital currencies can deliver on their financial inclusion and payment efficiency promise, or whether — as Kenya’s calculation suggests — the private sector has in some markets already delivered what a CBDC would otherwise need to provide.