Money has evolved through different mediums over the years. With the advent of technological innovation that has seen several sectors go digital, central banks are not left out. In keeping with the times, central banks have resorted to creating digital currencies for their citizens.

digital currency is the digitized version of a country’s currency used as a medium of exchange and is generated, managed and stored electronically. They’re usually stored in e-wallets rather than your bank accounts, and they can’t be withdrawn as physical cash. The version of the digital currency managed by central banks is called Central Bank Digital Currencies (CBDC).

African Central Banks Explore CBDC

This report estimates that more than 80% of central banks have launched or plan to launch a CBDC. According to this CBDC tracker, in Africa, only Nigeria has adopted its currency. Two African countries are in the pilot phase while 10 countries are still in the research and development phase. Egypt is inactive and Senegal has canceled.

Image Credit: Premium Times Nigeria

Central banks have said that establishing a digital currency is in the best interest of their national economies. The Nigerian state CBN governor echoed that same sentiment when he announced the launch of the e-Naira, the first live CBDC from Africa. According to him, fiat currency had the potential to contribute to the national GDP growth of $29 billion over the next 10 years.

Issuance of CBDCs can be categorized into two broad types – Retail CBDC and Wholesale CBDC.

Retail CBDCs, such as e-Naira, target individual consumers, the private sector, businesses, and non-financial consumers as end users. For now, however, the types of e-Naira transactions available to individual consumers include peer-to-peer (P2P), peer-to-business (P2B) and peer-to-governments (P2G) transfers.

The Ghana e-Cedi, which is in the pilot phase, is implementing a retail CBDC to bank the unbanked population and in doing so aims to foster financial inclusion and the use of digital services.

Wholesale CBDCs, on the other hand, primarily target financial institutions for related wholesale transactions.

South Africa

Image Credit: Ledger Insights

South Africa, which is the second country to launch small-scale CBDC trials on the mainland, is experimenting with a wholesale CBDC. The South African Reserve Bank detailed the experimentation of a wholesale central bank digital currency (wCBDC) as part of the second phase of the Khokha project.


The Harare Institute of Technology (HIT) Zimbabwe recently announced that it will be responsible for the development of the country’s CBDC. The institution’s vice-chancellor said the digital currency will be built on blockchain technology and aims to digitize trust and transparency, as well as eliminate cash hoarding and black market trading.

Eswatini, Kenya, Morocco, Namibia, Rwanda, Tanzania, Tunisia, Uganda, Zambia, and Zimbabwe are all currently in the research stage of CBDC development (meaning it has created working groups to explore the use case, impact, and feasibility of CBDC).

during this time at Namibiathe Governor of the Bank of Namibia, at a recent leadership event held in the nation’s capital, announced that a white paper on CBDCs would soon be released to further demonstrate the government’s commitment to transforming the financial sector.


Undoubtedly, centralized digital currencies have many benefits for national economic growth and as such, it is in a nation’s interest to explore their potential. Since there are different types of CBDCs, different countries will most likely explore a model aligned with its specific purpose and capabilities.

African countries exploring CBDCs. Image credit: Atlantic Council

Risks such as cyberattacks, vendor and technology risks, and potential systemic failuresare factors that have caused central banks to approach the concept of digital currency development with the necessary caution.

Although CBDCs are in their infancy, central banks will need to invest in their understanding and technological capacity of the concept. A successful launch will require cooperation between central banks and commercial banking institutions.