Namibia is exploring the possibility of launching a central bank digital currency (CBDC) to enhance cross-border payments and expand financial inclusion. The Bank of Namibia (BoN) remains in the early stages, assessing whether a CBDC can effectively address the country’s payment challenges. This follows a recent technical assistance mission from the International Monetary Fund (IMF).
However, the IMF is not fully convinced. While supporting BoN’s research, it has advised against rushing into a full rollout, instead recommending improvements to the country’s existing payment infrastructure before introducing a digital currency. The IMF also questions whether a retail CBDC (rCBDC) would significantly improve financial inclusion as Namibia hopes.
Despite these concerns, BoN is moving forward, engaging with central banks in Eswatini, Lesotho, and South Africa to explore how a CBDC could facilitate smoother cross-border transactions. The bank has acknowledged the IMF’s recommendations and is refining its approach before making any final decisions.
Namibia first introduced the idea of a digital Namibian dollar in 2022, publishing a consultative paper on CBDCs. Since then, progress has been slow, with discussions primarily centered on potential use cases with neighboring central banks. This cautious approach reflects the challenges other African nations have faced with CBDC implementation.
Nigeria’s eNaira, launched in 2021, has struggled to gain traction, while Zimbabwe took a different route in 2023 with a gold-backed digital currency to counteract currency devaluation. Ghana’s eCedi has been in development for years, yet despite successful pilot programs, it has not been fully deployed.
For now, the question remains: will Namibia proceed with a CBDC, or will it prioritize strengthening its existing financial systems? BoN appears to be treading carefully, weighing its options before committing to any major moves.
