When Mr. Sanusi Lamido Sanusi, Central Bank Governor, launched the cashless policy in 2012, it was received with mixed feelings. It was a good idea, many people thought, but was Nigeria ripe and ready for it? In Nigeria, there are always people who think we are not ready or ripe for anything that people elsewhere, including Africa, are already doing. We have been squabbling about electronic voting since 1999. I remember that some experts came from abroad and made presentations to our election managers, the National Assembly and the Federal Government of Nigeria. It seemed to most people that we were about to modernise our election system to eliminate the fraud that has dominated our elections for years. But everything just fizzled out in a puff of opposition by those who want us to live with the horrible spectacle of election rigging and the shame it brings to our country.
However, it is good to know that, even after Mr. Sanusi left, the cashless policy has remained. Mr. Sanusi’s successor, Mr. Godwin Emefiele, has expanded the service and tackled some, though not all, of the problems that accompanied the policy.
It seems to be an accepted custom in our country that, to implement policies, you don’t use persuasion. What you need is punishment. So, Mr. Sanusi started by imposing a penalty on people who brought a large sum of money for deposit. I thought irrespective of what the bankers felt as a way of implementing the policy, fining people for bringing their money to the bank for deposit was going to be counter-productive. Many people resorted to opening several bank accounts as a means of beating that policy. Others wondered whether it was not a better idea to continue putting their money under their pillows, under their beds and in the ceilings of their houses, if they were going to be punished for patronising the banks.
In the first place, most local governments in Nigeria do not even have banks. In the Gen. Ibrahim Babangida days, many of the local governments had community banks but for several reasons they began to vanish one by one. So, it seemed that the banks, which have been making money cheaply and easily, were not really interested in people who were ready to travel long distances to take their money to the banks for deposit. Mercifully, Mr. Emefiele has removed the penalty on cash deposits because he realises that in most rural areas in Nigeria business transactions are strictly on a cash basis. Because there are no banks, commercial or community, rural dwellers cannot issue cheques or do bank transfers without having to travel long distances through treacherous roads to do their business transactions.
Obviously, there are many benefits of cashless financial transactions, where there is available infrastructure. The risks of moving cash about is eliminated; it can reduce, if not eliminate, cash-related fraud in banks, which has been quite prevalent. Some banks have tried to deal with the menace by telling customers to count the money they receive before leaving the counter. The fraud takes several forms: incomplete payment to the customer by the cashier and when you discover it they say “oh, it’s a mistake” and yet he or she has a counting machine on his or her desk. Sometimes, the cashier buries 200 naira notes in bundles of 500 naira notes in the hope that, since the sizes are the same and the colours are somehow close, the customer will be duped. Oftentimes, the customer who is in a hurry can get swindled. However, some of the banks now insist that their cashiers must use the counting machines to confirm the figure in the presence of the customer. This has reduced cases of fraud considerably.
The cashless policy has made it possible for customers to engage in financial service delivery through various channels, such as Internet, ATM, mobile phones and point of sale (POS) machines. In our own setting, these services are still relatively limited because of low or limited Internet access, limited number of banks and ATMs, especially in rural areas, erratic Internet service and the general illiteracy of the populace. It will definitely take some time to overcome most of the shortcomings. Mr. Emefiele, who has the ambition of implementing the policy nationwide, says: “We had to wait a while because we felt that there was need to be sure that the rate of financial inclusion in Nigeria has effectively penetrated all the nooks and crannies of the country for us to proceed on cashless banking. Very soon, all the structures that have been put in place would improve banking services in Nigeria.”
Good talk, but it is a very optimistic view of things as they are now. I don’t know about other local governments but in my own local government, Ukanafun, in Akwa Ibom State, there is not even one bank, community or commercial, and there is not even one ATM. And this local government has 86 villages. There is only one police station with only one police van. The nearest bank is 40 minutes away from the local government headquarters. When you look at the state of insecurity in the country, when banks are robbed randomly, you then have to think through all the steps needed to implement this policy, which has a lot of inherent benefits. Even in the towns and cities where this policy is currently operational, there are still hitches here and there. Last week, I bought some goods from a store in Magodo, flashed my mastercard debit card at the cashier, “Do you accept this here?”
“Yes,”she said, promptly. I gave her the plastic and told her it was a current account. I punched the four digit numbers for her on the POS machine. She turned the face of the machine alternately to the North, South, East, West and other points of the compass. No luck. We started the ritual all over again, and I punched my four digit numbers again into the machine. I think I did it three times before the machine closed our transaction.
“I hope your machine will not deduct my money more than once?” I said to the cashier. She said, “No, it won’t.” “Are you sure,” I asked. “I am sure,” she said. I took the goods and went away.
The next morning, I found that the machine had deducted my money three times. Fuming with anger, I rushed to the store and asked for my money to be refunded. The official gave me an unsolicited lecture on how the system works, namely that I have to go to my bank and ask them to reverse the deductions. And I said to him: “But the bank did not deduct my money; you are the one who asked me to punch the machine three times. My business is with you, not with my bank.” My grammar took me nowhere.
I had to go to the bank. The bank gave me a form to fill. The bank told me that the deductions would be reversed within 10 working days. Is that a system that anybody should trust? Is that a system that anybody should recommend to anybody who doesn’t want to be going to the bank because he did a simple transaction at a shop? Certainly, there is something wrong either with me or my debit card or the shop or the bank or the air around the shop. Anybody who goes to a shop to make a little purchase and thinks his smart card can help him must know that it is not as simple as that. What should a man who goes through what I went through do?
Using a debit card is very helpful if the system works. Then you don’t have to carry cash, including coins, which can punch holes in your pocket. In any case, you can hardly find coins anywhere because coins can hardly buy anything in Nigeria. When you pay cash in some shops, the cashier will tell you matter-of-factly, “No change.” He expects you to walk away and leave your change for him or her. In order to assuage your anger at being told “no change,” the smarter ones will tell you: “you can pick something to cover the change we owe you.” Selling by tricks.
So, a lot of these fraudulent antics of cashiers can be eliminated by the use of electronic devices, if everything works well. Mr. Emefiele needs to tread softly and steadily in his ambition to provide cashless transaction nationwide. He must persuade the government, if he can, to improve the security situation. He must persuade the banks, if he can, to extend their services to the rural areas, instead of concentrating on the cities. The banks always complain that banking cannot be sustained in the rural areas. But if banks are not there, business people in those areas will continue to hide their money in their homes, instead of putting it in the banks. If businesses are not encouraged to grow, the banks cannot significantly expand their turnover and their profit.
For a semi-seamless operation of the cashless policy the police and other law enforcement agents must deepen their knowledge of the Internet and the immense possibilities of electronic banking fraud better known as Yahoo-yahoo. The CBN and the banks also need to organise public enlightenment seminars for stakeholders because many people still need to be persuaded to come on board.
For every new scheme, there are often some hitches. People need to be convinced that these hitches are not permanent, that they are remediable within a convenient space of time and that, when violations occur, violators are punished. The CBN has complained that people misuse the Nigerian currency by spraying and marching on them at public functions. This is a society whose values are built on ostentation, so people will continue to do the spraying business. They actually go out of their way to buy clean notes for the purpose of spraying. Perhaps when we have the cashless policy working at full throttle those who have the instinct to spray at parties may, in the absence of mint fresh notes, just donate ATM debit cards complete with the pin to the celebrants. That will be the measuring rod of the policy’s workability.