The plan by the Central Bank of Nigeria (CBN) to extend the cashless policy nationwide is good for the economy. Its benefits are numerous for individuals, corporations and government. High cash usage sometimes results in a lot of money outside the formal economy, thus limiting the effectiveness of managing inflation and encouraging economic growth.
Besides, high cash usage enables corruption, leakages and money laundering among other cash-related fraudulent activities. Also, a cashless policy increases convenience for customers, more service options, reduces risk of cash-related crimes, cheaper access for out of branch services, as well as making it easier for organisations, government and its agencies to access credit. It can also reduce revenue leakage and minimal cash handling and increased tax collection.
In spite of its advantages, we advise that its implementation should be handled with cautious optimism because of the peculiar nature and structure of our economy and the banking customers, particularly those living in the rural areas. The new date for the policy to take effect nationwide is yet to be announced. It is, however, believed that the apex bank has carefully thought through the reintroduction of the policy after it suspended its nationwide implementation in April 20 17.
The Governor of CBN, Mr. Godwin Emefiele, has assured that the necessary structures have been put in place to improve banking services across the country. He said the decision to halt the introduction of the policy nationwide until now was to ensure financial inclusion across the country. The new plan is in collaboration with non-finance entities and banks which will be critical in building a robust financial system that has a wider reach and better integration across different payment gateways in a reliable, secure and convenient manner.
Introduced in January 2012, the cashless policy, which commenced in Lagos and Abuja, had eased pressure on cash transactions in the banking sector and checked illicit cash outflows. Under the policy, CBN raised the daily cumulative cash withdrawal limit for individuals to N500,000 and N5million for corporate accounts holders. Extending this policy nationwide will require thoroughness to avoid the drawbacks that led to its earlier suspension.
Though the CBN is at liberty to make changes in any monetary policy it deems necessary, the nationwide implementation of the cashless policy must be made seamless. We believe that the cashless policy will be helpful in paying for goods and services across the country. For its implementation to be successful, it should not be rushed.
More Nigerians should be included in the nation’s banking system. Efforts should be made to ensure that many Nigerians have verifiable means of identification such as Biometric Verification Number(BVN) or the national identity card. In that regard, an effective nationwide implementation of this policy must be anchored not only in reducing the challenges associated with too much cash transactions, but having the foresight that the policy adapts to the environment and to the satisfaction of the people.
We reiterate our support for any policy that will drive our economy and satisfy the financial needs of the citizens. We want to believe that the CBN has actually put in place measures that will support the growth of the banking system in the future. The CBN has assured that the measures it has put in place will ensure for the success of the policy.
Considering the crucial role of the banking industry in the economy, there should be no room for errors in the implementation of the cashless policy. Before the policy was suspended two years ago, many Nigerians, especially those living outside the urban centres, were not fully enlightened on the benefits of the policy.
Even now, we do not think that the situation has significantly changed. Therefore, we call on the CBN to embark on more public enlightenment on the policy.