19th May, 2011
The Central Bank of Nigeria’s recent policy on cash withdrawal and lodgement set to take off next year may not be the best for Nigeria right now.
While we agree that all over the developed world, the electronic payment system is the norm, many things will work against it in our clime, least of it our attitude to banking.
It has been estimated that over 60 per cent of Nigerians are unbanked as most are not interested in opening bank accounts for several reasons. Why then do we think we are ripe for cashless transaction?
In an era where the stability of many banks is questionable, many Nigerians have opted for keeping their cash under their mattresses and while this may not help it, at least guarantees that they can always reach for it whenever it is needed.
We believe CBN’s cashless policy would not work until perhaps uninterrupted electricity supply can be guaranteed.
These lofty ideas are desirable but we must learn to crawl before attempting to run. Already, not a few Nigerians have vowed not to ever touch the Automated Teller Machines, ATM, again as they have had their fingers burnt through numerous problems associated with the transactions on the magic cash boxes. Millions of naira have been lost to ghosts and the banks have, several times, refused to refund losses in cases of genuinely phony transactions, some of which take place as far as 500 miles from the owners of such cards.
We think the CBN should have consulted widely before ramming the policy down the throats of Nigerians. What now happens to the information sector which deals in cash? What happens to Nigerians who are illiterate, aged or disabled?
Agreed, the currency outside the bank vaults is staggering but limiting daily cash withdrawals to N150,000 for individuals and N1 million for corporate bodies is simply ridiculous in today’s Nigeria where traders sell and buy in millions of naira and many remain unbanked.
To become a cashless society in just about one year when countries practicing it took decades to implement same policy, is asking for too much. The CBN Governor, Mallam Lamido Sanusi is asking for too much from Nigerians.
Before introducing the new policy, the CBN should take a look at the current state of e-banking and e-transaction in the country. We believe that the migration from cash to e-transaction in just 12 months is impossible in today’s Nigeria.
Rather than enforce it with military precision, the CBN should try a better approach: create public awareness on the policy, throw it open and sound out Nigerians on what they think about it. This should take a couple of years.
If care is not taken about the rush to implement the policy, the CBN may find itself in trouble as cash in banks may shrink when people decide to keep their money at home instead of banking it.
Even today, how many Nigerians would accept uncleared cheques before releasing the goods? Such is the mistrust that fraudulent activities of some Nigerians have generated in the minds of people.
In a country where the majority are not computer literate, the CBN’s policy is bound to fail. We need to take things one step at a time. How many Nigerians have embraced ATM, Value Card and other e-transactions? This is a pointer to what may bedevil the new policy.
Most educated Nigerians believe that payment cards like debit cards, credit cards and security technologies like Chip and PIN and Payment Card Industry Data Security Standards will help in making payments more convenient and more cost-effective than carrying cheques and cash, but then, they are in the minority.
Let’s take another look at this policy. It is not too late to do so.