CBN’s ‘Cashless’ Campaign

As the average Nigerian grapples with earning the modest of living, the government never ceases to bother him with grandiose policy decisions. In recent weeks, the Central Bank of Nigeria, CBN has been going about town with its “cashless economy” campaign, intended to encourage the e-payment culture.

As opposed to the use of cash that is currently the norm, the new initiative aims to encourage transactions by electronic means, mainly through Point of Sales, PoS terminals, and mobile phones. Already, the CBN has fixed 1 January, 2012 for the commencement of a test run of the scheme in Lagos. The bank has since embarked on massive campaigns to markets and city centres in the state, to sensitise the masses on the workings of the e-payment system.

The CBN governor Mallam Sanusi Lamido Sanusi, has said the bank does not intend going back on its e-payment plans. “We have reached a point in this nation where a combination of banking and telecoms is needed. So far, we have 60,000 to 80,000 terminals for Lagos. I can assure you that by January, the life of Lagosians will change in a significant way because the way we do banking is going to change.”

The initiative cannot be faulted for the simple reason that it is what has long obtained in advanced economies, because of the ease and safety it offers over using cash. But reservations about the idea flying in Nigeria remain, given the country’s peculiarities. It remains to be seen how this scheme would bring about the much touted ‘cashless society’, in the face of yawning infrastructural gaps, lax regulatory safeguards, and low literacy level.

For a country still struggling with constant power outage, a smooth deployment of the PoS might be hampered by unstable electricity supply, especially because the devices would be mainly used by small businesses already weighed down by the burden of running their operations on generators. The system would also contend with the occasional disruption to telecom signals as sometimes experienced by users of Automated Teller Machines, ATMs

The woes of ATM users regarding electronic fraud are also there for would-be users of the PoS to be deployed in the new scheme. Countless unresolved cases of pilfering of depositors’ money, through card fraud on the ATM platforms, cannot be a good advert for the mobile payment and PoS use being feverishly promoted by the CBN.

The low literacy level among market men and women, to whom the CBN has been directing the bulk of the e-payment campaign, is also a point to ponder. It is common knowledge the only language the average trader understands is “cash”, so the CBN has a tough job on its hands convincing the barely literate market people to adopt the sophisticated electronic payment mode.

To better tap the benefits inherent in electronic payment and achieve the success that it has been in parts of the world, including nearby Kenya, Nigeria would have to address the critical infrastructure issues that would make for the scheme’s flawless operation. It should also strive to change the general apathy that exists against electronic payment, so that the slogan that is the “cashless economy” now, can eventually become a reality.