MEDIATRACNET
The cashless policy of the Central Bank of Nigeria (CBN) is a good policy to boost inclusion in the banking sector, but it would require an adequate supply of electricity and the provision of telecommunication infrastructure to be effective, an economist, Chiwuike Uba, has said.
Uba spoke to the News Agency of Nigeria (NAN) in Enugu on Sunday amid the controversy trailing the apex bank’s redesign of the Naira and the decision to limit cash withdrawal across the counter to encourage the use of electronic/cashless payment systems in the economy.
He urged the Federal and state governments to support the CBN initiative to work by investing in the provision of a stable supply of electricity and telecommunication infrastructure for Nigerians to maximize the gains of the cashless economy.
“Without adequate provision of these infrastructures, Nigerians and indeed the country will find it hard to reap the enormous benefits associated with the cashless policy on the economy as observed in developed countries,” Uba said.
, said.
Uba, who is the Lead Researcher of Afri-Heriatge, an economic-political research and analytic institution, said the provision of these necessary infrastructures currently were inadequate to effectively implement the cashless policy.
The economist who is also the Chairman of the Board of Directors of Amaka Chiwuike-Uba Foundation (ACUF) noted that in most cases, it takes months for banks to resolve and reverse failed transactions due to very poor banking network and inter-bank connectivity issues.
He said the redesign of the Naira and the recent cash withdrawal limits announced by the CBN were, without any doubt, good policies geared toward the migration of transactions from physical cash to electronic money.
The brief transitional period given for bank customers to return the old currencies for the newly redesigned banknotes was not the best strategy to prevent asset bubbles by slowing the flow of black money into the sector.
“If well managed, digital and electronic transactions will create a better audit trail for tax, accounting and security. The infrastructures and platforms necessary to effectively and efficiently implement the cashless policy are not currently in place in an adequate manner.
“Market frictions and distortions and disruptions to electronic banking services (poor banking networks, unreliable electricity and telecommunications services) have not been addressed,” he said.
The economist called on the CBN, banks and their agents to embark on an immediate, aggressive, and widespread awareness and education campaigns on the cashless policy and its enormous gains in rural localities in the country.
“This is imperative given the large and growing army of illiterates in Nigeria, appropriate awareness and education should have preceded the launch and implementation of the policy,” he added. (NAN)
