Nigeria’s Cashless Policy Goes Nationwide – CBN

by Ike Obudulu Last updated on August 31st, 2017,

Building on the success of the pilot programme for the cashless policy introduced by the Central Bank of Nigeria (CBN), the Nigerian Bankers’ Committee has concluded plans for a nationwide rollout. The Bankers’ Committee consists of all the CEOs of all the deposit money banks (DMBs) in the country. This was confirmed, at the Committee’s inaugural meeting by the Head Shared Services Office of the CBN, Chidi Umeano.

According to Umeano:

“We have very interesting statistics to show that there has been a lot of shift really from cash to other forms of payment, we have figures to show that a lot of those activities have gone up trillions of Naira on yearly basis so we think it’s now time to review and restart. We have 30 states to go. By the first of May we will take on the first 10 states, by first of August, we take the next 10 states and by first of October, we take the last 10 states making it the 30 states for a nationwide rollout.In taking these decisions, the committee has taken care to make sure that the vulnerable amongst us are well protected. We do know that transactions that happen in the banking sector today in terms of cash withdrawals and deposits are less than 10 per cent nobody is really affected by this we are trying to shift emphasis from cash to other forms of electronic payments and the industry has since expanded and gone out of its way to implement all kinds of channels.”

Cashless Economy In A Nutshell: In a cashless economy, all transactions are done using cards or by digital means. This means  use of e-commerce, mobile banking or Internet banking for purchases and transactions

Advantage for the society

Reduces the circulation of paper money.
The black market or parallel market can be curtailed.
Easy to handle.
The transaction process and purchase will be easy.
No gotcha moments when you don’t have exact change.
Less violent robbery.
No difficulty moving money.

Advantage for the Government

The government can control the financial transactions in the society.
More transparency and easy to track money laundering and other such activities.
Helps to eliminate counterfeit currencies.
If the government finds a person guilty government can easily block his/her transaction.
No worn out currency that has to be replaced

Disadvantage of cashless economy relates to cyber fraud and hacking which can lead to a collapse of the economy if adequate security controls are not put in place. Also there is no way to get by with change when the Internets aren’t working. There is no physical constraint on the money supply — not even fiat paper.

Thus with a strong security system in online processing to avoid hacking and cyber fraud, a cashless economy is beneficial for both the society and for the government.

Author

Ike Obudulu

Ike Obudulu

Versatile Certified Fraud Examiner, Chartered Accountant, Certified Internal Auditor with an MBA in Finance And Investments who has both worked for and consulted with some of the world's largest companies on main street and wall street in over 20 countries, Ike brings his extensive reporting and investigations experience to bear on his role as Chief Editor.
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