Cashless policy: Policy implications on nation’s economy

BY EBUN SESSOU
Barely a year after the Central Bank ofNigeria, CBN, introduced the
cashless policy in Lagos State; Abia, Anambra, Ogun, Rivers, Kano and
the FCT have been enlisted to do same.
However, this development has been generating mixed reactions among
Nigerians, especially those directly affected.
Some opine that though the policy might be good for the economy, its
effective operations could be hampered by fundamental problems the
country is grappling with.
Dayo Babatunde, Senior Partner, Ernstand Young, explained that the
implication of the policy on the economy which largely depends on
micro businesses is that it will negatively affect uneducated
Nigerians.
"There are infrastructural challenges which might hamper the
efficiency of the policy. These include epileptic power supply and
non-availability of cash in the ATM machine.
"Lack of information technology is another issue because Nigerians do
not have a robust system for managing their information. Another
challenge is the aged population that will be negatively affected. All
these are challenges that might hinder the policy. I wouldn't shy away
from the fact that the system needs refining, modifications,
enlightenment and sensitisation of the people", he asserted.
Babatunde however added that, "We cannot fold our hands because of the
risk involved in this policy. If we refuse to take on the challenges,
there might be dangers in the future. Nigerians must learn how to
manage risks. If we are dwelling on the challenges at hand, then there
might not be a right time for it."
For Hon. Abiodun Tobun, a lawmaker representing Epe constituency 1,
Lagos State House of Assembly, the policy might be good but Nigerians
are not ripe for it at the moment.
"The system is not stable, the network is not stable; therefore,
mostpeople are faced with difficulties.
"I have discovered some fraud in the policy. A situation where an
individualcannot collect more than N500,000 or corporate institutes
the sum of N3m without paying excessive charges. The question is,
'where does the deduction go to?' Of course, it is an online charge
which is deducted by the CBN. Yet, we don't know who monitors the
account so as to know how much has been generated so far.
"Another challenge is the slow transaction that individuals encounter
in the course of transactingtheir business. There is the tendency for
an individual to be exposed to multiple charges by the CBN and banks
while still paying 'Charges on Turn Over', COT every month. This
implies that the financial institutions are exploiting innocent
individuals.
"Another constraint is the inefficiency of the Automated Teller
Machine, ATM.Sometimes, most people experience difficulties in
accessing it. They are then forced to be running from pillar to post
in order to get the finance to meet their needs.
"Therefore, to ensure the smooth operation of this policy in Nigeria,
measures should be put in place. There is a need for stable
electricity supply so that one is not frustrated while trying to use
the ATM. Our telecommunications providers shouldbe monitored so they
can compete globally.
Besides, some Nigerians are not educated on how to operate ATMs or
credit cards. So I think it should be a gradual process.
"As much as I accept that the policy would reduce movement of bulk
money from one place to the other, there is a need to put some
measuresin place before making it a phenomenon to be embraced by all
and sundry. I believe the Nigerian economy should be experiencing
massive improvement rather than allowing banks to feed fat on
innocent customers."
On the extention of the policy to five other states including the Fct,
he maintained that "Nigerians are not ripe for it until stringent
measures are put in place.
"I am not saying the cashless policy is not nice, but we are not
ready. Rather than extending the policy to other states, let the
government of the country put some measures in place that would
enhance its effectiveness. This was the position of the members of the
Lagos State House of Assembly when the policy was formulated. The
essence of the policy is to reduce the rate of armed robbery, money
laundering as well as other vices.
"Right now, people are faced with thechallenge of accessing their
funds. I believe people who applauded the initiative at its inception
are singing adifferent tune now.
"People are already complaining right now in Lagos State where it is
presently operating. So if it is extended to other states, I believe
it is just to the detriment of the people. The management of the CBN
should conduct an independent survey on the impact of the cashless
policy on the generality of the people before extending it to other
states."Asked how the policy could be readdressed, he suggested that
"the National Assembly should come up with measures that would
checkmatethis policy or stop the CBN from going ahead with the
programme if it continues to pose dufficulties in the lives of the
people. It is a national issue and it should be handled with national
interest."
On his part, Hon. Segun Olulade, Chairman, House Committee on
Information, Security, Strategy and Publicity representing Epe
Constituency 11, expressed some mixed feelings. To him, the policy is
a good omen for the economy, but lack of basic infrastructure is
limiting its success – especially in Lagos.
As regards its extention to five other states including the FCT, his
take was that the constraints involved might hamper the efficiency and
effectiveness of its operations. "The fact is our internet banking is
very challenging. And it is worse when it has to do with the lives of
the people as well as the economic situation of the country," he said.
Joshua Thomas, a businessman, opined that while the policy is ideal
for the well organised countries where governments encourage citizens
in all spheres, it would be a disaster in Nigeria where power supply
is not constant.