Nigerians are made to face harrowing experiences as they spend many hours in long queues at the bank halls, premises and ATMs hoping to swap their old Naira notes with new ones. Wary and cash-strapped Nigerians now live for days without money for their basic needs and upkeep as they still grapple with the essence of the cashless policy.
Nigerians love using their physical currency as reports suggest that since the policy was introduced in 2012 about 90 percent of transactions are still carried out in cash despite the introduction of many electronic modes of payments, including Universal Supplementary System Data (USSD), banking agents, mobile bank transfers, mobile money, Point of Sale (PoS) and QR codes.
The federal government’s push for a cashless economy is generating a lot of anxiety and tension in the country. Essentially, going cashless is an ambition of the Central Bank of Nigeria (CBN) that goes back eleven years ago when the apex bank moved to implement its first policy in Lagos and later Port Harcourt. The central bank views the cashless policy as a means to reduce the amount of physical cash in circulation.
Godwin Emefiele, the governor of the central bank, was quoted to have said in November last year that the apec bank had put in place several electronic channels to aid people to conduct banking and financial services transactions in the country in preparations for this current measures. This claim remains contestable in the face of present realities. It is pertinent to note that the CBN was compelled to step down the policy on three or four occasions when it realised that there is a need for it to adequately prepare and deepen payment system infrastructure across the country before forging ahead with the policy.
Now some weeks after the commencement of the new cashless policy in which the CBN pegged individual withdrawals at N20,000 daily and a maximum of N500,000 while corporate organisations are restricted to N3 million cash withdrawals, the economy has turned drastically cash crunched. This is happening despite the reported increase in the number of payment channels. According to data from SANEF, the number of Automated Teller Machines (ATMs) rose from 10,865 in 2011 to 19,355 in 2021. The number of PoS terminals rose from around 155,000 to 1.1 million as of April 2022. And the number of active banking agents is over 1.9 million. Yet,
the newly designed Naira notes are not readily available at the ATMs as commercial banks officials are reportedly colluding with currency racketeers to deprive customers of access to the new notes and breaching the CBN regulations.
With the latest policy and non-availabllity of redesigned naira notes, the volume of cash in the markets has dropped drastically, affecting many small businesses and individuals that depend on cash for transactions. With the new naira notes unavailable, many more people are turning to electronic payment to conduct their transactions.
Even at that, Nigerians are not always having it easy and seamless as expected when conducting transactions via the channels.
Similarly, entrepreneurs with ideas to improve the cashless drive are not also finding it easy as terminal owner policy at CBN and NIBBS is extremely frustrating.
Similarly, the banks are also not living up to consumers’ expectations. According to a recent survey, the number of bank branches across the country reduced from 5,392 in 2019 to 5158 branches in 2020. Not much has changed as of 2022 given the economic meltdown the country has been facing and the banks investing more in their digital banking platforms. This often implies that customer complaints are not easily resolved. This leaves greater pressure on the payment channels. Bank ATMs are malfunctioning more frequently than they do in the past due to the increased demand for their services.
The northern governors have profusely complained about this matter. Yobe State governor Mai Mala Buni stated that out of the 17 local government areas in his state only 4 have banks operating, while last weekend, Kano State Governor Umar Ganduje, said there was no bank presence in 24 out of 44 local governments in the state.
More so, the infrastructure is not evenly distributed. Between 2017 and 2022, the number of PoS terminals in Nigeria grew significantly, from around 155,000 to 1.1 million as of April 2022. About 60 percent of those terminals are domiciled in Lagos which also has the largest concentration of banking agents at over 281,631. It is also the state with the highest agent per 100,000 adults at 3,412 agents per 100,000 adults. On the other hand, Yobe State with largely rural dwellers has the lowest number of agents at 8,194 while Jigawa has the lowest number of agents per 100,000 at 330.
Apart from the banking agents not being everywhere as expected, unfortunately cases of PoS transactions declining or not completed are rising.
Expressedly, with what is on the ground presently, the apex bank should conscientiously tinker with the nationwide cashless policy as it cannot run ahead of the infrastructure deficiencies and limitations of the country. I strongly feel that to attain a cashless policy, the CBN needs to ensure the expansion of the banks’ physical infrastructure. When all these are in place; Nigerians will embrace cashless transactions without any problem.
