Posted by On Friday, the Arewa Consultative Forum (ACF) protested the Central Bank of Nigeria’s new cashless banking policy, which will be in place as of January 2023.
Although the policy has some benefits, the organization claims that it was implemented at the wrong moment since the apex bank “failed to anticipate the unforeseen effects of executing it in the way they have planned.”
This was said by Malam Murtala Aliyu, secretary-general of the ACF, in a statement on Friday.
In the paragraph headlined “CBN’s Dangerous Plan,” Let’s be clear, the Central Bank of Nigeria, CBN, decision to begin the much anticipated cashless payments system in Nigeria with effect from January 2023 is fully warranted, possibly even well-intentioned, the ACF stated. Cash-based economies are infamously expensive, ineffective, and vulnerable to attacks from bad individuals.
“It takes a great deal of time and money to print the currency, and far more to move it through the system. There is a shelf life for the currency notes themselves, after which they must be replaced. Cash, which is hard to trace and very useful to terrorists, money launderers, smugglers, vote purchasers, etc., is the lifeblood of the underground.
“So, sure, it is better for law-abiding folks if there is less money accessible to all of these criminals, as the CBN is attempting to do. However, we must always keep in mind that the way to hell is paved with good intentions. Though CBN officials may have had the best of intentions when considering this strategy, it is clear that they did not take into account the potentially very serious unexpected effects of carrying it out in the manner they had envisioned.
“The informal sector of the economy will soon see a catastrophic collapse if the CBN continues to enforce this utterly unworkable policy that limits individuals’ cash withdrawals from banks to N20,000 per day, N100,000 for a week, or N500,000 in the case of corporate organisations. More than anybody else, CBN is aware that all commodity market transactions, particularly in rural regions, are cash-based.
“The villager who brings his chickens, beans, onions, goat, or cows to the market often does not have a bank account or knowledge of the internet. For most of the country, especially in the North, cash continues to be the predominant form of exchange. Nobody should be surprised by this as bank offices are rarely accessible, even to those who are motivated and skilled enough to use them.
“Even by the CBN’s reports, over 38 million adults in Nigeria do not currently have access to banking services with “women, rural dwellers, Micro-Small and Medium-Sized Enterprises and Northern Nigeria” being among the most disproportionately excluded.
And despite its pious pretensions, it is on record that the CBN under the present management, apparently out of desire to safeguard the interests of the commercial banks, has done much to undermine and stifle the progress of financial inclusion in Nigeria.
“Thanks to the CBN’s policies, Nigeria now has the regrettable distinction of having the lowest financial penetration in all of Africa, if not the entire world, despite its size. Given the situation, the CBN would benefit greatly from putting more effort into resolving these issues for both itself and the nation. The first step should be to make sure that several financial institutions are established across the nation in sufficient numbers.
It should promote collaborations amongst a variety of financial providers and create a level playing field for all of them.
“The CBN must also implement tight rules that safeguard peoples’ money. The public must be appropriately informed, inspired, and prepared for the shift.
“Until the CBN is able to address these challenges substantially, a preemptive move or a ‘frog-jump’ into a cashless payments system, however well intentioned, will only land us into a bottomless pit.”