IN every society, the prosperity of the people transmits into the development of the whole political system. Therefore it is the duty of government to put in place policies that would culminate into the prosperity of the majority. Such policies would assist in no small way in the reduction of social vices and the promotion of a more egalitarian society. However, such policies need to work in tandem with other policies before the objectives can be achieved.
THE cashless policy of the Federal Government of Nigeria had been in place in staggered phases of implementation. The cashless policy which came into effect in Nigeria since 2012 is hinged on physical cash with electronic money, which is broadly defined by the European Central Bank as “an electronic store of money value on a technical device that maybe widely used for making payments to undertakings other than the issuer without necessarily involving bank accounts in the transactions, but acting as a prepaid bearer instrument”.
PRIMARIALY, the cashless policy was aimed at reducing the amount of physical cash circulating in the economy. Within the period of practice the operation of the cashless economy in Nigeria has increased the ease of payments, provided better and numerous payment options, as well as cheaper and comfortable access to banking services and also enhanced the monitor of transactions, thereby curtailing cash related crimes. In addition, more revenue is saved given the reduction in the cost of currency printings and reduced cash handling costs.
THE Hope affirms that cashless policy is the best for the nation in this period of globalisation, but also observes that for it to work, the citizens need to operate bank accounts and also have money in such accounts in order to operate cashless transactions. So, government has to make policies that would encourage savings, and operation of bank accounts by majority of the citizens. With a minimum of 1.25% as interests on deposits, and an inflation rate of 14.25%, money depositors are actually paying banks to keep monies in the bank, with little or no gains.
THIS coupled with stamp duties, card maintenance charges and other costs would discourage savings in this period. These would discourage savings, and also impinge on the implementation of the cashless policy. Therefore, while the policy forbids the collections of cash beyond certain levels, Nigerians would demand for cash intermittently thus reducing the value of money deposits in banks, and also reduce the amounts that may be readily available for loans.
FURTHERMORE we have observed over the years that the problems associated with cashless banking still affect the transactions. For example, the nation still suffers from the infrastructural deficiencies such as poor network connectivity, high cost of transactions and interests; and of course machine transactions that often lead to double debiting for single transactions. It is sad to note that increased internet cash frauds have also increased the phobia for cashless transactions in Nigeria.
THE rural areas that are custodians of the nation’s agricultural revolution are also not able to benefit from the operations of the cashless policy. While all the problems associated with the policy also bedevil these areas, the non existence of banks in proximity with the farmers also hampers the implementation of the policy.
THE Hope therefore enjoins the Central Bank of Nigeria to initiate policies that would encourage the use of banks for transactions at times as this. Furthermore, while Nigerians have used debit cards for most of their cashless transactions, the CBN should also introduce the use of credit cards for cashless transactions. With credit cards, Nigerians may be able to purchase goods before inflations reduce the power of their money.
THE rewards on the credit card usage also helps to cushion the effects of costs on the use of these cards, while the buyer protection associated with the usage of credit cards also reduces the tension and skeptic phobia associated with cashless banking. Furthermore, consumers are less restrained by the value of the cash-in-hand to meet basic needs. Of utmost importance is the fact that demand for paper cash reduces, thus reducing the cost of cash handling in the economy.
THEREFORE, if experience is truly the best teacher with regards to educating the masses concerning the efficacy of the cashless policy, which we support, the government should ensure that it reduces the operational hiccups in the implementation of the policy; while banks should also up their game in effective service delivery that promotes the embrace of the cashless policy.