Professor of law and energy economics, Tayo Bello, has warned that the CBN’s cashless policy will dampen economic activities, especially across rural Nigeria.
Bello, who spoke with Nairametrics, said most of Nigeria’s rural communities do not have adequate infrastructure to support a cashless policy at this time.
The hindrances: Bello listed inadequate power supply and poor network services as hindrances to the working of the policy.
He added that the rural economy depends on physical cash as a medium of exchange to do business, stressing that N20,000 daily cash withdrawal will not support businesses.
Furthermore, Bello recalled that India attempted the same exercise but failed at it. He stated that Nigeria is an agrarian society where most people do not have any alternative to cash transactions.
More worries: Also speaking with Nairametrics, Ayomide Oduode, a POS operator, expressed fear that the new policy will put POS operators out of business. He said the policy will be delegating the services of POS operators to individuals, just like phone operators and recharge card sellers are being put out of business since people can recharge their phones from their bank.
A chicken seller, who trades in Ojo Local Government Area of Lagos, who pled anonymity said she cannot imagine accepting and making transfers for every transaction of the day.
She said currently, many transfer transactions fail. She said Nigeria is not yet prepared for the policy.
Suggested way forward: Dr Nelson Nkwo, who lectures at Ebonyi State University, said he does not support the policy. And his reservations stem from the possible impacts it could have on the people. To forestall these possible negative impacts, Dr Nkwo suggested the need for increased awareness to sensitise the people on the workability and merits of the policy. He said:
- “I do not support the cashless policy at this time because the country is not yet ripe for it; we need more time to sensitise people and make sure communication facilities are available. We don’t need to make policies and laws just because we have the power.
- “We must ensure that the poorest of the poor are put into consideration when making laws. This policy should have taken effect about a year later than now, or orientation should have started a year earlier than now. We have to look at other relevant laws underlying this money laundering law,” he added.
CBN’s cashless policy: Under the new withdrawal policy, the CBN is restricting the maximum weekly cash withdrawal over the counter (OTC) by corporate organisations and individuals to N500,000 and N100,000, respectively. It is subject to a maximum of N20,000 cash withdrawal daily for individuals.
The policy, which is expected to kick start on January 9, 2023, is eliciting criticism from some members of the public, especially traders and POS operators. However, the CBN clarified last Wednesday that PoS operators could apply for waivers.
CBN’s cashless policy will dampen economic activities – experts:
My response in a nutshell is that Nigerians especially the agency banking operators and related have to learn new ways of serving the communities they claim they represent.
No,it is a way forward.