By Adejumo Samson
In recent years, the Nigerian government has been implementing policies aimed at promoting a cashless economy. The policy, which was introduced in 2012, seeks to reduce the amount of physical cash in circulation and promote electronic payments. The aim is to increase efficiency, reduce corruption and fraud, and improve financial inclusion. However, there have been reports of exploitation of the cashless policy in Nigeria.
The unveiling of the redesigned 1000, 500, and 200 Naira notes by the Governor of the Central Bank of Nigeria (Godwin Emefiele), on 26 October 2022, brought the populace to a state of exasperation, which result in violence in a different state in the nation.
Although, sometime in 2012, Governor Sanusi Lamido-led Central Bank of Nigeria, CBN, toyed with the idea of introducing a cashless policy in the country for more reasons than one.
According to him, the policy, when implemented, would reduce the quantum of physical cash that was being used in the system in an attempt to cut down on cash handling expenses of banks.
He said the policy was also targeted at getting more of the money in circulation into the system as well as tracking money laundering activities.
Although the policy had taken effect in seven states, namely: Lagos, Abia, Anambra, Kano, Ogun, Rivers as well as Abuja while Sanusi was at the helm of the affair, yet, the CBN under the leadership of Godwin Emefiele, in August 2015, suspended the policy to allow banks deploy the technology that would allow the policy to operate seamlessly.
CBN suspended the implementation of the cashless policy in 2015 Why?
Since 2015, technological advancement in the Nigerian banking industry has grown exponentially to become one of the best in the world.
The policy was re-introduced in 2019 and by October 2022, the CBN Governor, Godwin Emefiele stated that the apex bank is committed to making Nigeria 100 per cent cashless. According to Emefiele, all infrastructure that is needed to ensure a smooth working cashless system such as the CBDC, online banking, Payment System Banks, PSBs, Point of Sale terminals, POS agent banking, mobile banking and ATMs have since been deployed, adding that the destination was to achieve 100 per cent cashless economy in Nigeria.
One of the primary forms of exploitation of the cashless policy is through fraudulent transactions. Criminals take advantage of the policy to carry out illegal transactions, which are difficult to trace. For instance, they can use stolen credit or debit cards to make payments or transfer money electronically. Fraudsters can also obtain people’s personal information and use it to carry out unauthorized transactions.
Another way in which the cashless policy is being exploited is through high transaction fees. Banks and financial institutions charge high fees for electronic transactions, and this has made it difficult for small businesses and low-income earners to adopt the policy. Many Nigerians prefer to use cash to avoid the high fees charged by financial institutions.
Furthermore, there have been reports of electronic payment systems being hacked, leading to loss of funds. Hackers target weak security systems and steal people’s personal information, which they use to access their accounts and carry out unauthorized transactions.
The exploitation of the cashless policy has also led to a rise in cybercrime. Criminals use various techniques such as phishing and malware to obtain people’s personal information, which they use to carry out fraudulent transactions. Cybercrime has become a major threat to the Nigerian economy, and the government is working to improve the security of electronic payment systems.
Moreover, the cashless policy has led to an increase in financial exclusion. Many Nigerians do not have access to banking services or electronic payment systems, and they are therefore unable to participate in the cashless economy. The policy has favored the urban population, leaving out those in rural areas and low-income earners who cannot afford the high fees charged by financial institutions.
In conclusion, while the cashless policy has the potential to improve the Nigerian economy, it has also been exploited in various ways. Fraudulent transactions, high transaction fees, cybercrime, and financial exclusion are some of the challenges that need to be addressed to fully realize the benefits of the policy. The government and financial institutions need to work together to improve the security of electronic payment systems, reduce fees, and increase financial inclusion
