In the past month, there has been a nationwide hunt for cash as Nigeria tries to transform into a cashless economy by making all financial transactions digital.
On December 6, 2022, the Central Bank of Nigeria (CBN) announced that there would be new withdrawal limits for individuals, businesses, and organizations to mitigate money laundering and other financial crimes.
According to reports from the Nigerian Financial Intelligence Unit (NFIU), within the years 2015–2022, all arms of government have withdrawn over 1 trillion Naira in cash, and these acts directly counter the prohibition of money laundering since most cash transactions cannot be traced, hence supporting the adoption of a cashless economy.
Although a cashless economy has been advised as one of the key adjustments that Nigeria needs to make in order to fight corruption, the masses might not find it convenient, as alternatives seem not to work well in the life of an average Nigerian.
Many people have been forced to camp out at bank ATMs for days to get the cash they can use to purchase basic amenities or the ones they need to run their businesses. The only alternative to getting cash is from POS operators, where individuals are forced to pay 10% or more of the amount they are withdrawing.
The cashless policy in Nigeria was introduced in 2012 in Lagos State and has slowly but surely been adopted by other states. Activities such as mobile banking and POS transactions have been used across multiple businesses as they promote a faster and safer way to conduct financial transactions.
We know a cashless economy is possible, but does Nigeria have the needed infrastructure? Many mobile transactions seem to fail because of network instability, making it frustrating to make payments. There are also growing cases of fraudulent activities where individuals are being ripped off of their finances with just a click, making it hard to trust these processes completely.
Also, not to forget individuals that live in rural areas with poor cellular networks and infrastructure, how will they adopt a cashless means of transaction?
As a Nigerian watching all this unfold, do you think the nation is ready for a cashless economy, or should there be an improvement in financial infrastructure before that happens?
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