Most Nigerians can play ducks and drakes with anything but money. Once it comes to issues that pertain to money, ears kiss the ground and the mind wakens, eyes widen and eyebrows are pushed up. So it is little wonder the uproar of mixed feelings that greeted the recent introduction of the cashless policy by the Central Bank of Nigeria.
One would not be wrong in asking what cashless policy is all about. The simple explanation that can be given is that cashless policy is a policy established by the Central Bank of Nigeria, with the sole aim of handling the use of cash in the Nigerian federation.
The cashless policy was actually introduced in the year 2012 by the Central Bank of Nigeria. It prescribed a cash handling charges of 3% and 5% on daily withdrawal above five hundred thousand nairas (500, 000) for individuals and three million nairas (3,000,000) for corporate bodies respectively, while deposits above 500,000 attract 2% for an individual and 3% for corporate bodies. The policy was enforced not to eliminate the use of cash but to reduce the volume of cash in circulation.
A pilot run of the policy started on 1st January 2012 in Lagos State. The service charges were withheld until 30 March of the same year to allow for seamless migration from manual to electronic devices.
The second stage of the pilot run started in Rivers, Anambra, Abia, Kano, Ogun and the federal capital territory on 1st July 2013, while the program nationwide started a year later on 31st July 2014. As at the moment, the new cashless policy already took effect in the aforementioned states since September 18, 2019.
The nationwide implementation of the policy is scheduled to take effect as from March 31, 2020. The CBN cashless policy is said to be strictly applicable to cash-based transactions and not on electronic banking.
One cannot but see the essential benefit of the cashless policy; it is indeed a good initiative. At least it will aid in the authentication and formalization of transactions that are done. This helps to curb corruption and the flow of black money which results in an increase in economic growth. The expenditure incurred in printing and transportation of currency notes is equally curbed.
However, one major disadvantage of the cashless policy in Nigeria is that, in a big country where many sections of the society in rural areas are illiterates and poor, and thus not everybody has the knowledge of doing digital transactions, hence its reach is limited to urban and semi-urban areas.
Another disadvantage is that one cannot deny the risk involved in digital transactions, in this season of cybercrime and fraud. Thus there’s a high risk of people’s accounts being hacked and losing their money to an online scam.
Though this policy will go a long way in limiting the unnecessary circulation of physical cash and encourage useful spending. However, the risks involved in digital transactions is not something to be swept under the carpet either; else it does more harm than good.