Evaluating the Systemic Transition to a Cashless Economy in Nigeria

Abstract

The drive towards cashless societies has been a topic of continuous debate in recent times in the global financial economy. Cash as a means of movement of money for business transactional settlement in the world economy, can no longer meet the growing demands of both local and international financial markets intermediation and commercial settlement activities anymore. Though cashless societies may not have gained appropriate recognition and application among most developing and under developed countries of the world, meanwhile, its practices have gained significant relevance that can be seen and appreciated in practice in some advanced countries of the global economy today. This article rightly stipulates that, a cashless society illustrates a gradual movement of the entire payment system of an economy from the use of physical cash for all levels of personal, corporate, governmental including local and international commercial settlement activities to a systemic adoption of other non- physical cash mode payment in settlements of all types of transaction both in the public and private sectors of an economy. Discussion in respect of the history of cashless society Nigeria project, enunciated by the CBN governor in 2010 were outlined and elaborated; buttressing on the basic provision of the central bank’s policy in respect of the project. The article also discussed extensively the perceived motives, expectations and the modus operandi, including the hidden agenda of the central bank for the cashless policy; The implication of the cashless policy on banks cash movement operations; calculating limits, and care freely dictating the globally unprecedented penalties and multiple hidden agenda Nigerians are billed to suffer for depositing or withdrawing their money beyond a Central Bank of Nigeria’s set limit,(Courtesy of Mr.Sanusi, the CBN governor) and expected short term benefits of the cashless society. According to Financial analysts and other critics across the world, the cost of producing and managing cash money in most countries have reached and sometimes gone beyond 0.5% of the entire Gross Domestic Product (GDP). They have also argued that money itself has no value as it is just a printed paper, by the authority of government empowering the Central Bank, what is of value is the confidence placed in money which gives it the ability to command acceptability in settlement of transactions. However, as much as there is the need to change into a society where cash will no longer be dominant in the payment system, proponents of cash money have on the other hand claim that in the developing and the underdeveloped nations physical cash money is still the most convenient means of settlement of transactions as a result of illiteracy, and Nigeria is very guilty in this regard. The article examined critically, the workability of the cashless society in some countries of the world and particularly in Nigeria, specifically identifying reasons why Nigeria and its financial system are ill-equipped and therefore not ready or capable to implement the cashless society project for now. Although, quite a number of countries have introduced the new identity and placement of microchip in human hand under the guise of security for cashless society and the hidden biometric identification features in I.D cards under the guise of cashless policies Some of this security measures are hidden agenda by governments to invade the privacy of the citizenry taking undue advantage of the secret information obtained via the avenue of properly coded identification for cashless society project. It is hoped that this strategies will bring about the change that is needed in the transformation and revolution against cash money. Despite the fact that money eliminated the challenges faced during the barter system. The trend in economic development has surpassed those solutions that money provided in the days of barter, therefore posing needs for more efficient means of both local and international payment settlements.