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Against the backdrop of the Central Bank of Nigeria’s directive for immediate implementation of a cashless policy, the Nigeria Employers’ Consultative Association (NECA), has warned that the nation’s business environment was not yet conducive for the programme.
Mr. Timothy Olawale, director-general of NECA, stated that, although the initiative was laudable in a bid to put the economy at par with other emerging economies, the business environment and available infrastructures were not ready for such deployment.
The NECA boss noted that several sub-sectors of the economy would be negatively affected by the policy, as they were still predominantly cash-dominated.
He gave the example of fast moving consumer goods and retailers, downstream oil and gas, and the transportation sectors, among others.
He explained that “while corporate account holders are still battling with stamp duty charge of N50 on every eligible transaction above N1,000, commission on turnover (COT) of 0.1%, the about to come on stream 7.2% VAT, etc, with the additional 5% as processing fee for withdrawals and 3% as processing fee for lodgments of any amount above N3 million, it is needless to say that the policy is an overkill, exploitative and would negatively impact the citizens.”
Olawale noted that Nigeria’s Ease of Doing Business Report (2019) rating of 146th out of 190 economies, and other uncoordinated and unplanned policies would further bring hardship on the people and lead to further contraction of the economy.
He called for an exemption for the sub-sectors aforementioned, if CBN would still go ahead with its policy.
Olawale also stated that CBN should ensure that all deposit money banks improve their facilities as against inefficiency in their payment platforms and reduce fraud.
He reiterated the need for wide consultation and stakeholder engagement on an ongoing basis before policy statements are made or concluded.
