The caveat must be clearly given to the effect that this commentator is not anti-cashless policy. It is a step in the right direction. The difference between developed, developing and regressive economies are marked by such denominators. Such cultural nuances of ‘spraying’ money at parties, and even churches would respond to the policy in innovative ways, or remain the few examples where cash would remain resistant. Some sharp people have already responded by printing paper for people to spray with after they must have made transfers to the beneficiary. I have consistently noted, in this space, that Nigerians should remember former Emir of Kano, Lamido Sanusi, fondly for fundamental changes in the monetary policy. He took over from Chukwuma Soludo in 2009. Soludo did well in consolidating the banks such that they became recapitalised and thus able to provide internal funding at some level for internal development. They were in a position to provide the internal debt component of Nigeria’s N31 trillion debt profile. Had the banks not been consolidated and recapitalised, they would not have been in the picture. When Sanusi came on board, he drove the system faster and moved the nation into the world space by making electronic banking move from dream world to reality. The current Central Bank governor, Godwin Emefiele, has done his best to take banking and monetary policies notches higher. Currency redesign is said to be a five yearly ritual, but the last redesign was in 2014 when the N100 naira was redesigned to commemorate Nigeria’s centenary.
Since the British pound ceased to be the means of exchange in 1973, the naira note came into existence, with one naira note, which became the equivalent of ten shillings. On 11th of February 11, 1977, a new bank note, with the value of N20 was issued. It became the highest denomination, and the first currency to bear the face of a Nigerian, General Murtala Muhammed, who was assassinated the previous year. He was loved by the people for his revolutionary leadership as Head of State. On July 2, 1979, three bank notes of three denominations, namely N1, N5, and N10 were introduced.
In April 1984, the colours of bank notes were changed, a move said to be aimed at checking currency trafficking, which was prevalent at that time. In response to apparent expansion in economic activities, the N100, N200, N500, and N1,000 bank notes were introduced in 1999, 2000, 2001 and 2005, respectively. Effectively, there has been no redesign for a long time. The current Central Bank governor chose to take the bull by the horns. He gave three months’ notice but it would seem some politicians whose strategy for elections tilt high on vote-buying, have begun to feel threatened.
Three months after Emefiele gave notice of the redesign, he has turned his word to action. Some governors who had turned a blind eye to persistent fuel scarcity and its attendant harsh effects, went to the Supreme Court to seek an extension or whatever. I have not followed the matter since I find it hypocritical, which is why the back-and-forth of the matter has failed to attract attention. The project has, expectedly, caused cash crunch, given that the new notes have not made the rounds in banks and cities, further driving home the cashless policy as the way to go. It would seem the banks and the Central Bank of Nigeria did not know the enormity of what they had undertaken. On the rather generous assumption that 70 percent of the banked populace are Internet-savvy and would thus do money transfers where necessary, technology to drive the process seems to have been stretched beyond limits. Technological capacity hardly seems to support the operation of banks, given that transfers do not get to their destination even as people receive debit alerts. The tendency is for some service providers to insist on being paid in cash, a situation that has put citizens through untold hardship. Networks now have such high traffic that they are overwhelmed.
Financial institutions ought to now pay greater attention to their technological infrastructure to drive the cashless policy. The policy is a step in the right direction but technology could turn it into ashes in the mouth. The banks seem overwhelmed, in contrast to some of online platforms who have no physical offices. They seem better prepared than big banks that appear to have been caught unawares by the policy, even after three months’ notice. Under President Muhammadu Buhari’s watch as military Head of State, the nation passed this same route, and the notice was seven or 14 days, and it is doubtful this this level of hardship was prevalent, even in the face of entire cash transactions in that era, and near zero application of technology in banking operations. Now banks are lining their vaults with charges on transfers, yet the people seem not to get the service rendered without hitches. Customers pay for every transfer, which is why some of the branchless banks operating on the Internet and have zero charges for transfers seem to be better positioned for the policy.
The young tech experts in the banking halls have this opportunity to prove their worth. I do not know the impediments but I know they are not insurmountable. Given that attention is on the banking industry, it should clear every doubt, and the helmsmen should make the right investments in technology.
Many years ago, Tony Elumelu and his young colleagues in Standard Trust Bank of yesteryear were miles ahead of their contemporaries when that bank became the pioneer of branchless banking. It deployed the right technology and got its customers to withdraw funds from any of their branches, long before other banks toed the same line. The bank was handsomely rewarded for the innovation, thus mustered enough capital to take over United Bank for Africa. The cashless policy now presents opportunity for banks to be innovative.
Meanwhile, the security agencies should do well to make scapegoats of bankers now allegedly hording the new currency or big politicians who allegedly mop up cash, perhaps to deploy same for vote-buying.