Nigeria 2023: Nigerians, Mercilessly Beaten by Cashless Policy

 Nigeria 2023: Nigerians, Mercilessly Beaten by Cashless Policy

By

Prof. MK Othman

In the last two weeks or so, millions of Nigerians were living in a hopeless situation of economic desperation, misery, hunger and desolation. This type of situation was never experienced within the last three decades. Marriages and other social festivities were hurriedly canceled or postponed ad-infinitum. No one has an idea about when the situation will improve. Although the presidential election is very close, the people are not as enthusiastic. I met a top-ranking professor, whose single statement, in a seminar can mar or make an academic the quality of the presentation, in a queue at a filling station with a “black-market” price of N345 per liter, bowing to a fuel attendant; he wanted to transfer N5,100 for a fuel of N3,000 and then be given cash of N2,000. The attendant gave only N1,000 on a take-it-or-leave-it basis. Reluctantly, the professor agreed because he had no option.  Yet the POS machine, “Moneypoint”, presented “a decline” transaction and the professor left highly disappointed without cash or fuel. When it was my turn, I also experienced the same “decline” transaction and left without fuel.

The POS “Moneypoint” belonging to a Microfinance Bank is the only reliable POS machine in Nigeria, all others can deduct your money without remitting especially the POS machines of the so-called big banks; First Bank, Zenith, UBA, etc. and customers have nowhere to turn to after the disappointments. Today, some lucky Nigerians, like me, have money in our accounts, legitimately earned but could not expend them for products and services.  Thanks to the cashless economic policy of the Central Bank of Nigeria (CBN). The CBN policy is being implemented by fiat without due consideration to prerequisites for its success. How can we implement a cashless policy with epileptic Internet Services, poor GSM services, and grossly dilapidated electric power infrastructure? How can we implement a cashless policy when the total number of registered Bank Verification Numbers (BVNs) in the country as of December 2022 was 56.5 million? Even this was considered a significant increase compared to 51.7 million registered BVNs as of December 2021 according to the Nigeria Inter-Bank Settlement System (NIBSS).

This means that less than 25% of Nigerians own Bank accounts. There are several Headquarters of Local Government Areas without banks, micro or commercial. I wonder why all the economic experts in Nigeria remained silent when the CBN Governor announced the intention of the Bank to implement a 100% cashless policy without the necessary structure in place. What is the implication of this policy?

As discussed in this column, two weeks ago, a cashless policy is a policy that discourages the use of raw cash for transactions but encourages (not imposes) the use of bank transfers, ATM cards, POS, and other financial instruments for transferring cash in transactions. The policy aims to reduce some of the negative consequences associated with the usage of physical cash in the economy:  the costs of cash volume handling, robberies, payments of ransom, loss of physical cash during fire and flooding incidents, and other cash-related crimes,

In my article of 8th October 2023, titled “Outrageous Cost of Cashless Policy in Nigeria”, I called on the government to urgently address this crisis before it degenerates and blossoms beyond control. My call, similar to calls by several well-meaning Nigerians was ignored thereby making the country face a gargantuan socio-economic crisis, which may snowball into a self-inflicted economic mess.  Already, riots have broken out in some major cities of Warri, Benin, and Ibadan over  Naira Scarcity. On Thursday, 16th February 2023, President Muhammadu Buhari approved the continued use of the old  N200 notes alongside the new notes until 10th April 2003. The president’s approval for the continuous use of N200 should have been extended to all the old currencies to respect the Supreme Court’s February 8th interim injunction. The injunction restrained the Federal Government and its agencies from enforcing the February 10th deadline for the use of old N200, N500, and N1000 naira notes... The call for the CBN to stay action on the cashless policy was also made by the Speaker of the National Assembly, Femi Gbajabiamila in a statement “It is disheartening that the CBN has resolutely refused to admit error and change course in the face of mounting evidence that the implementation of this policy has been a devastating failure. It is deeply troubling that neither the intervention of the National Council of State nor an order of the Supreme Court is sufficient to cause the Governor of the CBN to review the decisions that have brought us to this entirely avoidable moment”.

The avoidable costs of the cashless policy on the hapless Nigerians are currently unquantifiable but may far outweigh the advantages of the policy because of poor infrastructure, poor preparation, and pandemic corruption in the polity. One pathetic case was the loss of a pregnant woman and her baby due to the cashless policy. The woman, Shema’u Labaran was in labor and was brought to Abdullahi Wase Specialist Hospital Kano. Her husband, Mallam Bello Fancy who recounted the events leading to his wife's death on Freedom Radio, said “she was taken to the hospital for medical attention after being in labor but the hospital rejected the old Naira notes and a bank transfer was made with debit alert shown but the doctors insisted on receiving the credit alert from their account before taking any action. The alert came three hours too late”. At the time, the credit alert was received, unfortunately, both the lady and the baby were lost. https://forefrontng.com/new-notes-crisis-claims-pregnant-womans-life-in-kano-hospital/ what a merciless society!

The hardest hit of the heartless cashless policy are the people down the ladder whom we daily give alms and tips from N50 to N1,000, these are the physical challenges people, beggars, the elderlies, and those who live from hand to mouth. How are they surviving today?

CBN's implementation of a pain-inflicted cashless policy at this critical time of election is disenfranchising Nigerians from discharging their civic responsibilities of electing their desired candidates. How many Nigerians can go to poll penniless with empty stomachs? Can the policy stop vote-buying when the votes buyers are the owners of the commercial banks, the only avenue for accessing the new currencies? This is the most laughable, astonishing argument when the politicians have 1,000 and one ways of circumventing measures against vote-buying. The current, military-poorly conscripted Nigerian constitution had long ago short-changed Nigerians from making the best among them occupying political leadership. It has turned Nigerian politics into a “business venture” of sorts in which only candidates backed by many bags make it to victory. Check your record!

 

For the umpteenth time, there are several examples of countries that adopted a cashless economy as well as redesigned their currencies. We should not reinvent the wheel, we simply study other systems, identify all the factors for or against, modify, customize, and adopt at a small scale before upscaling. Recently, the Bank of England redesigned its notes and coins to replace the ones bearing the bust of the late Queen Elizabeth II with that of the new King, Charles III. Both the old and the new notes and coins are being accepted as legal tenders until the old ones enter permanent oblivion. There is no deadline for the collection of old Pounds. Why is the Nigerian case different? Let CBN relax this policy and allow new and old notes to be used as legal tender while making a strenuous effort to put in place the needed infrastructure for seamless cashless policy implementation.  Let us stop the merciless hardship being experienced by hapless Nigerians.