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How cashless economy could have contributed in curtailing spread of coronavirus

Nigeria’s cash-based economy could be a catalyst to the spread of coronavirus as more than 70 percent of the country’s population still depend on cash for their daily transactions.

Studies suggest that paper bills can contain bacteria and viruses, and can also serve as the medium of spreading diseases.

Banks in China, the birth country of the deadly coronavirus began disinfecting cash with ultraviolet or heat treatments in February to prevent the further spread of the virus.

“If your job requires that you handle money (or any other potentially contaminated surface), it’s important to be diligent about washing your hands and not touching your face, Michael Knight, assistant professor of medicine at the George Washington School of Medicine and Health Sciences said.

According to the New York Department of Health, between touching money and preparing food, it is a good idea to change disposable gloves, and wash the hand.

“Banknotes can carry Coronavirus. But do not be too alarmed: the risk is small. Unless someone is using a banknote to sneeze,” Soko Directory, a Kenyan company quoted the World Health Organisation to have said.

While digital payment adoption has seen a surge in Nigeria amid lock-down and work-from-home initiative, cash remains the king of payment and transactions in the country where almost 40 million people are unbanked.

Health experts around the world are preaching against the use of cash in this season due to its potential role of transmitting the virus.

While announcing plans to set up 50 neighbourhood food markets across Lagos State to serve as makeshift groceries for residents, Governor Babajide Sanwo-Olu said that there had been a “strange trend” recorded by the State in its response to the viral epidemic, hinting that some of the new infections showed Lagos may be entering a phase of community transmission of the disease.

Nigeria’s Minister of Health, Osagie Ehanire said recently that the number of Coronavirus contacts being chased had risen over 6,000 adding that the number of people being infected with the virus is expected to increase.

A cashless economy fueled by a high penetration rate of mobile money like in Kenya would have been a good measure of curtailing the spread of Coronavirus in Nigeria which has reported 232 confirmed cases as at Sunday,” a Lagos-based analyst said.

“Even in the absence of the pandemic, the payment system is rather notorious for experiencing issues, so these issues will still be experienced by those who decide to make payments online in the coming months,” Chuba Ezekwesili, co-founder and partner at Future Africa said.

A large number of Nigeria’s financially included population still have to visit the ATMs for cash as most of the shops, and informal markets are either underbanked or not digitally included.

“I no longer allow my customers to pay through bank transfers. It’s either the transfers do not get to my account or usually bounce back after I get alert. I am usually at a loss,” a petty trader who identified herself as Iya Beji said.

The case would have been different if Iya Beji were to be in Kenya as the informal market in some of those African countries depends largely on mobile money for financial transactions.

Meanwhile, Nigeria’s cash-based economy fueled by the country’s bank-led financial inclusion model has a huge cost implication for the central bank.

According to the most recent data by the Currency Operations Department of the CBN, the financial industry regulator spent N64.04 billion to print currency in 2018, a reflection of the high dominance of cash in the economy.

Compared to the N49.52 billion used in printing the banknotes in 2017, the apex bank spent 29.31 percent or N14.52 billion more in producing naira notes.

 

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