Joe Dada, a Nigerian author and management professional, shared insights on transitioning Nigeria’s economy from cash-dominated to cashless in his new book titled ‘Cashless Economy: Evolution and Execution.’
The cashless policy was introduced by the Central Bank of Nigeria in January 2012, initially implemented in select states and later nationwide in July 2014. The policy aimed to address concerns regarding the high percentage of currency in circulation outside the banking system, which contributed to inflation, corruption, and kidnapping.
To combat these issues, the Central Bank targeted reducing the currency in circulation, resulting in a decrease from N3.1 trillion in December 2022 to N982 billion in February 2023. However, critics argue that the policy has proven ineffective as there is no excess liquidity in the system, leading to frustrations among businesses and households trying to access their cash for daily transactions.
As of February 2023, out of the total cash in circulation, N843 billion (85.8 percent) remained outside the banking system, representing a significant decrease of 68.3 percent over the period.
Dada’s book, reviewed and launched recently in Lagos, highlights that Nigeria is not the first country to transition to a cashless economy, citing successful examples from countries like Kenya, Sweden, and others.
Dada, who is also a council member of the board of the Nigeria British Chambers of Commerce, said that the book, ‘Cashless Economy: Evolution and Execution in Nigeria,’ explores the experiences of both developing and advanced economies, such as Kenya, Zimbabwe, India, Sweden, and Norway, to analyse the challenges and benefits of a demonetised economy in a rapidly evolving world.
“The Central Bank of Nigeria (CBN) introduced the ‘Cashless Policy’ in 2012 with the aim of reducing cash transactions and promoting innovation in mobile and digital payments, the author said. “Despite its phased implementation that began over a decade ago, this policy has recently sparked significant contention and controversy. It is worth noting that the cashless concept has implications for every sector of an economy’s business and payment system. However, empirical evidence has highlighted the importance of a well-structured execution roadmap for the successful deployment and adoption of cashless initiatives.
“In order for Nigeria to maintain its position as Africa’s largest economy, it is crucial to address the challenges associated with implementing the Cashless Policy outlined in this book. These challenges should be balanced with the advantages that come with establishing and maintaining a strong and efficient payment system. Such a system is essential for expediting economic growth and development in the 21st century,” he said.
According to Ayoze Baje, president of The Guild of Public Affairs Analysts of Nigeria (GPAAN), also the reviewer, the book is presented in a simple, easy-to-read format, with each chapter ending in “Issues for Discussion” and “Discourse,” summarising each chapters. He also commended the book for its comprehensive perspective and its relevance not only to Nigeria but also to developing countries worldwide.
“Beyond its timeliness, the author has done brilliant, insightful work by having a holistic perspective of the subject matter. It is broad-based such that though Nigeria is its main concern, the world, especially developing countries stand to gain and immensely so from its rich contents,” Baje said.
Speaking further, the GPAAN president noted he book provides a thorough examination of the obstacles faced by the cashless economy, including cybercrime, corporate governance, poverty, illiteracy, financial inclusion, insecurity, and the persistent issue of increasing debt. Moreover, the book offers solutions to address and alleviate these challenges.
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“Going through this page-turning book, one gets more informed about the good aspects of the cashless economy. These include promoting the use of electronic currency to reduce dependence on cash transactions, replaced by electronic means of financial transactions,” he said.
“Unfortunately, the CBN’s currency swap policy was mired in controversies, bringing undue pain on the hapless Nigerians. As the author rightly puts it on page 181 it was shrouded in political and economic underpinnings. In fact, issues such as ‘lack of sincerity and direction’ emerged such that despite the government’s response the cash crunch persisted,” Baje said.
Baje continued. “The onus therefore, lies on our CBN to similarly deploy it to track corruption, plug leakages in the financial system and tackle money laundering.”
In addition to that, Oyoze, who is also a food scientist recommended the book not only for students of economy and every stakeholder in the financial transaction sector but every literate citizen, here in Nigeria and the world at large.
“We should not only ingest and digest but fully assimilate the juicy ingredients, so well prepared by the erudite scholar/author to oil and drive the engine of financial transactions forward,” he said.