CBN must address technology fundamentals to reduce naira redesign effect – Bolaji Ojo
Bolaji Ojo, managing editor and publisher, The Ojo-Yoshida Report has advised the Central Bank of Nigeria (CBN) to implement adequate technology backbone and other fundamental measures to tackle the effect of the Naira redesign policy on Nigerians and fast track the transition to a cashless economy.
The publisher who disclosed this at the Technology Times Digital Transformation Thought Leadership Series said Nigeria needs to invest in its infrastructure to power the digital economy by ensuring stable, reliable, and affordable electricity, while telecommunication networks must also be strengthened to foster digitalization that are essential to achieving a cash-free system.
Ojo said that Nigeria’s banking industry has taken giant leaps over several developed economies.
“What I would say is that Nigeria is pioneering certain actions that other economies are going to be forced to take. So aside from the impact, so far, the negative impact on people in general, Nigeria is actually taking a leap forward ahead of some developed economies that are still primarily cash-based.
And I can list quite a few of them. In terms of developing economies globally, Nigeria is also advancing things that others are going to have to take steps towards. The cash-based economy is an anomaly today. It’s going to go away whether we like it or not,” Ojo said
According to him, Nigeria can learn from other economies that have already achieved a cash-free system, and should take advantage of the experiences of countries such as the UK and Switzerland, that have made significant progress towards a cash-free system .
He said a key question is how to implement it in such a gradual way that it doesn’t negatively impact people as it has been done.
“There are technology tools that can be used. But first, let’s start with the most basic things. You go to some economies, and you find that those economies have already achieved what Nigeria has achieved. So we asked the question what made it possible for them to do this without necessarily promulgating a decree or a force of law to say, ‘this is where we are headed,” he said
The publisher pointed out that infrastructure remains essential to a successful transition to a cash-free economy. He added that Digitalisation of the global economy is accelerating, and semiconductors are in everything. “A reliable telecommunication network and stable electricity are fundamental to everything, including the Fintech industry.”
Ojo said there is also a need to have steady power, affordable electricity, telecommunication networks for this transition into a cashfree economy, adding that most developed economies that have achieved the cashless policy have all the fundamentals in place.
He said, “when you spend about 30 minutes just trying to send messages across, or to access the app for your banking, you are not going to be able to have what we are desirous of if we don’t solve that problem.”
The publisher said the race to achieve a cashless economy goes beyond the Central Bank and cuts across the economy which involves government at all levels, including private-public partnership.
Ojo, who is also a member of Swiss Fintech, an industry that supports and promotes the growth of the fintech sector in Switzerland added that compared to the Swiss and other developed economies including the U.K. and U.S., Nigeria has leapfrogged the old technology of banking.
However, he advised the CBN to review its position on Nigeria’s unbanked population
“When we are talking with regard to the unbanked, there are no unbanked people in Nigeria. There are only people that do not fit into our traditional view of what banking is supposed to be. There are no unbanked people. They bank the way they want, and the best service is for you to service people the way they want to be serviced, not the way you think you should service them.”
He explains that the cashless society is accepted and should not be enforced or sold.
According to him, “We already want to because it solves so many problems for us. I can take my phone and slap it against your phone, and the money that I need is immediately transferred.”
For the apex bank, he said there is need to focus on long term objectives like the financial tools that will help which Nigerians are ready for and not about political objectives.