News October 12, 2011 at 12:00 am

Nigeria Moves Towards Being a Cashless Society

Adanna Uwazurike October 12, 2011 at 12:00 am

October 12, 2011 at 12:00 am | News

Like many emerging nations across the world who depend mainly on cash as a principle way to exchange money, Nigeria is now trying to move away from this.  Recently, the Central Bank of Nigeria announced that if Nigeria did not move to being a cashless society it would cost the nation N192 billion a year.

Due to this the Deputy Director Albert Ikmseedun said it was “high time” Nigerians embraced a cashless society due to the high cost of this current financial system. However, his plan does not necessarily mean that he wants to end a society of cash altogether, but instead decrease the volume. He stated, "If there is reduced cash in the system, banks would be able to compete favorably. There are so many alternative payment systems in Nigeria which are even more convenient and safe, but people are not using them."

Nigerians in support of this idea have been urging the Central Bank of Nigeria to educate their citizens on what exactly a cashless society entails. A merchant Uzor Orji who trades in electronics in the Federal Capital Territory, FCT says that he does not know what the term, 'cashless society' means. But he is very much aware of the fact that soon he would not be able to withdraw any amount from his account in First Bank, which exceeds N150, 000.

Many say that the current policy is an attempt to reduce the massive volume of cash-in transactions, which according to many analysts, has negative effects on the Nigerian economy, particularly concerning the cost of cash management to the banking industry, security, and money laundering.

The Central Bank of Nigeria  has directed all commercial banks, savings and loans institutions, mortgage and microfinance banks in the country, to ensure that, “effective June 1, 2012, daily cumulative free cash withdrawals and lodgments by individual and corporate customers do not exceed a maximum ceiling of N150,000 and N1 million respectively.”

This belief that Nigeria should move to a cashless society is not just that of the nation. Many Europeans have been dealing with the issue of whether or not to move towards this direction. Perhaps the move to a cashless society will be the best for that nation seeing as that because of the monetary and conversion system there people carry big bills around at all times. However, only time will tell whether or not this idea will catch on and become widespread.

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