CHUKWUEMEKA FRED AGBATA JNR. (CFA)
Technology is not a fix-all thing, I must admit. However, I am extremely convinced that countries such as Nigeria battling the monster known as corruption needs technology in many ways. In the case of Nigeria, I can say for certain that the implementation of a number of technology-driven policies such as Bank Verification Number, Treasury Single Account, Integrated Personal Payroll Information System and similar policies have proved that technology presents a more proactive way of fighting corruption.
So, I belong to the school of thought that believes that Nigeria is better off running as a (near) cashless society. We must drive policies that make cash expensive to carry, which I admit may not be the best but it’s the way to go if we must fight corruption properly. Think about it, if you need to provide an account for me to pay a bribe, then it becomes easier to prove an accusation but with the current trend of Ghana-must-go bags, we are not winning the war.
In Nigeria’s journey towards attaining the status of a developed country, there were many attempts, since 2012, by the Central Bank of Nigeria, to introduce the cashless policy into the polity. This was started as a pilot project in Nigeria’s centre of excellence, Lagos State, in 2012. By July 2014, the scheme was rolled to other parts of the country. However, only few Nigerians have keyed into the cashless policy.
No doubt the adoption of the cashless policy, promises benefits, such as effectiveness in monetary policy to manage inflation; driving economic growth; seeing to a decrease in the rate of corruption and leakage, especially in the public sector, money laundering and all other fraudulent activities relating to cash.
A couple of weeks ago, the CBN issued a directive for an increase in the charges on stamp duty payment for individual transactions, via point of sale! This, came a few weeks after the apex bank gave a directive to banks to effect charges on daily deposits of cash in excess of N500,000 for individuals and N3,000,000 for corporate bank accounts.
With all the benefits of the cashless policy, as laid out above, the introduction of the N50 stamp duty for successful PoS transactions, with value starting from N1,000, is nothing but a killer.
Here’s a true life story of what happened to me. I had just returned from a foreign trip and did not realise that the policy was already being enforced by various retailers. I went to the bakery to buy three loaves of bread at N400 each. I brought out my card to pay and the cashier informed me that there would be an extra charge of N50 because of the new policy. I refused to pay via PoS and instead paid cash. Now, I always pay by card, even when buying a loaf of bread but not anymore as I always go around with cash these days.
The big question is, how did the CBN arrive at such a policy? Is our state of being today all about government revenue? This is unbelievable! I remember posting my experience on a tech-based chat group and out came tons of similar experiences from people who ordinarily will pay using cards but now carry cash especially when buying fuel.
What does this mean? This, in essence, means that, the ground, that we have covered in the drive towards getting the citizens to embrace the cashless policy may be reversed and it appears that like we are now on the descent, taking huge steps backwards, thus, defeating the whole essence of what the government, through the CBN, set out to achieve through the introduction of the cashless policy.
Let’s not forget that there is the challenge of certain individuals who do not believe in keeping their funds in banks. They are not at home with the N50 bank charge on any transaction of N1,000 and above being imposed on PoS transactions. They will rather transact their business using cash.
If people living rather comfortably in the urban centres have opted for physical cash transactions, at any point of payment, through PoS, due to a N50 charge, then, where lies the fate of the unbanked population, who would not be willing to embrace anything cashless but go by their old method of cash transactions.
Yes, the Federal Government is seeking other ways of getting more revenue to add to the dwindling revenue from the sale of crude oil, as well as servicing debts, but then, this must not be made at the expense of the cashless policy, which promises to improve the various sectors of the Nigerian economy, through the deployment of technology.
There already lies a burden on the part of an average bank user, who has been dealing with paying a current account maintenance fee of N1 per N1,000 and a N65 charge for utilising other banks’ ATM machines to make withdrawals, from the fourth of such withdrawals in a month as well as card maintenance fees.
I believe that this is enough burden on the bank users already. To now add a N50 stamp duty on the PoS transactions, starting from N1,000 purchases, is like driving a nail in the coffin of the cashless policy in Nigeria. The way I see it is that the use of the PoS to transact business should encourage people to carry less cash with them, in line with the cashless policy objective.
Placing any charge on the use has started to discourage buyers, who bear the burden of paying the PoS charge after paying for the value of their goods and services.
The government, should not in one breath be advocating a cashless policy that aims at decreasing the volume of physical cash in the economy, and at the same time discouraging the use of the PoS, which is an electronic form of transaction that is not cash-based.
The government should, therefore, look elsewhere to generate more revenue to fund the national budget and put a permanent hold on charges on the PoS transactions to encourage its use for faster adoption of the cashless policy and the desired financial inclusion of Nigerian citizens. https://punchng.com/retrogressive-policies-hurting-cashless-system/
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