Cashless economy: Expert identifies policy, infrastructure as critical challenges

A financial expert, Mr Fasasi Atanda, has identified policy somersault and inadequate internet infrastructure as parts of impediments in the full realisation of a cashless economy in Nigeria.

Atanda, the National President, Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), in an exclusive interview with our reporter said that the country’s internet penetration stood at 50 per cent.

It was reported that the Central Bank of Nigeria (CBN) initiated the cashless policy to reduce high volume of cash in circulation.

The implementation of this policy, which aims to enhance the efficiency of financial transactions and curb illicit financial activities, has highlighted significant infrastructural and logistical gaps.

“One of the most pressing issues is Nigeria’s internet penetration rate, which stands at approximately 50 per cent.

“This means that half of the country’s landmass lacks reliable internet connectivity, a critical requirement for a cashless economy.

“The policy’s reliance on digital transactions has been problematic for rural and remote areas where internet access is limited or non-existent.

“Without the necessary infrastructure, many Nigerians have struggled to adapt to the cashless policy, leading to widespread frustration and economic disruption,” he said.

According to Atanda, the cashless policy roll-out coincided with the COVID-19 pandemic, thus exacerbating existing challenges.

He said as traditional banks limited their operations to curb the spread of the virus, the demand for digital financial services surged.

He added that existing internet infrastructure, however, could not support the increased volume of transactions, resulting in frequent transaction failures and significant delays.

The AMMBAN president underscored the critical need for substantial investments in internet infrastructure to support a fully cashless economy.

Atanda said the policy’s enforcement to deposit all cash into bank accounts and rely solely on digital transactions, faced criticism for overlooking the realities of Nigeria’s socio-economic landscape.

According to him, many small businesses and individuals in rural areas rely on cash transactions for their daily activities.

He said the policy did not account for these ground realities, leading to unintended economic hardships for those who were unable to access digital financial services.

Atanda, however, recognised the progress being made due to the emergence of a new leadership at the CBN, which led to a relaxation of some of the more stringent aspects of the cashless policy.

“This has provided much-needed relief to many Nigerians, allowing for a more gradual transition towards digital transactions.

“Moving forward, it is crucial for policymakers to balance the push for a cashless economy with the need to address infrastructural gaps and socio-economic disparities.

“Only through a comprehensive and inclusive approach can Nigeria successfully transit to a cashless economy that benefits all its citizens,” he said.