By Zainab Yaro Danladi  

Akin to the better-imagined months before the 2023 general elections when the Nigeria society was hit by scarcity of cash, the cash crunch that characterised and indeed marred the Yuletide further reminded us that Nigeria is still in dire need of an efficient economic team. Following the scarcity of cash, many folks who had marshalled out plans on how they wanted to spend their hard-earned money, were shattered. 

Initially when the alarm was raised late November, the Central Bank as usual, denied any such probability, assuring it had enough cash in its vaults and in various commercial banks. It simply dismissed it as fake news but the reality dawned on us when banks, like emperors, began to decide on how much cash a customer could access. The situation became so miserable at the eve of Christmas when some banks refused to give above N5000 to their customers.

Genesis of our problem:

Nigeria, a bustling African nation, has been grappling with a pervasive issue that has triggered a seismic rumble in its economic landscape: the transition towards a cashless society. While this movement toward digital transactions holds promise for efficiency and modernization, it comes with a set of challenges, impacting individuals, businesses, and the broader economy. The policy in itself is not bad but the implementation appears faulty.

Some of the many challenges bedeviling the policy include:

Accessibility woes:

In a country where a significant portion of the population resides in rural areas, access to digital infrastructure remains a stumbling block. The lack of reliable internet connectivity and limited banking services in these regions impede the smooth transition to cashless transaction 

Trust deficit:

Many Nigerians still harbor apprehensions regarding digital transactions due to concerns about cyber-security threats, fraud, and data breaches. This reluctance further hampers the adoption of cashless systems, fostering a persistent reliance on physical cash.

Exclusion of marginalized groups:

The push towards cashlessness risks marginalising segments of society that lack access to technology or possess limited financial literacy. This exclusion perpetuates financial inequality, hindering the goal of inclusive economic growth.

Impact and implications: 

The coexistence of cash and digital transactions creates a dual financial ecosystem, leading to inefficiencies and complications for businesses. Merchants often face challenges reconciling cash and digital payments, resulting in accounting complexities and potential losses.

 Security concerns:

The prevalence of cash transactions opens the floodgates for security risks, including theft, counterfeiting, and illicit financial activities. However, the rapid transition to digital transactions raises cyber-security concerns, necessitating robust infrastructure to safeguard against online threats.

 Financial inclusion dilemma:

Despite efforts to promote financial inclusion through digital means, a significant portion of the population, especially in rural areas and among the economically disadvantaged, remains excluded. This exclusion perpetuates a cycle of poverty and limits opportunities for socio-economic advancement.

Charting a path forward

Investment in robust digital infrastructure, including improved internet connectivity and expanded banking services in rural areas, stands as a foundational step toward achieving a truly cashless economy. This facilitates greater access and engenders trust in digital financial systems.

Education and awareness:

Empowering citizens with financial literacy programmes and awareness campaigns about the benefits and safety measures associated with digital transactions is crucial. Bridging the knowledge gap can bolster confidence and drive widespread adoption of cashless systems.

Policy reforms:

Government policies should focus on creating an enabling environment for cashless transactions, incentivizing businesses and individuals to embrace digital payments while ensuring regulations safeguard against potential risks.

Conclusion: 

Navigating the cashless conundrum requires adequate planning and massive sensitisation on the gains of the policy for the citizens to easily key into the policy. Government should not only ensure that the needed digital infrastructure is put in place but deliberately carry along the necessary stakeholders in the project.

The journey towards a cashless Nigeria presents a formidable yet promising transformation. Mitigating the challenges requires a concerted effort from all stakeholders-government, financial institutions, businesses, and citizens alike. Striking a balance between promoting digital innovation and ensuring inclusivity is paramount to harnessing the full potential of a cashless economy in Nigeria.

As the nation steers toward this digital evolution, a harmonious blend of technological advancement, education, and policy reforms will serve as the compass guiding Nigeria’s path to a robust, inclusive, and secure cashless future.

•Yaro Danladi, a mass communication student, wrote from Veritas University, Abuja.