Dayo Babatunde is the senior partner, Ernst and Young, a global firm that has been in operation for over 50 years and is represented in more than 140 countries. With his 23 years experience in the banking industry, he is of the opinion that cashless economy will not only help Nigeria’s economy but will ease all issues in the industry.
He believes that the policy can only be effective if the Central Bank of Nigeria (CBN) and other stakeholders are determined to fortify the industry and make it workable.
The CBN just introduced the cashless policy in Nigeria, what do you think?
The introduction of the policy is economically expedient because Nigeria is not an island. This policy is practicable in other economies. In Nigeria, we are still essentially a cash economy compared with credit economy.
The policy is an avenue to develop the economy. This means those who do not know anything about banking will be brought into banking space. Over three quarter of the population in rural areas are yet to cultivate banking culture. So, if these people are brought into the banking system, it will help the monetary authorities including the Central Bank to control the growth of the economy effectively.
It is therefore advantageous to the operators (bankers), and to the consumers (business men) as the policy will reduce the cost of carrying cash drastically and will allow delivery of services in the banking industry to be cheap.
Also, the policy will reduce the branch network and incidence of armed robbery because if you don’t have money in the house, nobody will attack you. This will impact positively on security of the people because there is nothing to be afraid of.
Another advantage is the responsiveness of banking services. This means that you don’t have to waste your time in the bank waiting to withdraw money. If you know that you don’t need to go into the banking hall to transact your business, it will save time and increase productive hours of the people. The policy is like taking an individual out of the traditional banking hall in order to save one’s time. So, it has a lots of attractions.
What is the implication of an economy that is largely dependent on micro businesses?
The impact on the average Nigerian who is not educated is negative but there is no point shying away from the truth. The fact remains that there are people who are not educated in the countries where cashless economy is functioning effectively.
It is like a change in the mind of the people, which may pose a lot of burden on them especially on how to use the card. But, I believe the CBN is carrying out massive awareness campaign on the policy. Nigerians might not be comfortable with the policy at first but you will be surprised they will blend with time.
There is the challenge of infrastructure, which might hamper the efficiency of the policy. These include the epileptic power supply and non-availability of cash in the ATM machine. But, I believe that they will enjoy the policy after all.
Do you think this policy is good for Nigerians at this time, especially with the high level of corruption in the country?
We cannot fold our hands because of the risk involved in this policy. If we refuse to take on the challenges, there might be danger in the future. Nigerians must learn how to manage risks. If we are dwelling on the challenges at hand, then there might not be a right time for it.
Lack of information technology is another issue because Nigerians do not have the robust system of managing their information. Another challenge is the aged population that will be negatively affected. All these are challenges that might hinder the implementation of the policy. I wouldn’t shy away from the fact that the system needs refining, modifications, enlightenment and sensitisation of the people.
If the CBN is looking at how to raise the standard of integrity in the banking system, it must also know that it must be a step ahead of the fraudster for the policy to be effective. But, it is a pity that Nigerians cannot boost of a CBN that is ahead of fraudsters.
Another challenge is that this policy will lead to mass retrenchment in the banking industry because people will no longer need to go to the bank always. The good thing is that the impact on the growth of our economy will give a chance for other channels of employment.
