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‘How Nigeria can fast track move from cash, manual economy’

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Cash processing

Some stakeholders in the financial technology sector have highlighted leeway that will enable the sustainable transition of Nigeria’s economy from cash-based and manual activities to a digital economy.

While the country had in place a cashless policy anchored by the Central Bank of Nigeria (CBN), the Federal Government had declared as a priority a move to the digital economy, as the Ministry of Communication has already been tweaked to focus more on communication and digital economy, while new National Broadband Plan which is expected to accelerate the initiative has been launched.

The World Bank in its situation report on Nigeria’s digital economy, published recently, noted that while Digital Economy offers opportunities for countries like Nigeria, improved digital connectivity could only achieve the desired transformational impact on economic opportunity and inclusive growth if combined with improvements in digital skills and literacy.

The global bank had added that coverage of digital identity schemes, and access to digital payments and other financial services, as well as digital support to start-ups and existing businesses, were necessary for the success of the plan.

While the CBN stakes as much as N64billion annually to print notes,  Group Chief Executive Officer of a Nigerian UK and US-based firm, Tingo International Holdings Inc., Dozy Mmobuosi, insisted that vastly improving the infrastructure to support digital transition, digital connectivity, as well as reliability and reach, were critical to achieving government’s efforts.

According to him, Nigeria can have a digital or cashless economy with prioritising investment in technology, adding: “this is something we understand intimately at Tingo.”

A major concern for Mmobuosi is the challenges the country could have in the rural area, where the larger population (about 70 cent) currently resides.

Mmobuosi stressed the need for technology to foster financial inclusion, adding that with large customer bases, all Telcos should look beyond their traditional offerings (voice and data) for how they could better support their customers. 

“We have taken great steps to do this, but I believe that all Telcos should invest in infrastructure, and work with partners to make the internet accessible for all. 

“For us to advance as a nation, we must have access to digital forms of knowledge, financial services, and markets – this will only be possible through digital connectivity in every corner of the country,” he noted. 

Restating his company’s commitment to working with customers, partners, and the government to support the transition into a digital economy, Mmobuosi noted that the mobile technology arm of the company not only invests in voice services but data.  

He said: “A major hurdle has been the reliability and reaches of mobile/data services in rural parts of Nigeria. We have invested heavily in portable mobile base stations which we have installed to provide or support connectivity in areas, which previously had weak or no connection.”

If properly harnessed, Temitope Ogunsemo, who heads Lagos-based, Krystal Digital, noted that the digital economy could help tax revolution in the country.

Considering that the Federal Government has been making efforts to boost tax revenue, Ogunsemo sees investment in technology, and bringing the unbanked informal sector under a structured platform could change the game in economic improvement.

Divisional President for sub-Saharan Africa, Mastercard, Raghav Prasad, had earlier told The Guardian that in Nigeria, more than 90 per cent of payments are still done in cash, adding that cash exerts a very heavy toll on the economy. 

He equally stated that the cost of cash, which includes the burden of printing the cash, storing it safely, transporting it, and providing the on and off-ramps for it to enter and leave the economy, is on the average 1.5 per cent of a country’s GDP.

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