Doing the Right Thing the Wrong Way: Emefiele’s Cashless Policy
By: Deji Yesufu
These are strange times in Nigeria. While Nigerians are not strangers to difficulties, it is not often that they come at us at once. Today Nigerians have to battle unavailability of fuel and couple it with non availability of legal tender to carry out transactions. The Central Bank of Nigeria, led by Godwin Emefiele, have said there is no going back as far as the new Naira Notes are concerned. Nigerians have no problem with changing the old notes with the new. The problem is that the new notes are simply not available, while the deadline for the use of the old notes are around the corner. A few days ago, Ibadan was plunged into a state of violence, with pocket of riots in different parts of the city. The violence have been quelled now but what precipitated it is only getting worse. Gate, Ibadan, was worst hit by the riots and here was my experience visiting that part of town yesterday.
I needed to get some equipment for the house and Gate is the place to do this at a reasonable price as far is Ibadan is concerned. The shop I was referred to had a fairly elderly gentleman there – he was just completing his breakfast, eko and ewa. After enquiring for what I wanted, I discovered he had everything in his shop. The only snag was that he didn’t have an account number and so I couldn’t transfer money to him. I was reluctant to go somewhere else because of time, so I acquiesced to his suggestion to use the only functional POS there. The woman charged me N1,000 for the N5,000 I collected.
When I returned to the man, I paid him his money but I told him that I will never carry out such a transaction again. That traders who cannot “collect transfer” will henceforth lose customers. He told he will get an account, latest, today. As we were talking, another customer came. He purchased goods and was about to make a transfer, when Baba said he had no bank account. The man left. I turned to Baba “see what I was telling you…” Right away Baba asked his sales girl to pursue that customer: he will get someone’s account to pay the money into.
Now, consider that experience with me: Baba Gate, let’s call him that, has been operating at that place for years now. Yet he had no account in the bank. He keeps his money under his pillow and makes transaction that way – in the 21st century! CBN has now forced Baba to join the league of electronic bankers.
Besides putting a hole in the malfeasance of Nigerian politics, the CBN cashless policy will discourage the over abundance of the naira in the Nigerian market. Basic economics teaches that the root of inflation is when much cash are pursuing few goods. The flip side of it is when few cash pursue much good – it forces down the cost of goods and services. Already in Bodija market, tomato sellers are being forced to bring down the cost of tomato because there’s very little cash to purchase them. In all, the CBN cashless policy is a good thing. But it is possible to do a good thing in the wrong way and that’s why Nigerians are feeling the pains of the cashless economy.
The CBN should have considered the peculiar situation with Nigeria before embarking on this policy. They should have understood that the moment their cashless policy comes to fore, there will be elements who will seek to circumvent it to their own advantage. Right now there are no cash in town because two things are happening: politicians are mopping up every available resource for the coming elections. Wads of cash that should be inside the ATM are given to politicians by unscrupulous bankers for profit. The second thing that is happening is that lorry loads of old monies must be replaced by new ones by some accursed Nigerians who are convinced that their money will be following them to their graves. While one cannot comprehend the foolishness of people stacking up cash inside their houses, instead of putting them in banks, the likes of Baba Gate and Nigerian politicians show us that such foolishness is normal in this clime. Thus, the CBN ought to have factored in these circumstances and many more before venturing into it.
Alas, we are in it and there’s no going back. It is possible that Godwin Emefiele saw this and understood that after a few weeks of pain, Nigeria will get over the scarcity of cash and life will return to normal. In that space, Nigerians would have been forced to spend money electronically. The likes of Baba Gate would have gotten an account, and more and more Nigerians would have learnt the advantage of a cashless economy. Inflation will be checked and everyone will live happily ever after. In a bleak period like this one, Nigerians can be positive and also hopeful.