The Central Bank of Nigeria (CBN) has been advised to implement adequate national technology backbone and other fundamental measures to alleviate the adverse impact of the naira redesign policy on Nigerians, and expedite the transition towards a cashless society.
Managing Editor & Publisher, The Ojo-Yoshida Report, Bolaji Ojo, who gave the advice while speaking at the Technology Times Digital Transformation Thought Leadership Series, said that Nigeria needs to invest in its infrastructure to power the digital economy by ensuring stable, reliable, and affordable electricity; while telecommunication network must also be strengthened to foster digitalisation that are essential to achieving a cash-free system.
Ojo, the former Managing Director, EMEA, and Global Editor-in-Chief, AspenCore, where he was responsible for editorial globally and supervised sales, marketing, and product development in EMEA at the global technology media organisation, said that based on his experience across the developed markets of Europe and America, Nigeria’s banking industry has taken giant leaps over several developed economies.
In fact, Ojo said: “What I would say is that Nigeria is pioneering certain actions that other economies are going to be forced to take. So, aside from the impact, so far, the negative impact on people in general, Nigeria is actually taking a leap forward ahead of some developed economies that are still primarily cash-based. And I can list quite a few of them. In terms of developing economies globally, Nigeria is also advancing things that others are going to have, to take steps towards. The cash-based economy is an anomaly today. It’s going to go away whether we like it or not.”
According to him, Nigeria can learn from other economies that have already achieved a cash-free system, and should take advantage of the experiences of countries such as the United Kingdom and Switzerland, that have made significant progress towards a cash-free system without promulgating a decree or a force of law.
According to him, “a key question is how do you implement it in such a gradual way that it doesn’t negatively impact people the way this one has been done. And you’re right. There are technology tools that can be used. But first, let’s start with the most basic things. You go to some economies, and you find that those economies have already achieved what Nigeria has achieved. So, we asked the question, what made it possible for them to do this without necessarily promulgating a decree or a force of law to say, ‘this is where we are headed.”
The Managing Editor & Publisher said that infrastructure is essential to a successful transition to a cash-free economy. Digitalisation of the global economy, he said, is accelerating, and semiconductors are in everything nowadays. He said a reliable telecommunication network and stable electricity are fundamental to everything, including the financial technology industry.
“However, in order for that to happen, you need to have power. If I’m returning to an old topic for Nigerians, it is because that is something that is fundamental to anything that we want to do in the economy. We need to have stable, reliable and I would say, affordable electricity, ” Ojo said.
That is fundamental. That has to be a priority to the Nigeria system. It doesn’t matter whether we are talking about financial technology or the rest of the economy, industrial or whatever it is that we are talking about. That underpins everything. In order for you to have a cash-free or reduced cash system, you need to be able to have the infrastructure in place,” Ojo said.
He explained further that, “you need to also have the telecommunications network in place to foster that. In most developed economies where they have moved towards these goals, those are the underpinnings, the fundamentals that they had in place that allowed them to do that. When you have spotty coverage, when you spend 10, 20, 30 minutes just trying to send messages across, or to access the app for your banking, you are not going to be able to have what we are desirous of if we don’t solve that problem.”
To find sustainable solutions, he advocates that public-private partnership is essential to the transition to a cash-free economy that will involve all levels of government working together to achieve the goal.
In essence, Ojo said, “this goes beyond the Central Bank. It cuts across the economy. It involves the Federal Government; it involves State Government; it involves Local Governments. We tend to load most of these on one arm of the Government. The Federal Government should provide electricity. They should do this, they should do that. It has to be a public-private partnership. Local Government, if empowered, can also be involved.
“There are Local Governments elsewhere in the world that actually offer wireless, Wi-Fi services to their citizens in precisely defined areas. When you have that, when you have the backbone in place, you can do what we are talking about. The infrastructure has to be in place, that is key.”
Ojo, who is also a member of Swiss Fintech, a leading industry organisation that supports and promotes the growth of the fintech sector in Switzerland says that compared to the Swiss and other developed economies including the U.K. and U.S., Nigeria has leapfrogged the old technology of banking.
