The Central Bank of Nigeria (CBN) started its Cash-less Nigeria Project in 2012 with a pilot phase in Lagos State before extending it to other states of the federation. Seven years later, the apex bank is still making adjustments to the project.
Unlike the apex bank’s move to gradually reduce the volume of cash in circulation, the attempt by Dr Isa Pantami, Minister of communications and digital economy, to make the Nigerian Postal Service (NIPOST) go cashless can be likened to putting the cart before the horse.
In November, Dr Pantami, in a press release credited to his spokesperson, Uwa Suleiman, directed the Postmaster General to suspend cash-based transactions in all NIPOST establishments with immediate effect.
— Fed Ministry of Communications & Digital Economy (@FMoCDENigeria) November 7, 2019
The NIPOST boss is also expected to ensure that all its offices revert to Point of Sale (POS) and bank teller transactions immediately.
According to the press release, people have used the cash payment system as a means of engaging in corrupt practices.
On the notice board at the entrance of the General Post Office at Ikeja is a public notice about the legality of the handling charge paid by recipients to take delivery of their items.
The notice states that depending on weight, the charge ranges from ₦200 to ₦500. Just as stated in the press release, people pay as much as ₦50, 000 — 9,900% more than the prescribed charge — as handling charge at post offices.
This seems to make the move by the minister appropriate. Beside its appropriacy, there is the matter of timing.
NIPOST’s readiness to go cashless
While it’s a good move, there are questions about the postal service’s readiness to fully implement a cashless system considering the suspension is to take immediate effect.
In an attempt to test NIPOST’s readiness we visited some of its offices in Lagos, Ogun, and Akwa Ibom states.
The General Post Office in Ikeja has a POS terminal but NIPOST officials advised that I make payment using cash. All three officials I interacted with gave the same reason why I should pay cash:
“You will pay extra if you use the POS [terminal].”
“There’s an ATM closeby,” one of them responded when I claimed that I don’t carry cash.
Just as they had pointed out, I paid ₦559.60 for a ₦400 stamp, which was ₦159.6 higher than what I would have paid had I followed their advice.
Unlike the stamp duty, that is ₦50 on transactions valued at ₦1,000 and above, the NIPOST officials don’t know what the extra charge is for.
I called to complain about the extra charge and according to the official I spoke with, the extra charge is for the players within the payment value chain.
But for my story, I’d have listened to them and paid with cash.
At the General Post Office in Ibom Plaza Bypass road in Uyo, Akwa Ibom State, there is also a POS terminal but cash transactions are still being accepted.
At the Oshodi Post Office, it is a different story.
Despite the NIPOST official who attended to me pointing out an awareness of the minister’s directive, the branch doesn’t currently have a POS terminal.
“We only saw the circular for the POS [terminal] usage but they are yet to give us any POS [terminal],” the official said.
When I pointed out that the branch in Ikeja has a POS terminal, the person at the Oshodi office countered, saying it was probably because the Ikeja branch is the zonal headquarters.
The Oshodi branch runs a strictly cash-based system since there’s no POS terminal in place.
The same applies to the postal agency’s branch at Isara Remo — Remo North Local Government Area headquarters — in Ogun State.
According to the official I spoke with over the phone, the postal agency will give out POS terminals gradually because it’s capital-intensive.
This again raised the concern about preparedness.
There are 955 post offices and over 3,000 postal agencies throughout the federation. This means that NIPOST will need to provide almost 4,000 POS terminals.
A different take is that presented by a mail carrier with the Somolu branch of the postal service who claimed that the directive on POS terminal usage is only for transactions worth ₦5, 000 and above; those less than ₦5, 000 are meant to be cash-based.
Activities outside post offices
There’s more in the notice about the legality of the handling charge cited above; the charge is meant to be paid for using a POS terminal.
Worthy of note is that mail carriers who handle house-to-house deliveries accept handling charges. This makes one wonder if the postal service will be giving out POS terminals to its carriers.
Somolu post office alone has 17 mail carriers. This implies that Somolu alone will have not less than 18 POS terminals if the postal service will follow the minister’s directives to the letter.
The number of post offices in the country threatens the implementation of the directive. One solution, however, is the limitation of cashless transactions to activities within post offices alone.
The other option
There’s also the option of using bank tellers for transactions. However, this may pose a problem as customers then have to consider if going to the bank to make payments is the best use of their time.
Also, some post offices are located in communities that don’t have commercial banks. For instance, Isara has a post office but does not have a commercial bank branch.
It appears the postal agency is not ready to follow the directive to go cashless. Techpoint reached out to the office of the Postmaster General and had gotten no response as at press time other than an acknowledgement mail.
Nigerian startups raised $377m in 2019, more than twice what they did in 2018. Find out more when you download the full report.