Pressing questions ahead as CBN sets to implement cashless policy from April 2020

by | Mar 5, 2020

The bid to achieve a cashless economy in Nigeria is about to hit another stage, as various commercial banks have begun notifying their customers about the proposed fees for deposits and withdrawals, with effect from April 2020.

In September 2019, the Central Bank of Nigeria (CBN) announced that there would be charges on deposits and withdrawals for both corporate and individual accounts when depositing cash above a certain threshold.

For individual accounts, cash transactions in excess of ₦500,000 ($1,370) attract 2% and 3% processing fees for deposits and withdrawals respectively. As for corporate accounts, processing fees of 5% and 3% are charged on cash withdrawals and deposits in excess of ₦3 million ($8,219).

The CBN kickstarted this process in five states:  Lagos, Ogun, Kano, Anambra, Abia, Rivers, and the Federal Capital Territory (FCT) in addition to the already existing charges on withdrawals.

Advertisement

We speculated that these states, strategically located in various geopolitical zones in Nigeria, were chosen as a result of the higher rate of internet penetration, and financial inclusion. For now, it appears the whole nation is prepared to experience it.

Also, we earlier pointed out that the use of e-payment channels seems to constantly be on the increase, as evidenced by the latest figures from the Nigerian Inter-bank Settlement System (NIBSS).

But these figures have not translated to a reduction in the use or circulation of cash.

Despite plans and various directives to drive cashless adoption, the amount of cash being printed by the CBN annually has constantly been on the increase.

To this effect, the CBN governor, Godwin Emiefele has reportedly urged Nigerians to adopt e-payment channels, revealing it costs much more than ₦20 to print a ₦20 note.

While this policy is a laudable initiative that could reduce the amount of cash in circulation, it remains to be seen if it will be enough to drive cashless adoption.

With a per capita income that averages at $2,222 (₦800,000) annually, the average Nigerian might need roughly 8 months in order to save up to $1,370 (~₦500,000).

Seeing that in most cases, Nigerians live on or below minimum wage, and has a predominantly cash-based culture, will this initiative really encourage cashless adoption?

Advertisement

Emmanuel Paul
Emmanuel Paul

Writer and Narrator.  Tech, business and policies fills my head. Looking to chat? Catch up with me (@eruskkii) on Twitter or send a mail to emmanuel@techpoint.africa

On January 22, 2022, be part of the largest gathering of innovators, startup founders, thinkers, programmers, policymakers, and investors in West Africa. Register free.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Recent News

Subscribe to Techpoint Digest!

A daily 5-minute roundup of happenings in African and global tech, sent directly to your email inbox, between 5 a.m. and 7 a.m (WAT) every week day!

Please check your email to confirm your subscription.

Subscribe to Crypto Explorer

A monthly series featuring in-depth analysis on the cryptocurrency sector in Africa

Please check your email to confirm your subscription.

Subscribe to The Experts

A bi-weekly where tech career specialists take us on their journey from newbie to expert, and how they became successful in the industry.

Please check your email to confirm your subscription.

Subscribe to Founder's Table

A monthly series, where we catch up with founders in the startup ecosystem, learn about their failures, successes and a few tricks of the trade

Please check your email to confirm your subscription.

Copy link
Powered by Social Snap