Cash is still king in Nigeria, Africa’s biggest economy, despite a decades-long push by the Central Bank of Nigeria (CBN) to switch to alternative modes of payment. Some 90 percent of transactions are cash-based, according to Bloomberg. Fees have been levied on cash withdrawals since 2012 but cash use remains high. In 2021, the CBN launched the eNaira -- a central bank digital currency or CDBC -- making Nigeria one of only 11 countries to do so. And last December, the Bank followed up on that by abruptly banning old naira notes and releasing lower volumes of the re-designed naira. It backfired: the currency change resulted in a cash scarcity crisis. The eNaira though, seems to be stronger. So what should the CBN do next?
Guests:
Chimgozirim Nwokoma is a Senior Reporter with TechPoint, one of Nigeria's leading tech publications. Chimgozirim's recent analysis on why Nigeria is not ready for cashless is here. You can also listen to Chimgozirim on the Techpoint Africa Podcast here.
Olubunmi Ayantunji is a legal practitioner and a legislative Draftsman with a focus on public policy. He is the founder of The Policy Roundtable and was a one-time consultant to a Nigerian parliament committee. Olubunmi has helped draft several bills, including the Plastic Bags Prohibition and Management Bill. He has also analyzed the recent cashless policy on Nigerian media channels.
Kelechukwu Ogu is an analyst with SBM, one of Nigeria's leading geopolitical intelligence platforms. Kelechukwu has worked prolifically on researching financial policies in Nigeria. He was a key contributor to new research from SBM - 'Strapped' - that focuses on the effects of the severe cash crunch resulting from a recent currency change policy by the Muhamadu Buhari-led administration.
Further Readings:
Strapped: Impact of the Cash Scarcity on Individuals and Businesses - https://www.sbmintel.com/wp-content/uploads/2023/05/202305_Strapped.pdf
Nigeria’s Cashless Policy (Central Bank of Nigeria) - https://www.cbn.gov.ng/cashless/Cash-Less%20FAQs.pdf
Access to Financial Services in Nigeria 2020 Survey - https://a2f.ng/wp-content/uploads/2021/06/A2F-2020-Final-Report.pdf
Nigeria and Digital Banking: A Revolution Still Waiting to Happen - https://theconversation.com/nigeria-and-digital-banking-a-revolution-still-waiting-to-happen-203435