Infrastructure is it — Opinion — The Guardian Nigeria News – Nigeria and World News

President Muhammadu Buhari was naturally and appropriately excited when the Governor of the Central Bank, Mr. Godwin Emefiele, last week handed over the newly designed currency notes to the members of the Federal Executive Council (FEC).

The President summarized the benefits of the redesigned N1000, N500 and N200 denominations: new security features can make counterfeiting difficult, the possibility of better monetary policy objectives, enriching the collective memory of the country’s heritage, possibility to control the currency in circulation , reducing the hoarding of the major denominations and the cost of currency management.

For me, the happy hour was the moment when it was mentioned that the redesigned currency notes were produced and printed locally, proof of the President’s belief in promoting local content. The notes were produced by the Nigerian Security Printing and Minting Plc (NSPM). Two issues are of crucial importance here. It was said at the forum that only four countries out of 54 African countries print their currencies in their countries.

Newly designed banknotes due to counterfeiting and increasing security concerns are seen after Nigerian President Mohammed Buhari (R) unveils new banknotes on November 23, 2022 in Abuja, Nigeria. Nigerian Presidency / Anadolu Agency (Photo by Nigerian Presidency / ANADOLU AGENCY / Anadolu Agency via AFP)

Nigeria is one of the four, something of pride, an indication that Nigeria still has some redeeming features. Secondly, this is happening at a time when many Nigerian doctors, paramedical staff and lecturers are leaving the country in droves for greener pastures abroad. They call it Japa, the desire to move abroad.

It was also revealed that according to best practice, banknotes are supposed to be redesigned every five to eight years, but ours was redesigned almost 20 years ago. This may be partly why there are too many dirty and torn currency notes in circulation.

The new ones that may have been printed within the last 19 years are controlled by bank managers who sell them to agents who sell them to people who want to show off while stylishly spraying these notes on the faces and bodies of celebrants at birthdays, weddings, chieftaincy ceremonies and other meaningless social events.

As they spray and the notes fall on the floor and other sprays whose turn it is to show with these neat currency notes that pile up on the floor. The Central Bank says this obsession is illegal, but it continues every week at various ceremonies.

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For Nigerians, it will be a pleasure to have the newly redesigned notes, but it will not stay new for long and thus will not give us pleasure for long. Most of the notes now in circulation are very dirty, as if they were fed through a dirty machine. Most of them are also shredded as if fed through a malfunctioning shredding machine. A few days ago I was at a bank where the teller was struggling with torn and dirty notes.

First she had to separate the torn from the dirty. She was wearing a nose mask even though no one else in the bank was wearing one. Everyone falsely thinks that COVID-19 is dead, but it is very much alive. The only difference is that doctors and even private persons now know how to manage it. Sorry for the deviation.

The girl took a bundle of the notes and slammed them on her desk and as the dust washed out towards me I had to fish out my mask and stick it to my nose. I didn’t want to swallow the dust. Then she would sort out the physically torn from the nearly torn and put the usable ones into the counting machine.

Often they stuck to the machine and she gently pulled them off the machine with her painted fingernails. I watched in awe as she did a dirty job neatly. This was not an unusual experience. This is the norm in most banks. If you don’t want them, you can go home and starve.

Newly designed banknotes due to counterfeiting and increasing security concerns are seen after Nigerian President Mohammed Buhari (R) unveils new banknotes on November 23, 2022 in Abuja, Nigeria. Nigerian Presidency / Anadolu Agency (Photo by Nigerian Presidency / ANADOLU AGENCY / Anadolu Agency via AFP)

The CBN governor sought a cashless economy. It is beneficial. This prevents you from being physically robbed. This can prevent you from carrying around a lot of cash for transactions that can easily be done by punching four numbers. But note that this will not stop many of the financial crimes that are going on. Some robbers are now moving around with Point of Sale machines (POS). Kidnappers also have it for the payment of ransom. For a cashless economy to work seamlessly, the infrastructure needs to be there.

In my local government area, Ukanafun, in Akwa Ibom State there are 87 villages. There is not even one bank and there is not even one ATM gallery. To access a bank or ATM, you must travel for at least one hour.

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For the 87 towns there is only one police station with one Hilux vehicle and about 50 policemen. This is probably the situation in most local government areas located in rural areas. The Ibrahim Babangida government brought the idea of ​​rural banking and the People’s Bank from Southeast Asia. They thrived there because there was appropriate infrastructure and their economies were better developed than the Nigerian economy.

The International Monetary Fund (IMF) says Nigeria’s banks closed 234 branches and 649 automated teller machines (ATM) in 2020, leading to a decline in the country’s financial access score (FAS) to 4.44 in the year from 4 ,78 in 2019. it in its Financial Access Survey 2021 Trends and Developments.

The Fund uses two indicators the number of commercial bank branches per 100,000 adults and the number of ATMs per 100,000 adults. According to the report, Nigeria recorded declines in these two critical indicators and 12 other indicators among the 64 indicators measured by the FAS.

This was caused by the decrease in the number of commercial bank branches in Nigeria from 5,392 in 2019 to 5,158 in 2020. Similarly, the number of ATMs per 100,000 adults enabled the country’s financial access score to go from 17.19 in 2019 to decrease to 16.14 in 2020. The actual number of ATMs decreased from 19,459 in 2019 to 17.19 in 2020.

The report also showed a decline in the number of registered mobile money agent outlets in the country from 145,800 in 2019 to 129,154 in 2020. The decline in those three areas shows the general decline in the economy and people’s access to these financial instruments through which a cashless economy can be established. Presenting the newly designed currency notes, Mr Emefiele said the world had moved away from a predominantly cash to cashless economy.

This is correct, especially in the developed world, but for us to introduce this paradigm shift effectively, there must be the necessary infrastructure. The two examples the governor mentioned where people cannot easily withdraw either 10,000 dollars or 10,000 pounds are the United States and Britain.

Why it works in these two countries because their economy is very developed and the infrastructure is there for the seamless operation of a cashless economy. In Nigeria, anyone who has used his ATM card at a mall will tell you what he goes through most of the time. You may get a “denied” notice only to find out a little later that the money has been paid.

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You then need to go to your bank, fill out a form and request that your money be transferred back into your account. The other alternative is for the shopkeeper or cashier to go around the room and see where service is better. The final alternative is for you and the cashier to turn yourselves into prayer warriors and ask God or Allah to approve the transaction. I’ve had to do this a few times. Sometimes the prayer is answered; sometimes it isn’t. This is how these deals go in Nigeria. I doubt this is the way they go in Britain or the United States.

The other thing to keep in mind is that our informal economy employs more people than the formal economy. Our informal economy is also largely small and medium scale. Our informal economy is also largely rural based and most of the amenities you need for a cashless economy are not present. Therefore, people in these areas keep their money under their pillows. They don’t take them to the banks because there are no banks nearby. The People’s Bank and mini-banks operating in rural areas have since collapsed, leaving the rural people as helpless as before the banks made their temporary home in their communities.

The other factor to consider is that most of our small-scale farmers, traders and artisans are largely illiterate. A certain amount of education is necessary to function successfully in a cashless economy. Both the United States and the United Kingdom have over 95% literacy. You can say the same thing about most other European and Asian countries.

Nigeria is still a largely illiterate society, especially among those living in rural areas. What this means is that a cashless economy that works seamlessly in Nigeria is still a few years away due to some of the factors already mentioned. To a large extent, most urbanites are already happy to flash their plastic in front of cashiers because it’s a testament to being with it, apart from the ease of transaction if all goes well.

Something else that needs to be said is that the idea of ​​a cashless economy is not a project that belongs only to the Central Bank. The governments at the various levels must buy into it so that they can help provide the infrastructure that will enable its realization in the foreseeable future.

The central bank should emphasize this at every forum where it meets with federal, state and local government officials. If they don’t all buy into it, the CBN will simply tilt at windmills even if the idea is good.


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