The Oxford Advanced Learners’ Dictionary defines money as “what you earn by working or selling things, and use to buy things, to borrow, save, spend, earning money coins or paper notes.”
Indeed, money is a major means of business transactions. The introduction of money to replace the old method of buying and selling through trade by barter has facilitated trade in the world today.
Recently, the Central Bank of Nigeria, CBN, proposed a monetary policy known as cashless policy to ensure easy movement of cash in the country. One of the aims of the cashless policy is to fight corruption in the country. Already, the policy has been officially introduced in Lagos State.
I think the CBN’s cashless policy is already working as many Nigerians now use Automated Teller Machine, ATM, credit card, bank cheque and bank draft. The e-payment and e-banking systems are also indications that the cashless policy is effective.
It is true that the policy has made transactions easier for bank customers. The e-banking system for instance, has contributed immensely to banking operations in the country. Despite some difficulties of the method, and perhaps its failures, Nigerians have been able to cope.
However, I think the people should be cautious of Sanusi’s version of cashless policy that is being experimented. I am particularly averse, to the way the policy was introduced. Without consulting Nigerians and soliciting their understanding, the CBN Governor simply embarked upon an aggressive campaigns of the policy.
His action underrated the capability of Nigerians to make educated input into the policy.
Whenever the CBN introduces a policy, it should consider the nature of our fragile economy which is often exemplified by the high exchange rate of the naira to the dollar. The CBN should consider the Nigerians, as the ultimate beneficiary of any monetary policy. Let Sanusi bear in mind that whereas Nigeria is the biggest country in Africa in terms of population, it is not the biggest economy in the continent.
The CBN Governor has not perfected his cashless policy, yet he has already announced a planned introduction of a N5,000 note and coins.
If Sanusi had a good sense of history, he should have known that Nigerians are averse to the use of coins. And so what formula does he intend to use to compel Nigerians to accept the coins?
I remember that some years ago, specifically during the military era, coins were introduced. But they were never accepted. Also, when Prof. Soludo was CBN Governor, Charles of Central Bank, he introduced some coins which included 25K. Where are those coins today? This implies that the billions of naira that were spent on the production of those coins were wasted.
Even the commercial banks that ought to promote the usage of the coins then, failed to do that.
As an economist, Sanusi should have known that both the introduction of the N5,000 note and the coins will cause inflation. The CBN is unable to control the current double digit inflation, therefore, adding this policy to it will render the earning power of the average Nigerian useless.
Another point Sanusi has to explain to average Nigerians is the relationship between the planned new currencies and his cashless policy. As a layman and one who is barely literate on economic matters, I do not see the connection. If the planned N5,000 note, will enable Nigerians carry up to N2 million conveniently, does that promote a cash or cashless policy? Nigerians should not be deceived. Rather, they should ask questions.
I have no doubt that the planned new currencies will cause inflation as stated earlier. In addition, it will promote corruption, by encouraging looting of public funds. The CBN should re-consider its decision on the policy.
The introduction of new currencies is not the solution to the nation’s poor economy, and should not take priority in our national life. It will certainly not provide answers to the depreciating value of the naira. Let the CBN concentrate on curbing the high inflation rate.
Nevertheless, if Sanusi is so convinced that his policy is sound and that Nigerians have failed to see what he sees, and perhaps failed to know what he knows, let him embark on a long sensitisation campaigns to enable us assess the policy and give him a feedback.
Ogwuonuonu writes from Port Harcourt.