It is no longer news that the Central Bank of Nigeria (CBN) is seriously gearing to commence the implementation of a nationwide cashless policy by June1, 2012.

Of major concern, however, are media reports that the ongoing pilot tests of the policy in Abuja and Lagos have continued to reveal fresh inadequacies almost on an every-other-day basis without a matching speed at remediation.

Much as Nigerians may appear to admire the ease with which modern technology is being used to facilitate non-cash payment for goods and services in the developed world, there is enormous doubt as to whether situations on the ground down here can accommodate a wholesale importation of such complex but seemingly simple payment culture.

If there are countries that need a cashless policy, it is surely the likes of Nigeria, Zimbabwe and the Francophone nations which would usually require a huge stack of their bank notes to exchange for a unit of American, British or Eurozone currency.

Whereas an American belle can conveniently walk through New York’s Wall Street with $3,000 (in $100 bills) tucked inside her handbag, her Nigerian counterpart can hardly carry an equivalent sum (N465,000 in N1,000 notes) on Broad Street in central Lagos without seeing the Area Boy in any man that smiles at her.

The CBN intends that its cashless policy would serve to encourage the use of such alternative payment channels as automated teller machines (ATMs), point of sales (PoS) terminals, mobile banking, Internet banking and electronic funds transfer alongside the long existing use of cheques and bank drafts.

Even before the kick-off of its trial runs, the apex bank had already placed ceilings on personal and institutional daily cash withdrawals at the banks.

Its initial approval of N150,000 and N1 million daily cash withdrawal limits for individuals and corporate bodies later got an upward review to N500,000 and N5 million, respectively.

This simply means that any over-the-counter (OTC) cash withdrawals exceeding these sums would attract a 10 per cent default charge and may also run the risk of raising undue security alert.

Among the benefits being touted as derivable from the CBN policy include: tracking of crimes such as armed robbery, kidnapping and money laundering; reduced risk of carrying bulk cash; saving man-hours spent queuing at the bank; easier accounts auditing; faster service at reduced cost; 24-hour service; immediate notification of transaction on user’s account; electronic buying and selling in line with modern global practice; ready access to data for economic planning and research; and elimination of problems associated with issuing change after payment.

For Nigeria, the planned introduction of a cashless policy may be ill-timed. This is partly because the country is yet to place a firm grip on its pitiable electricity supply situation. And considering that nearly all the payment channels are built on gadgets that depend on stable power sources, it becomes disturbing how the CBN hopes to achieve its new policy without first ensuring that the nation, particularly the urban centres, enjoys a modest electricity supply.

Furthermore, Nigeria suffers from high rates of illiteracy and rural underdevelopment. Even to this day, there are communities in this country where barter is still the chief means of exchange for goods and services. The absence of banks and inadequate money supply means that such communities have continued to suffer exclusion from the nation’s financial system.

This exclusion of the rural population was made even worse by the recent upsurge in armed robbery attacks, kidnapping, resource- control militancy and its associated brigandage which led to the closure of many rural bank branches, especially in southern parts of the country.

Apart from these, there is also this growing doubt in the ability of the CBN to successfully manage the cashless process.

It would be recalled that the financial systems regulator had on a number of occasions failed to push through some of its own regulatory measures. For example, in spite of its massive campaigns aimed at discouraging the abuse of naira notes (particularly at the eateries, parties and other ceremonial grounds), Nigerians have carried on as if the campaigners were a bunch of killjoys.

Even more poignant was the relentless rejection by Nigerians of the CBN’s recent attempts to reintroduce the use of coins alongside the nation’s currency notes. Instead, reports were rife that local jewellers preferred to melt such coins and have them molded into ornaments and other objects of greater face value.

Added to this is the discovery that deposit money banks (DMBs) have continued to flout the apex bank’s directive that they stop the practice of wholesale banking and concentrate on their traditional commercial banking services.

The CBN’s cashless policy is reportedly being pursued as part of measures aimed at accomplishing a stable financial system pursuant to its FSS 20:2020 vision which in itself dovetails into the wider national Vision 20:2020 project. If this is true, then the remaining eight years would still have been ample for a step-by-step approach to the introduction of the alternative payment channels than the simultaneous roll-out method being adopted.

Already, the ATMs which, at the time of their deployment a few years ago, held some promises of a success story are now confronted by long queues and a plethora of complaints. Out of the three machines that may be found at any urban bank branch, only one can be said to be functional at any given time. As for the other two, they would almost certainly be ‘temporarily out of service!’

Having apparently failed to maximize the benefits accruable from using the already existing ATMs, there is nothing to suggest that the nation stands to pull off much from the planned introduction of new multifunctional machines and the licensing of Independent ATM Deployers (IADs) into a system that would soon get saturated with diverse electronic payment channels and their vendors.

Another make-or-break factor in the implementation process is the readiness of the telecommunication network providers to improve the quality of their services. Already, Nigerians are being heavily fleeced for making mostly voice calls and using short message services (SMS). One can, therefore, imagine what awaits the nation when m-banking and the other network-dependent services are forced on the citizens.

A number of these telecoms firms are already partnering with the banks in attempts to outsmart their competitions at e-payment solutions development. What’s more, their banker partners are now in the market with very tantalizing newspaper advertisements some of which even tend to suggest that such solutions possess fail-safe characteristics. But try as they possibly can, it will only be a matter of time before mischievous bank staff, retail agents, poor network and Internet hackers rip the entire system to shreds.

Going further, the Economic and Financial Crimes Commission (EFCC) and indeed all the law enforcement apparatus should brace up against the impending upsurge in cases of identity theft, issuance of dud cheques and other related misconducts.

Cashless policy may be the vogue, but certainly not for a clime with so much illiteracy, poor infrastructure and a terrible maintenance culture. Talking of Nigeria, that is.

Ibelema Jumbo