CBN’s cash-less scheme goes to six states in 2013

THE Central Bank of Nigeria (CBN) will only extend its cash-less scheme to six states in January next year, contrary
to the planned nationwide extension of the initiative.
The CBN, which listed the states to include Abuja, Anambra, Kano, Ogun, River and a state from North-East, noted
that it opted for implementing the project in phases because of the need to ensure thoroughness.
The apex bank, Governor Sanusi Lamido Sanusi, disclosed this in Uyo, Akwa Ibom capital, at the weekend during
the 24th National Conference of Nigeria Computer Society (NCS), which held under the theme: “Towards a Cash-
less Nigeria: Tools and Strategies”.
Sanusi said: “The whole idea initially was that the policy, by January 2013, would go live in all parts of the country,
but we have changed the plan because of effective implementation purposes. We are now going to start with six
states. They are Kano, Abuja, Ogun, Anambra, Rivers and one other state from the North-East. This has to be done
because of the need to ensure things are put in proper shape.”
The CBN governor, whose position was articulated by Mr. Chidi Umeano, said as part of efforts to ensure the
successful implementation of both the existing pilot programme in Lagos and that of 2013, the CBN, in conjunction
with the Banker’s Committee, had embarked on a shared services programme with three objectives, including a
drastic cost reduction by 30 per cent across the country.
He listed the programme to include cash management; payment system transformation; information technology
(IT) infrastructure and services; IT standards and back office operations.
Justifying the need to go cashless in the country, Sanusi said that cash-related transactions represented over 99
per cent of customer activities in Nigerian banks as at December 2011, adding that there were projections already
that cash management in the country would cost the apex bank about N192 billion by the end of 2012.
“Cash is an integral element that fuels several vices in Nigeria, including robberies and related crimes, high cost of
processing borne by every entity across the value chain, revenue leakages arising from significant handling of
cash, inefficient treasury management due to nature of cash processing, among others. But alternative payment
channels will have considerable positive consequences on the economy”, Sanusi stated.:::::

He noted that the cashless economy initiative was implemented, among others, to meet Nigeria’s Vision 20:2020
requirement; modernise Nigeria’s payment system; reduce the cost of banking services; drive financial inclusion;
improve effectiveness of monetary policy; reduce high security and safety risks and foster transparency and curb
corruption/leakages.
At a post-event interview, the CBN’s Head of Shared Services disclosed plans by the apex bank to partner the
National Orientation Agency (NOA) on possible need to help increase the awareness across the country.
Umeano, who said the cashless economy scheme in Lagos had been very encouraging, disclosed that about
150,000 Point of Sales (PoS) terminals had been deployed by CBN and the banks across Lagos.
He added that the transactions on them on a daily basis were in excess of N200 million.
While urging the banks and other payment transaction platforms to be Payment Card Industry Data Security
Standard (PCI DSS)- compliant to boost customers’ confidence in their operations, he explained that some
challenges must be tackled before the 2013 implementation.
According to him, these challenges include lack of understanding of the cash policy among the banked and
unbanked; resistance due to prevailing cash culture; techno-phobia (literacy vs numeracy); infrastructure
lag; distrust in the banking system; lack of clarity in communicating content of policy; lack of POS at priority
locations; and Customs challenges for clearing.
Others include exorbitant bank charges on e-payment products; need for standardised pricing to encourage the
adoption and independent on-line-real-time monitoring of electronic channels uptime.
He, however, declared that the apex bank was tackling the challenges, stressing that the success recorded in Lagos
so far had given the CBN hope of successful nationwide implementation, which would now be in phases from 2013