The Central Bank of Nigeria (CBN) has introduced a new cashless policy which will take effect on 31 March, 2020 nationwide.
Despite call by the Federal House of Representative to suspend the policy, the CBN has refused saying the decision is no going back.
The CBN Governor, Mr Godwin Emefiele while briefing journalists on Friday September 20, 2019, said, implementation of the policy would continue as announced by the CBN.
WHAT YOU MUST KNOW ABOUT THE NEW CASHLESS POLICY
According to the CBN governor of the apex bank, the policy will only affect five (5) to ten (10) of bank customers, adding that it will help Nigeria compete with the economy of developed countries.
The policy isn’t a new decision as it seems, it has been on since 2012, they were only working on sensitizing the policy for the benefit of Nigerians.
The cashless policy was suspended in 2014, this was to allow more payment channels to be developed by Deposit Money Banks.
They’ve been increase in the cost of currency management every year since the policy was suspended in 2014.
Nigerian owned credit cards will be invalid if the policy is suspended.
“Since the policy was first launched, currency management costs have continued to increase year-on-year at an average annual growth rate of 33 per cent.
“Notwithstanding, electronic transactions have increased within the economy. We have provided alternative channels and people have embraced it.
“This is a strategic timing of these actions because on Monday, September 23rd, the mutual evaluation by GIABA (Inter-governmental Action Group Against Money Laundering in West Africa) on the country’s anti-money laundry and CFT (Combating Financing of Terrorism) regime will begin.
“Passing the mutual evaluation positions Nigeria as a safe and credible destination for financial transactions across the world.
“GIABA will be in Nigeria to access the rate at which Nigeria has embraced anti-money laundry and CFT regime. It is important that we display and show to them that Nigeria is indeed in conformity with their practices as enshrined in their anti-money laundry and CFA laws.” Emefiele said.
The Governor also explained why the increment in Value Added Tax (VAT) is a desirable development, saying, the increase in tax is the best way to shore up revenue as Nigeria has one of the lowest VAT rate in the world.
“The MPC endorsed the increase in the VAT rate from five per cent to 7.5 per cent. The government has the responsibility to fend for everybody.
“In fending for everybody means that it has to spend money to provide infrastructure — roads, airports, different things that will improve the lives of its people.
“There are two ways through which government can fund these expenditures. It’s either it raises revenue or goes for debt. You all know that the government has been criticised that the debt stock is too high.
“You all know that government debt service ratios are too high. What that means is that your revenue is small because if your revenue is large, then your debt service ratios will be lower,” Emefiele said.
According to the CBN govenor, the benefit of the policy will outweigh the cost though it might be painful to many Nigerians, adding that Nigerians should should be patience and comply with the policy as the result will be fruitful.