 Welcome back. It's all the breakfast and plus TV Africa. We're zooming straight to a first major conversation this morning In 2012 the central bank of Nigeria began the implementation of the cashless policy Setting a limit to the daily cash withdrawal of individuals and organizations as first-time Nigerians had all the cashless policy as far as Implementation country was concerned and so apart from those limits on withdrawals They also had a cash handling charge when the limit was exceeded this policy on cash-based transactions withdraws in particular in Banks I was aimed according to the CBN then at reducing the amount of fiscal cash in terms of coins and notes Seculating the economy and encouraging more electronic based transactions in terms of payments for goods services and transfers Etc. According to the central bank of Nigeria at the time the policy aimed to increase the development and Modernization of the Nigerian payment systems in line with the then vision 2020 goal Remember that many years ago to become one of the top 20 economies in the world by the year 2020 this is 2023 well at that time the central bank of Nigeria also aimed at creating avenues for economic growth Reducing the cost of banking services including the cost of credit and increasing Financial inclusion by providing more efficient transaction options that should result in a wider reach now the bank recently Revised its cash withdrawal limits and change the country's currency design While mobbing up and drastically reducing the number of cash in circulation in a bid to ramp up the cashlessness of the economy what lies ahead for the Nigerian Economy and Nigeria as a nation as far as this cashless policy is concerned. We have a guest joining us this morning He is a renowned financial analyst Mukta Muhammad. Thank you for your time and good morning to you Thank you. Good morning. All right Mukta 2012 to 2023. I think he was a Star plus who sang the song four years don't walker. We still a carry go. This is almost it's about 11 years In Nigerian Pigeon English in 11 years don't work out. What is your analysis of? The success or otherwise of this cashless policy as it was introduced by the then CBN governor I mean it was everywhere cashless policy. That's number one number two. Why did we have you know next to know? controversy, bro. Ha ha confusion in 2012 and we're having a lot of confusion a lot of confusion in 2023 with this cashless policy Let me start with the second question. I mean the reason why we are having the booha and all lot of confusion because it's a political year. I Can tell you because it's a political year 2012 was not a political year If it was a political year, we still have all this talk because let me tell you the truth is that Nigeria election is driven by cash Cash moves from point A to point B. It's a known fact. We've had issues in 2015 where A plane moved cash from Lagos to Elori. We have issue of Billion burning Lagos also So it's just because it's it's an election. Yeah, and we have a Policy that seems not to fee for the politician, especially in the area of both buying So there's nothing that's changed and Nigerians are impressed cashless policy Like you said this policy started that year 11 years ago and that policy have continued to improve Remember it started with just Lagos a loan letter and they put other states then they got for other states So it was not just a policy that just came on stream immediately and everybody were into it So definitely now the most Nigerians embrace the cashless policy Even those that are complaining now is because of the fear because of the fear of like old Transaction and need to buy something in the market. Those people have not totally embraced the cashless policy Especially the informal sector. They have not totally embraced the cashless policy. The former sectors have embraced the cashless policy I'm sure you can't remember the last time you had up to like 20,000 cash in your hand that you're taking all around So it's it's it's all about them getting the informal sector into it And I think that's where we missed it all even if we introduced the purest terminal with those the money agents All these were geared towards bringing them into the cashless policy But I think those those policy have not really worked the way we thought they should work, especially what is happening now You said that the this is happening the boo-ha-ha were experiencing now. That's because of the Election year, but is that really the case because I remember that at the time this policy was introduced from 2012 and then up until 2015 it was suspended because If you look at in terms of technology, we needed to get up to speed at some point We had to suspend it to give time, you know, to the banks to put the arcs together. So is that really the case? Well, remember that this this suspension was not a total suspension is it's all about Trying to get other people to impress it, especially Other part of the country that in terms of infrastructure was not there and that even after that that did not cause so much noise Like what we are seeing now The what people were complaining at that time was the it was not easy for them to do some of their transactions And so the CBN had to put a stop on it and told the banks to improve the infrastructure You agree with me that some of these issues have improved Even if we have our complaints that they have not 100% improved, but they have they've been a little bit of improvement, especially in terms of transaction failures The the the the numbers have reduced in terms of compliance in when you have issues Before you used to think about the dead 14 work in this but these days we've seen it reduced to five work in this sometimes six What is that sometime it is resolved within 24 hours. So they've been a lot of improvement in in in in in terms of this cash less policy from 2012 till now Yes, they had the suspension but was to improve the infrastructure. The only challenge we have with 2023 on is like I said political It is incident and I think the bank will not Totally prepared in terms of infrastructure to be able to get about almost let me say about 70 million Nigerians trying to do transaction at the same time So I think that was why I was saying at the time the CBN came up with those policies What they should be thinking about that I was to partner with the bank to see how can we partner together how can we improve the infrastructure How can we make this cash less policy better then they would have come out proposal or like share infrastructure whereby they will be sharing banks will come together build strong network whereby all of them will share and that also will reduce costs and that also will make these transactions and you could say that we have the national The NIMBY there's settlement bank. Yes, this part of the share infrastructure, but it will be better. That one has to do with settlement But we're talking about we'll talk about gateway. How can we come together for one gateway that can enhance banking transactions? It is a cashless economy anywhere in the world. Do we have any economy in the world that is totally cashless or if not totally cashless To the extent of the ratio of money out there to a printed currency that the central bank is trying to implement Do we have any economy out there that is such that this cashless where you want to take out money from an ATM Let's just look at if everybody has new now everything is working perfectly but look at the amount of new notes the CBN says they want to put out It means it would mean that if you might go to the ATM because I've withdrawn a lot of the money you might not have money to withdraw because there's not enough to go around So is there any economy in the world where you go to an ATM, anybody? Let's say everybody wants to get money on that day You can't get it because the central bank says we don't want to have too much cash in circulation I don't think there's any economy in the world that does that. I think I only see a particular situation because of Maca keeps saying the politics have taken the side of the economy Even if it's much as one of the tools that the CBN used to contrainflation is to more public with it It's also true but telling people to use only one medium don't go to the banking you cannot give over the counter only use the ATM The ATM you have to well when you talk about limits in ATM all over the world there is limit in how much you can withdraw from the ATM So those limits are based on the security systems whereby they try to make sure that somebody doesn't steal somebody card and go to the ATM and withdraw everything So they try to put those balances so that you can walk into the bank and do your transactions There's no economy in the world that is totally cashless The CBN also have introduced penalties in terms of if you or if you come in there and you want to withdraw your cash if you are going to withdraw above this limit they are going to pay That's what is done all over the world. So but I think now we are having a very peculiar case whereby the CBN have not been able to print enough cash into the economy And also that is that's also remember that we are in a very inflationary environment at the moment when all the CBN Governors met in Duvay, Switzerland during the World Economic Summit They looked at moping up liquidity as one of those two that they can use to contrainflation because inflation has become a global global challenge But and I think most of that's why the CBN kept saying that one of the reasons why we are doing what we are doing is to contrainflation But I think they've gotten it all wrong because maybe the timing or they were not prepared for what they are saying They didn't take into consideration that the informal sector which seems to be the key driver of Nigeria economy is largely driven by cash Well so I mean you have stated that with all of this all that we are experiencing cashless economy the CBN probably wouldn't have printed enough monies into the system or to the economy And that's why we are grappling with it but the CBN on the other hand is saying we have political parties and the elites the ruling class And very privileged persons of the society who have you know decided to take out this cash they've mopped up this cash And that's why we're faced with the scarcity of the new narrow that's on the other hand But I'd like us to get back to the issue that if we had I mean we've had the cashless policy since the time when you had San Jose as the CBN Governor And up until the Mephiles period and implementing it seemed to be a big issue This is a time where we're implementing what exactly are we dealing with the lack of awareness Were we able to put out the necessary infrastructure creating enough awareness because if you go to the banks I mean we go to the markets now local markets you don't have some of these traders having the POS machines And for one if you also look at the benefit of it I remember a time where I had to report you know story where markets and fire The market was actually taken by fire and people lost cash so I'm thinking to myself if we were if these marketers had the POS And what have you I'm probably sure they won't be crying the way they were crying they have lost millions of Nair Yes I said it's the POS operators did not I mean the informal sector have not embraced totally the cashless policy Whose responsibility should that be that's my question My the responsibility is good ways you made mention of a situation whereby the market women had their cash put stock in there And there were a fire incident and those cash they lost those cash they should also think of that on their own side Then the other side of the responsibility seemed despite of the CBN coming with the banks to make sure they enlightened Nigeria About the benefit of the cashless policy I remember there was a time that there was jingles all around by put the CBN at the banking committee And trying to encourage Nigeria to embrace the cashless policy but I think they didn't do enough to get most of especially the The market women to begin to embrace the cashless policy when it became obvious that people were mostly those from the informal sector When they come to the market they totally come cashless and then the CBN sat down and came up with the POS And okay the market women were now when you go there instead of them having their own POS terminal where you can do this exchange They rather take you to the POS bend off beside them because of the the the cost implication of it They were not ready to pay the fees that comes with this because they felt that that will impact on their profits So that's also another challenge and that is why we keep saying that is there where the CBN can begin to think how they can reduce Could be a reduction in terms of charges from the POS or from the ATM machines and all that remember before now You can only where we keep saying that the category before now you can only go to your own bank ATM to withdraw money After sometime you were allowed to withdraw money in other ATM but after three withdraw the fourth withdraw you have to pay a fee I think these are things that the CBN need to look at and also look at ways to reduce the charges that people charges Especially the market women the informal sector if they do that they would definitely embrace the cashless policy Look at it as a means of social corporate responsibility on the part of CBN on the bank to build this infrastructure To make to encourage people that look if you go cashless this is what is going to happen to reduce your costs to improve your When you begin to see that based on the numbers every business we have would definitely embrace the cashless policy And remember again that suspension of that policy at that time from 2012 where we had the suspended in 2015 Also was because we're coming to a remember people complain is because it's coming to an election year again They want to move cash from point A to point B remember that time the party in power also suffering from a crisis of confidence from the people They needed to move cash also to so definitely once you see this crisis comes into play you always always remember that it's always happen when you have an election coming All right, all right, but before I go moved out because we're looking at the future of cashless Nigeria We really would have to ask you this question and I want to a very short answer for you And what do you see you know in Nigeria at the end of this year probably and will we be as cashless as you have for instance in China where They've gone on from just being cashless to being contactless and they do all this scant to pay where you don't even use a card anymore You just use your phone scan the QR code and you pay are we going to get to that point maybe in the next 12 months probably In the next 12 months get all to that point but you agree with me people are now using the same thing the China you just scan scan and they do your payment If you go to some of these people that I keep seeing all these ways that the former please we need to drive it to the informant sector also And secondly again remember in January now the the the terms of transaction to the cashless and medium has improved as I mean if you look at what the 125% increase and so definitely it's getting better by the day especially because of this crisis even I mean I was jokingly telling somebody I went to buy Suya and I told the man that I don't have cash he said oh god you can transfer it to my account and he gave me his account and I transfer The money to him I went to his side to buy a small shops I mean the guy said look you can transfer to my account So definitely people are beginning to impress the cashless policy and I think before the end of this year we might get penetration up to 70 to 80% Alright alright thank you so much I appreciate your time it reminds me of the iconic picture we've seen on social media of a young man selling bread And he has a little flyer paper you know laminated paper at his back saying he also does transfer as well he's hooking bread and he says he also I mean let me add it to what you are saying even on traffic you know on Todman land bridge a friend of mine was telling me when he wanted to pay And he told the guy I don't have cash the guy said I have account or guy you can transfer it to those boys on traffic so you can see we are getting better Alright thank you for your time we have to go you know in China in villages they do scan to pay so maybe we will get there it's not as bad as it sounds Thank you so much for your expert analysis as always Thank you my pleasure Thank you so much we have to go now and I'm just thinking that if we have been very honest 2012 or until this moment we probably would have gotten it right And not still asking people to accept and embrace transfers and we'll have you we take a break when we return it will be time for us to delve into a second conversation Now the Nigerian government is making plans to combat climate change and that's by introducing you know carbon tax Stay with us good morning