2023 have been a torrid year for Nigerians. Events hit an abyss when new notes were rolled out, and the federal government stopped the old naira notes from circulation. Wait, what?? Let us retrace our steps and examine where this declaration started from.
In October 2022, the Central Bank governor, Godwin Emefiele, announced the recall and redesign policy. This was to encourage a cashless economy, stave-off cash hoarding, and lower kidnapping rates and terrorism. The House of Assembly doubting the sanity of this decision, summoned the CBN governor to explain this policy. He was excused because he was away from the country on medical grounds and personal engagements. In his absence, Aisha Ahmed assured Nigerians that the naira redesign was not politically influenced. The implementation date was set for 31st January 2023.
Nigeria’s push to replace its paper money with newly designed currency notes has created a shortage of cash, leaving people unable to buy what they need and forcing businesses to close across the West African nation, experts and business groups said.
African News, 2023.
RESULT OF THE POLICY
This policy had negative results. Naira notes became scarce; the old ones were no longer legal tenders, while the new notes were not fully in circulation. A total mayhem ensued in society as a result. People couldn’t access cash and major businesses came to a standstill. This was due to the lack of preparation for the policy, and failure to put in place adequate measures to ensure that the transition was smooth. People and businesses were unable to access the cash they needed, leading to the chaos and disruption that occurred. Analysts accused authorities of poorly implementing the policy in Africa’s largest economy. where digital payment services are usually not reliable and only 45% of adults have a bank account, according to the World Bank.
Nigeria, like many developing nations, has a significant gap between the banked and unbanked population. According to a 2018 survey by the Enhancing Financial Innovation and Access (EFInA), only 36.8% of Nigerian adults have access to formal financial services. This means that the majority of the population operates on a cash basis, with no access to traditional banking services.
The recent cash scarcity in Nigeria highlights the need for bridging this gap between the banked and unbanked population. This has left many Nigerians stranded, with limited access to their funds. Without access to banking services, they are unable to access their funds, and this has caused them significant financial hardship. This highlights the need for financial inclusion initiatives that can bridge the gap between the banked and unbanked population.
FINTECH IS THE WAY FORWARD
However, technology can be a game-changer in this regard. Recently, financial technology companies have emerged in Nigeria, offering innovative solutions to address the gap between the banked and unbanked. These companies leverage mobile technology to provide financial services to the unbanked, allowing them to make payments, save money, and access credit.
One such company is Vtpass, which provides a mobile wallet that allows users to pay bills, and buy airtime. These fintech companies are disrupting the traditional banking industry by providing convenient, accessible, and affordable financial services to the unbanked population.
To bridge the gap between the banked and unbanked in Nigeria, there needs to be a concerted effort by the government, and fintech companies. The government can play a role by creating an enabling environment for fintech companies to operate. Further assistance could include providing regulatory oversight, and promoting financial education. Financial institutions can partner with fintech companies to offer digital financial services and expand their reach to the unbanked population.
In conclusion, the recent cash scarcity in Nigeria has highlighted the urgent need for bridging the gap between the banked and unbanked population. With the right partnerships and support from the government, fintech companies can help Nigeria move towards a more financially inclusive society where everyone has access to formal financial services.
Vtpass, as a fintech is ensuring that bills payment is simple, convenient and smart. Click here to pay electricity bills, recharge your cable TV, and buy educational pins.