The Central Bank of Nigeria’s Cashless Policy in Nigeria: Benefits and Challenges

Abstract

The paper examines the cashless policy of the Central Bank of Nigeria (CBN) introduced in 2011, and on April 1,2012 it commenced operation in Lagos as a pilot project. The policy aims at shifting the Nigerian economy froma cash-based economy to a cashless one, with a view to among others, achieving the requirements of Nigeria’svision 20:20 20 development agenda; reducing the cost of banking services; and improving the effectiveness ofmonetary policy in managing inflation and driving economic growth. Given the policy’s objectives, the paperx-rays the associated benefits of the policy as well as the attendant challenges that may encumber the successfulachievement of the policy’s objectives. The paper therefore makes some suggestions that will make the policysucceed. They include: periodic review of the policy by the CBN to iron out grey areas; embarking on intensiveawareness campaign and sensitization of the citizenry by the CBN; putting adequate security mechanisms inplace to forestall fraudulent practices; making the public power supply work efficiently; and exempting cashlodgments and public holidays from cash management charges.

Keywords: Cashless Policy, Central Bank of Nigeria, Vision 20:20 20, Benefits, Challenges.