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Dissecting CBN’s Cashless Programme In A Cash-Oriented Society

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In 2012, when the Central Bank of Nigeria [CBN] introduced the cashless policy, the crux of the objectives was to encourage more electronic-based transactions for payments of goods, services, and transfers, etc.

Between 2012 and now, come one say if the policy has achieved these objectives? Has the CBN encouraged more electronic-based transactions for payments of goods, services and transfer? Is there an answer in the CBN’s e-collection platform, a solution that allows electronic collection of government fees, taxes and custom duties, which equally let government agencies exploit the full capabilities of the technology to transform its services to the public?

The digitization of collection process may have served the CBN as a means to achieve its cardinal objective, which is to engender a cashless environment.

According to Director, Banking and Payments System of the CBN, Dipo Fatokun in a report, the cashless policy drive development and modernization of CBN’s payment system in line with Nigeria’s vision 2020 goal of being amongst the top 20 economies by the year 2020.

The cashless policy, he concurred, is designed to reduce, “not eliminate the amount of physical cash” circulating in the economy, while encouraging more electronic-based transactions.

The CBN director agreed that the cashless policy has reduced the cost of banking services including cost of credit and drives financial inclusion by providing efficient transaction options and greater reach, and improves the effectiveness of monetary policy in managing inflation and driving economic growth.

However, has this policy driven financial inclusion, reduce high security and safety risks, facilitate the growth of e-commerce, foster transparency and curb corruption/leakages?

To answer these questions, let us dissect how the policy has affected banking, corporations, government and the banking public.

For the banks, again let us turn to Fatokun, the policy has enhanced profit and income line, reduced risk of cash related attacks, reconciliation and tracking of transactions and payments.

It has opened efficient and effective means of processing transactions on e-channels thereby reducing cost of operations such as cash handling and other associated cost of dealing with cash transactions.

For corporations, research shows that the policy has given the corporations faster access to needed capital, reduced revenue leakage and reduced cash handling cost.

With the myriads of e-channels installed, a corporation can easily make bulk payment across multiple banks in real time.

Added to that, accounts reconciliation, which is described as a “monster” by MD/CEO, PFS the company behind the cheque truncation regime, Yele Okeremi, is now being nip in the bud.

For bank consumers, the CBN cashless policy has increased convenience, cheaper access to (out-of-branch) banking services and access to credit.

This is debatable: my company approached a bank for an overdraft. The bank asked for collateral that is above the overdraft.

In short, the bank did not grant the over draft because our company did not produce the collateral. Case closed.

The policy, according to the CBN, has reduced over-all cost of handling cash and risk of cash related crimes.

This is accurate: Most bank customers have now adjusted to making payments using e-channels such as card, PoS, online and mobile banking as well as ATM for cash withdrawal.

Besides, bulk payment across multiple bank accounts is now possible. With a mobile app installed on my smart phone, I regularly make payments to friends and siblings without visiting the banking hall. Making payment with the PoS is catching on but it can be better.

Paying for good on e-commerce sites in Nigeria is now trending. Booking hotel room, buying air ticket is now a fad.       

For government, the policy has brought firmer grip on monetary policy and its attendant effects on inflation and economic stability, greater financial inclusion, increased economic development and transparent tax collection.

It has also increased internally generated revenue [IGR]. The success stories of increased IGR by some state governments such as Lagos would include the introduction of the Lagos State Government Electronic Banking system of Revenue Cycle Management (LASG EBS-RCM) with the Direct Bank Lodgment System (DBLS) of the revenue collection process in 2002.

IGR has grown annually at an average of 6%.

After the pilot of the cashless policy in 2012, IGR grew by 10%.

In Ogun State, which introduced a cashless pilot scheme in 11 state-owned tertiary institutions in response to revenue leakages, witnessed increase in revenues in 2012 to the tune of N2.5billion, which is 195% increase from reported revenues in first quarter of 2011 without an increase in fees.

However, to plug loopholes in the Federal Government revenue collection system and enthrone a new regime of transparent and accountable IGR management, the Office of Accountant General of the Federation [OAGF] has created Government Integrated Financial Management Information System [GIFMIS] in association with Remita, the asset of SystemSpecs, which is the CBN payment gateway.

This is done in collaboration with Deposit Money Banks (DMBs) and other electronic collection channels like cards, PoS, ATMs, mobile wallets.

This, too, is in line with the CBN e-payment policy.

With GIFMIS, all government payments are now routed to the CBN Payment Gateway for onward payment into beneficiary’s accounts.

This indicates that all 700 ministries, directorates and agencies [MDAs] are involved directly in this set up. Meanwhile, the Payment Gateway, hosted by Remita, is connected with the CBN T24 banking application and GIFMIS solution for an end-to-end automation of payment and collection processes of federal government.

The CBN policy has enthroned a new regime of transparency in the allocation of funds, as the budgets of all 700 MDAs is handed over to individual management, separate from that of the supervising ministry.

As it stands MDAs cannot spend beyond the approved budget. If you understand what operates in the MDAs environment, cash is king.

The CBN has successfully eliminated cash and enthroned e-collection and e-payment. Through this process, the government has already saved over N500 billion. One wonders who were the beneficiaries of this N500 billion?

Anyway, the journey is still far, the road tortuous. From the above, could one clearly say that the CBN has created a cashless environment in a cash-minded Nigeria?

Has the CBN encouraged more electronic-based transactions for payments of goods, services and funds transfer in Nigeria?

Rarzack Olaegbe works with eMaginations, with baise for electronic payments, based in Lagos


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E-Financial

Kuda Unveils New Wallet for Multiple Currencies

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As the first currency supported by the functionality, Kuda launched an update for its app that allows users to send, receive, hold, and convert USD directly.

Kuda Unveils New Wallet for Multiple Currencies

Babs Ogundeyi, MD, Kuda

The action comes in response to growing consumer demand for currency-neutral spending, savings, and income management.

As part of its expansion strategy, digital bank Kuda has introduced a multicurrency wallet to assist Africans who live, work, and travel internationally.

Users may keep, fund, and convert between five main currencies—the US dollar, British pound, euro, Nigerian naira, and Canadian dollar—all within a single wallet on the Kuda app with this application, which is still undergoing testing.

“The new wallet is designed to simplify the fragmented experience Africans face when managing money across different countries and currencies,” said Nosa Oyegun, senior vice president, Business Banking, Kuda, during a media parley in Lagos.

“People no longer reside in a single nation. Due to their global reach, Africans should be able to transfer their money with ease, Oyegun stated.

He claims that eligible customers outside of Nigeria may already access the wallet on Android smartphones, and an iOS deployment is planned.

He clarified that Kuda purposefully decided against developing a distinct wallet app.

Customers will be able to log in as normal, open foreign currency balances, convert money when needed, and send or spend money without switching platforms because it will be integrated into the core Kuda experience.

More than N100 billion entered Kuda accounts from LemFi in 2024 alone.

“This wallet is just our first step in acknowledging and supporting the fact that our customers are already living this cross-border reality,” Oyegun stated.

Kuda wants to give people a smooth financial tool that suits their lifestyle, not only currency exchange.

By removing the bottlenecks involved in the need to switch between various apps or financial services, the wallet will enable users from overseas to send money home, exchange currencies, and continue spending from the same account when they visit Nigeria.

Oyegun emphasized throughout the event that the wallet also takes client retention into account.

Kuda plans to keep helping people who move overseas as they adjust to life in other nations rather than losing them.

He further claimed that these users had not churned. “They simply switched nations. We wish to continue servicing them.

Kuda is now one of many African fintech companies developing products for cross-border use cases as a result of the move.

Oyegun pointed out that Kuda’s goal is to become a financial partner for Africans wherever they may be, going beyond simply exchanging currencies.

The bank’s growth trajectory is reflected in Kuda’s first-quarter 2025 performance, which was disclosed during the briefing. Customer confidence in the company’s digital-first strategy was strengthened when it recorded N453 billion in savings deposits and processed N8.4 trillion in total transaction volume.

With the new feature being introduced on the app, Kuda Microfinance Bank hopes to assist online business owners, freelancers, and remote workers who make money in USD with the recently added feature, which is currently undergoing testing.

Users can choose to accept USD payments directly or convert naira into USD using the Spend tab.

In the near future, GBP and EUR will be recognized as alternative currencies, according to the financial institution.

Additionally, in Nigeria, where inflation is severe, having USD on hand might be advantageous and convenient for people.

More Nigerians have recently begun to use digital platforms to improve the stability of their financial status.

For the majority of them, managing multiple currencies—whether via remote work, cryptocurrency, or international trade—has become the standard. Kuda Bank aims to meet these demands and grow its business to meet the demands of the market.

The financial institution’s continued dedication to providing solutions that give its users the best possible experience which is demonstrated by the multicurrency wallet feature.

Speaking about the project, Kuda representatives emphasized that the new wallet was created to make it easier for Africans to manage their money across various nations and currencies.

Customers can log in as normal, open foreign currency balances, convert funds, and spend or send money without switching platforms thanks to the integration of this feature within Kuda.

Along with currency conversion, Kuda plans to provide a financial tool that eliminates the need for users to switch between apps or financial services by enabling users from other countries to send money to Nigeria, convert currencies, and spend from the same account when they visit.


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E-Financial

Reps Investigate 25 Insurance Firms for Financial Infractions

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The House of Representatives has launched an investigation into 25 insurance companies over alleged financial infractions that have reportedly led to the loss of hundreds of billions of naira in government revenue.

Chairman of the House Sub-Committee on Capital Market and Institutions, Hon. Kwamoti Laori, made the disclosure on Monday during a meeting with representatives of the affected companies at the National Assembly Complex in Abuja.

Laori said the probe was prompted by petitions accusing the companies of violating statutory provisions in their operations, thereby shortchanging the federal government.

“This committee is saddled with the responsibility of addressing a petition based on infractions by these insurance companies regarding their operations and non-compliance with certain statutory provisions,” he said.

“These infractions have led to the federal government losing hundreds of billions of naira in revenue. That is why the companies were invited—to either confirm or refute the liabilities ascribed to them.”

According to the lawmaker, each of the 25 companies had been formally notified of their respective liabilities and summoned to explain their financial dealings.

“The essence of this engagement is to ensure that what is due to the federal government from these private entities is fully remitted,” Laori added.

He emphasized that it is within the constitutional mandate of the National Assembly to track government revenue and block leakages, particularly in sectors involving private sector collaboration.

The committee also frowned at some of the companies’ attempt to stall the investigation by resorting to legal action.

“Some of the companies have gone to court and served the House with court processes. It is now up to us and the House leadership to examine those court papers,” Laori said. “If the court action does not affect the core of our mandate, we will proceed. If it does, we’ll await the court’s decision.”

He criticized what he described as a strategy aimed at obstructing parliamentary oversight.

“Going to court appears to be a deliberate attempt to throw a spanner in the works of the National Assembly,” he stated.

Laori also expressed dissatisfaction with the failure of some company heads to appear in person, instead sending representatives who were unable to respond to critical questions.

“We have insisted that Chief Operating Officers (COOs) must appear in person. One of the COOs sent someone who couldn’t answer any of the allegations—this is unacceptable,” he said. “It is the same people that will later accuse the National Assembly of not doing its job.”

The committee chairman did not spare the industry’s regulator—the National Insurance Commission (NAICOM)—which he accused of negligence.

“NAICOM has a supervisory role, and if they were doing their job effectively, we wouldn’t be here conducting this investigation. They need to sit up,” Laori said.

 

Meanwhile, 17 of the companies currently in court sent a legal representative, Mr. Abimbola Kayode, to the hearing on Monday.

 


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E-Financial

Naira Slides Again, Hits ₦1,532.34/$ Despite CBN’s Dollar Push

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The naira closed the past week weaker than the previous one, as it depreciated by 0.14 per cent week-on-week to settle at 1,532.34/$ at the Nigerian Foreign Exchange Market.

This weakening came despite the naira rebounding to a four-month high on the first trading day to close at 1,518.88/$. After that, it weakened to 1,530.25/$, then lower to 1,533.11/$ before gaining some strength to close the week at 1,532.34/$ at the official market.

During the past week, the highest amount that the naira traded for was 1,538/$, and the lowest was 1,515/$ on the NFEM.

At the parallel market, the currency closed trading within the band of 1,535.00/$ and 1,544.00/$1.

Analysts have maintained that the intervention of the Central Bank of Nigeria and improvement in the foreign exchange liquidity were essential to stabilising the naira at the FX market.

Cowry Assets Management Limited, in its weekly market report, averred that the naira had recorded mixed trading across the markets as it appreciated slightly by 0.06 per cent week-on-week to close at 1,544.00/$1 at the parallel market while closing in the red zone at the official market.

“The divergent movements reflect ongoing supply-demand imbalances and the evolving FX liquidity landscape,” stated the analysts, who, however, maintained that the naira looks to record further gains as improved oil output and elevated prices drive higher dollar inflows, which could sustain the current pace of reserve accretion.

“The positive oil earnings outlook, combined with steady capital inflows, should offer continued support for the naira and enhance near-term FX market stability,” the report added.

Recent data from the Nigerian Upstream Petroleum Regulatory Commission shows that the average daily crude oil production (excluding condensates) rose by 3.6 per cent to 1.51 million barrels per day in June 2025 from 1.45 mbpd in May. This marks the first time in five months that Nigeria has met its OPEC production quota, reflecting improvements in operational efficiencies and security around key oil-producing assets.

AIICO Capital Limited, in its weekly report, noted that the CBN had intervened intermittently in the FX market in the past week.

It stated, “Dollar sales early and late in the week helped maintain relative stability. The naira closed at 1,532.34/$, down 13.6 bps w/w. Reserves rose by $422m to $37.85bn” as of Thursday from $37.43bn in the previous week.

It is expected that the naira will likely hold its current range amid better liquidity, while markets weigh potential FX impacts from the Monetary Policy Committee’s decision starting Monday (today).

Analysts are split on what the decision of the MPC should be regarding the benchmark. On one side, doves are calling for a modest rate cut, pointing to cooling inflation, a more stable naira, and signs of reform traction. On the other hand, hawks are warning that premature easing could undo all the gains of FX reforms and decelerating inflation, especially with food supply shocks and global risk still very much in the picture.

“For now, traders are positioning around the edges, but the real signal will come from the tone of the communique,” Comercio Partners asserted.


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