Headline : Africa: What Can Africa Learn From Nigerias Swift Adoption of Cashless Payment Systems?

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All around the world, governments are trying to encourage cashless payments. Their reasons for doing so are multiple, including expanded financial inclusion and transparency, wanting to formalise the informal economy, and to drive economic growth and innovation. Nigeria is no exception. By the end of 2022, the move towards a cashless policy as a means to eradicate cash was high on the government's agenda in Nigeria. In early 2023, a bid by the Central Bank of Nigeria (CBN) to introduce new banknotes and lower cash withdrawal amounts led to a serious shortage of cash .

Unfortunately, there were not enough new notes in circulation to serve the needs of a country that's historically been as heavily cash-dependent as Nigeria. While the initiative itself is a step in the right direction, there's no denying that it caused issues.

The economic effects were far from positive. According to S&P, amidst widespread protests, many Nigerians were left scrabbling for ways to pay for day-to-day goods and services. As a result, many people who'd never previously used digital payment services had little choice but to adopt them. Fintechs in particular stepped up to the plate, helping Nigerians meet a fundamental need at a time when their lives had been massively disrupted. A report from Nigeria's Inter-Bank Settlement System (NIBSS) found that there was a 125% increase in mobile payments during January compared with the same period in the previous year. Additionally, Bloomberg reports, the value of mobile-money transactions has jumped by a quarter to 2.5 trillion naira (US$5.4 billion).

As the shortages abate, it will be crucial that digital payment providers do not let the resulting move to digital payments go to waste. In a country with a long history of relying on cash as the primary means of payment as Nigeria, they will have to work hard to retain the customers they've gained in recent months and position themselves for continued accelerated growth.

Read more from the original article on here at allafrica.com.

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