By NBF News

Sanusi Lamido Sanusi, the CBN Governoris a courageous man. His revolutionary approaches to the sanitization of our banking system have attracted wide comments from both within and outside Nigeria.

That probably explains his selection this year by the influential TimesMagazineas one of the 100 most influential people in the world. Sanusi is, therefore, an issue fornational and international discourse.

Perhaps, buoyed by these accolades, Sanusi  now rolled out another revolutionary policy to make Nigeria a cashless society. In its circular titled 'Industry Policy on Retail Cash Collection and Lodgment', the CBN directs that, 'commencing from June 1, 2012, a daily cumulative limit of N150,000.00 and N1, 000,000.00 on free cash withdrawals and lodgments by individuals and corpo rate customers respectively  shall be imposed'.

According to the CBN, the policy will initially be enforced in Lagos State, Federal Capital Territory (FCT), Port Harcourt, Kano and Aba, in the first instance, while it will be extended to other parts of the country at a date to be determined by the Bankers Committee. This  CBN  policy is intended to make Nigerians do away with their cash - and carry mentality and embrace cash card as their launch pad into a cashless society.

The measure is, therefore, part of policies designed to reduce the high usage of cash, moderate the cost of

cash management and encourage the use of electronic payment channels in view of increasing dominance of cash in the economy with its implication for cost of cash management to the banking industry, security and money laundering. Since rolling out this policy, it has been an avalanche of responses from the banking public. While some believe that the policy would go a long way in achieving the much desired cashless economy, others are of the opinion that Nigeria lacks the fundamentals for effective implementation of the policy.

Auniversity Don, Dr. Ishmael Ogboru, who is the Head of Department of Economics, University of Jos, said that, Nigeria, in his humble view, is not ripe for a cashless economy. He argues that we are still to a large extent, a faceless system, in which he implies that people's home addresses are difficult to locate or are even nontraceable. He also argues that, fraudsters in Nigeria are on the high side and  tracing/tracking them down has been a Herculean task to government and its agencies.  Ogboru contended that 'it's more of government officials who transfer (withdraw or deposit) large sums of money and that the use of cheques and credit cards are still not as acceptable as in the advanced economies'.

The erudite scholar finally concluded that our undeveloped rural economy as in the villages needed mass campaign of awareness by government and the banks before such a policy can be implemented.

For the Chairman/CEO of Shelter and Roads Construction Company Limited, Alhaji Mohammed J. Ahmed, the nation's economy is simply not ripe for the implementation of such policy. This is because according to him, the level of trust in the nation's business community is still very low to the extent that people hardly accept cheques for day-to-day business transactions.

It's  largely a cash-based economy, he further argues. Mohammed is of the opinion that our largely  illiterate society  with  limited  ICT access by majority of the citizens would not make the policy work in Nigeria. He finally concluded that, 'the policy would be a difficult proposition to sell to the uneducated in the rural areas of this vast country'

From the clergy, Mr. Gbenga Osinaike, the Chief Executive Officer (CEO) of Church Times Agency, publishers of Church Times Magazine says  'For a country that is largely cash- driven, the idea of cash withdrawal  and deposit limit is counter-productive. It's going to drive more people out of the banking environment and make people keep their money to themselves. I think the policy is premature' Dissecting the policy, some analysts described it as 'a sign of disconnect between those managing our monetary and banking policies and the realities of the lives of average Nigerian bank customers'.

They further argued that, 'the situation could lead to a plethora of deferred transactions (a situation where people have to wait for cheques to go through the clearing house before goods purchased are released to the buyer'. In such scenario, the economy will obviously die. Others cited  food sellers, the  produce markets, and the building materials sector etc. as some sectors that might limit the policy. These sectors thrive on cash dealings and the convenience it brings.

Surprisingly, some people believe the policy is timely and necessary if Nigeria is not to be left behind in the global financial transactions network. They, however, believe that, before such a policy can be successfully implemented, the  apex bank needs to understand the culture of the people and the sophistication of the economy. In this aspect, some analysts believe the policy may not work in isolation but may require other macro-economic policy support including infrastructure to be put in place.

I am of the opinion that the CBN's withdrawal limit policy proposal should be put on hold until the fundamentals are put in place before such a policy can be implemented. Hopefully, not a few stakeholders have shared this sentiment. For instance, it was reported in some news media that 'members of the House of Representatives recently moved against the policy, while directing the Federal Government to ask the apex bank to shelve the idea  since the country is not ready for such a policy yet'.

We know that Sanusi Lamido Sanusi, the CBN  governor is a courageous man, and that it's a sign of courage for one to admit one's wrong steps . The timing of the implementation of  CBN's cashless policy is wrong. Nigerians are saying we are not ready for that now. It should be withdrawn immediately.