Thursday, 2 February 2012

Nigeria kicks off its 'cashless Lagos' project

The Central Bank of Nigeria (CBN) has kicked off its much-talked about Cashless Lagos project, introducing limits on how much paper money can be withdrawn and imposing deposit restrictions in a bid to encourage the use of electronic and mobile payments. 

"[Cashless Lagos] is to leverage and augment a seamless cashless regime convenient for all classes, and to reduce corruption, increase foreign investors' confidence and to sustain a capital base", said Ben Ndedde, Partner at law firm Justice Forte in Lagos.

In a statement, the Central Bank of Nigeria said "it wants to drive development and modernization of our payment system in line with Nigeria's vision of being amongst the top 20 economies by the year 2020".

Ndedde thinks this should be possible: "Nigeria is very well exposed to internet services." However, he does foresee a number of issues: "Illiteracy levels are still quite high and fraudsters on the internet may pose a hacking threat by intercepting and wiring funds, as is the case globally. We are also saddled with incompetent security agencies incapable of tracking fraudulent transfers." 

Published in the January issue of EFPLP © 2012 CP Publishing Ltd, London, UK.