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Driving Cashless Initiative in a Cash-based Economy



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  • Driving Cashless Initiative in a Cash-based Economy

The combined efforts of industry players in the financial and telecommunications sectors in driving the cashless initiative, are beginning to yield results, writes Emma Okonji

Although Nigeria is still regarded as a cash-based economy among comity of nations due to the volume of physical cash transactions carried out in the country on a daily basis, the cashless initiative introduced by the Central Bank of Nigeria in 2012, no doubt, is beginning to change the whole narrative.

More Nigerians are adopting the cashless drive that is fully supported by MasterCard, financial technology solution providers, banks the telecommunications operators.

The recently concluded Cashless Africa Expo, organised by MobileMoneyAfrica, which held in Lagos , where MasterCard was the headline sponsor, among other sponsors, highlighted the adoption growth rate of cashless initiative in Nigeria and across Africa despite the love for physical cash.

Adoption Rate

The cashless initiative by the CBN, beginning with a pilot scheme in Lagos, which was later extended to five other states and the federal capital in 2013 before the commencement of a nationwide cashless policy across the remaining states of federation. Since then the adoption of cashless transactions has improved, according to participants at the Cashless Africa Expo 2017, which held in Lagos to appraise cashless initiative in Nigeria and other African countries.

The conference, however, noted that most of the transactions were done through Automated Teller Machines (ATM), which still shows the use of physical cash handling by Nigerians.

Speaking on the adoption rate of cashless in Nigeria, the Vice President and Area Business Head, West Africa at MasterCard, Omokehinde Adebanjo said: “The adoption rate of cashless in Nigeria is quite impressive and we have seen that growth rate in our partners that use our technology solution that drives cashless.”

“At the Cashless Africa Expo, we are talking about FinTech and the banks and their drive towards financial inclusion. Digital is the way to achieve financial inclusion and we have all partnered to achieve this. What we have achieved in midst of the challenges, shows that cashless adoption has improved in Nigeria,” she said.

She explained that Africa currently records 83 per cent of mobile penetration across African countries, adding that the target is for Africa to gain 100 per cent mobile penetration in financial inclusion.

“We are looking at 100 per cent penetration because the growth is enormous. It means that telcos need to expand their network to accommodate more people and they should have better data coverage.

The MasterCard Drive Towards Cashless

According to MasterCard, two things motivated their interest to support cashless initiative in Nigeria and across Africa.

“Nigeria is driving cashless and MasterCard is interested in further driving it by sharing our knowledge and providing technology solutions and initiative that will further drive cashless across Africa nations

Again, digital payment is also key to us because it will enable financial inclusion, hence our synergy with partners,” she said.

According to Adebanjo, Mastercard remains focused on working with partners to develop a cashless Nigeria, “and we are working globally to achieve the same goal of a world beyond cash.”

“In order for us to develop a digital economy, for all citizens, we need to all get behind the shift towards digital solutions. It is well documented that digital payments such as those made using a mobile device is ensuring that easier, faster and more secure payment solutions are easily accessible to everyone.”

Digital Disruption

Speaking on digital disruption as the main driver of financial inclusion, the Principal Associate, MobileMoneyAfrica, Mr. Emmanuel Okoegwale said digital disruption is changing how traditional banking services, payments, remittances are now offered in the digital economy. According to him, almost all sectors of financial services including payments, money transfers, banking and more, is being re-imagined by non-traditional providers and FinTechs, while the traditional incumbent providers are reinventing themselves very quickly to understand better the puzzle presented by the FinTech and how they can leverage on the digital movement.

He said the Cashless Africa Expo 2017 was designed not only to highlight the challenges and opportunities in the FinTech space in Africa, but to also provide knowledge and networking platform that would bring the African FinTech industry at par with its counterparts across Africa.

Technology Gap

Speaking on technology gap, Adebanjo said: “Yes there is a gap period but it can be bridged just like the case of Kenya. We rolled out an initiative across Africa, beginning from Kenya and it is a pilot programme that supports farmers to sell their products on a market platform where the buyer and seller meet. We started with Kenya because we have our research laboratory in Kenya. The initiative was fully embraced because there was a gap. So with mobile phone, buyers and sellers can meet at the online market place, and the initiative is between farmers in the rural areas and the buyers in the urban areas.

We have other initiatives in agricultural environment and retailers and we are working with a lot of partners including FinTech.”

She said no country of the world has gone completely cashless, even the United States, has 50 per cent cashless and 50 per cent cash.

However, she said in Nigeria we still carry cash, noting that there is improvement in cashless.

She said MasterCard has impacted so much on cashless and would continue to invest so much in cashless initiative to meet our global vision of a world beyond cash.

Encouraging Cashless

The Cashless African Expo encouraged Nigerians and Africans to resist the use of cash and embrace the cashless drive that CBN is currently pushing.

Panelists at the Cashless African Expo said more households in Africa own a mobile phone than they have access to electricity or clean water and that nearly 70 per cent of the poorest fifth of the population in developing countries own a mobile phone.

They said the power of mobile transcends demographics, economic disparity, and location. It has proven to be a crucial tool for driving financial inclusion on the most financially excluded continent.

According to the World Bank, only 34 per cent of adults in sub-Saharan Africa have bank accounts. To put that into perspective, the global average is almost double that.

MasterCard key strategic priorities for the past few years have been driving the African digital revolution with the aim of building financially included societies.

According to Adebanjo, rising trend on the content is that of governments which are increasingly going digital, and a greater share of government jobs in developing countries is ICT-intensive than in the private sector.

By 2014, all 193 United Nations member states had national websites: 101 enabled citizens to create personal online accounts, 73 to file income taxes, and 60 to register a business. Unfortunately, developing countries have invested more in automating back-office, than in services directed at citizens and business.

ICT and Cashless

The Cashless African Expo forum was of the view that ICT is helping communities, especially the women in those communities, to create, innovate, and improve their economic and social outcomes, and would want to continue building on this tradition of success.

The forum said while exponential technologies might be the driving force behind the digital revolution, it is Africa’s most important resource – its people, especially the younger generation – who will determine the direction it will take.

Africa’s biggest challenge over the next five years will be how it will reconcile the demands of its strident youth, and their take on how to shape the post-colonial continent, in the face of established and entrenched power structures.

Awareness Creation

In a bid to create further awareness on cashless, the E-Payment Providers Association of Nigeria (E-PPAN) said it is set to embark on a massive national awareness campaign on the cashless Nigeria Initiative, just as the CBN, re-introduced the cash processing fees on deposits and withdrawals.

The awareness campaign will cut across 30 states of the federation as the cash processing fees takes effect in different states of the country. From April 1, 2017, the cash processing fees will take effect in the existing cashless states which are: Lagos, Ogun, Kano, Abia, Anambra, Rivers and Abuja. While in Bauchi, Bayelsa, Delta, Enugu, Gombe, Imo, Kaduna, Ondo, Osun and Plateau states, it will take effect on the May 1, 2017.

Edo, Kastina, Niger, Oyo, Adamawa, Akwa-Ibom, Ebonyi, Taraba and Nasarawa will begin the implementation of the cash processing fees from August 1 2017, while the last states to implement the cash processing fees on October 1, 2917, will be Borno, Benue, Ekiti, Cross River, Kebbi, Kogi, Yobe, Sokoto and Zamfara State.

CBN in partnership with E-PPAN has deemed it imperative to continue to sensitise the populace on the many benefits of the cashless initiative, which include easier opportunities for Micro, Small and Medium Enterprises (MSMEs) to access funds; reduction of government leakages; increased security; accountability and transparency; reduce cost of providing financial services and gradual reduction in conventional bank charges among others.

As the cashless initiative spreads across the country and the cash processing fess is being implemented, E-PPAN said it will also visit more states such as Katsina, Oyo, Ebonyi, Ekiti, Kogi and Cross River states. E-PPAN will engage one-on-one market traders and their customers, artisans, trade associations, schools, traditional rulers and other key influencers. This is to make sure that everyone is aware and enlightened on the policy and its benefits for greater adoption of electronic payment channels.

The Executive Secretary/CEO of E-PPAN, Mrs. Onajite Regha, who made the disclosure, stressed that one of the main reasons for the awareness campaign, is to make people embrace the alternative payment to cash. She listed the alternative electronic payment system as: mobile phone for mobile payments or banking; the Point-of Sales Terminal (POS), for payment of goods and services and the internet for online purchases or internet banking, among others.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend




Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.


  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return



Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather




Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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