An Economist, Dr Augustine Kutu, has advised the Federal Government, Central Bank of Nigeria (CBN), and policymakers to address concerns of Nigerians on the new charges on bank transactions.
Kutu, an Assistant Professor, University of Western Ontario-Canada, gave the advice in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja.
He noted that while citizens had expressed concerns that the policy reduces their purchasing power, imposes a financial burden, and discourages savings, banks argued that the charges were necessary to offset their operational expenses and stimulate the economy.
“As part of the monetary policy framework, CBN regulates bank charges and deductions, including those related to cash transactions and account maintenance.
“These charges vary across banks and are dependent on the specific type of transaction.’’
According to CBN, the reintroduction of the charges on certain cash deposits and withdrawals is to promote modern and efficient payment system.
“It aims to reduce the country’s reliance on cash transactions, which can be costly and hinder economic development,’’ the don said.
Kutu said it was obvious that the policy would discourage excessive cash handling, minimise operational costs, and encourage Nigerians to adopt alternative payment methods, such as digital transactions.
He said that the country’s current economic climate posed significant challenges to the policy’s effectiveness.
“Paramount among these challenges is security concerns, as electronic payment systems are vulnerable to cyber threats and data breaches.
“Additionally, unreliable infrastructure, including limited access to internet and power, hinders the wide spread adoption of digital payment methods.
“The low digital literacy, particularly in rural areas, and the recent approval of fifty per cent hike in telecom tariffs may continue to discourage Nigerians from embracing the new policy.
“To ensure the successful implementation and adoption of the policy, policymakers must first tackle pressing customer concerns, including the steady increase in telecom tariffs, cybercrime fears, and technical issues,’’ he said.
Kutu also advised the CBN to consider other measures like implementing a downward review of Automated Teller Machine (ATM) and (Point of Sales (POS) transaction service fees, as well as interbank charges to decrease financial burdens on customers.
“There should also be an increase in access to ATMs and POS terminals, particularly in rural areas, to promote financial inclusion,’’ he said.
Kutu also urged the development of Information and Communication Technology (ICT) infrastructure in rural areas to bridge the digital divide and facilitate access to digital financial services.
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