‘Nigeria is ripe for cashless economy’

By Udeme Clement

Mr. Charles Akinsete

Mr. Charles Akinsete is a financial analyst and the First Vice Chairman, Nigerian Association of Industrial Pharmacists (NAIP). He speaks, in this interview, on the Sovereign Wealth Fund (SWF) Bill just passed into law by the Senate and House of Representatives, the cash withdrawal policy of the Central Bank of Nigeria (CBN) and the need for the Federal Government to revamp the industrial sector.

The Senate has approved N150billion for the take-off of the Sovereign Wealth Fund (SWF), following the passage of the Sovereign Investment Authority Bill. W/hat is your take on the development?

The approval of the fund by the Senate is a step in the right direction. The Federal Government is trying to save for the future, which is a good idea especially for a growing economy like ours. The fund is created for future development of the economy. It will replace the Excess Crude Account (ECA), which is in operation. I believe government would not necessarily tamper with this fund for any developmental project immediately, but rather it would be adequately utilised for future projects. As the population increases, so also there is need for infrastructure renewal to meet up with the needs of the increasing number of the citizens. We need expansion of roads, construction of new ones, affordable housing scheme, viable industries and relative full employment.

Crude oil is the major source through which we get wealth now and it is exhaustible, though nobody knows exactly the number years we would exhaust crude oil. We must learn from the recent global financial crisis which took everyone unawares. What happens if we wake up one day and there is no crude oil? So, government should plan for the future. This initiative shows that our government is coming home now to think globally and act locally to move the country forward.

Considering the Nigerian factor that is common in our business environment, do you see this fund being used for its intended purpose?

Yes, the money would be used for future development. The reality is that Nigerians are beginning to come up with great interest in the affairs of their country. The recent example is the just concluded general elections. Nobody knew that we could have a free and fair election in this country considering what happened in 2007. If we could get the April polls right, it means there is nothing we cannot achieve. In the next four years, things would not be the same again in Nigeria, Nigerians have already set agenda for Dr. Goodluck Jonathan, the President-elect to fix the power sector and development infrastructure in order to stimulate economic growth holistically. In the next four years, the power sector would be the key performance indicator for the next election.

Jonathan has promised to deliver on power and Nigerians would hold him accountable for it. Government now is no longer business as usual. If top politicians could lose elections in their comfort zones, it means Nigerians are fully enlightened on their rights. Our eyes are fully opened and would only get wider. In some years to come, we may not need the Economic and Financial Crimes Commission (EFCC) to fight corruption because Nigerians would stand up and fight corrupt leaders. After the approval of this SWF, the next one is the Freedom of Information (FOI) Bill. The interesting thing is that the Senate has declared that if the bill is not passed before the end of the legislative tenure, the process for the passage would not take a fresh start, but would simply continue from where it stops.

The House of Representatives has called on the Federal Government to stop the CBN’s policy on cash withdrawal and deposits limit. What do you think?

The CBN’s policy on cash withdrawal is a fantastic idea because the policy aims at making Nigeria a cashless economy like what is obtainable in advanced economies. We have made Nigeria a cash economy, which has encouraged fraud and robbery. For instance, someone would travel from Lagos to Uyo with N5million for business transaction, which could easily be done on-line and the transfer of money from one account to another within a short time. The CBN’s policy, if fully implemented, would help to curb corruption, money laundering and fraud. It would make the use of cheques to be credible. People would not just issue cheques unless they have money in their accounts.

It would take away so much cash from the system. It would bring credibility to our money transfer system, respect to the banking system and it would make everyone fall in line by being a customer to the bank. People would always go to the banks because they would not see cash on large volumes to transfer from one person to another, or from one corporate entity to another. It is a great initiative and I commend the current management of the CBN for it.

The manufacturing sector is speedily going under with a lot of companies closing down, what would you advise government to do in order to revamp the sector?

First of all, what brought about the money crunch? If you check very well, the Central Bank of Nigeria (CBN) is trying to restructure the economy for greater growth. So, because of this commercial banks are not just giving out money any how.

At present, there is Small and Medium Enterprises (SMEs) fund, which entrepreneurs could easily access. CBN is telling banks to release this money which is lying idle in the banks to encourage more investments to open up the economy for optimum growth.