CBN urges Abia to leverage on cashless policy to grow IGR
The Abia State Government had been urged to take advantage of the cashless policy of the Central Bank of Nigeria (CBN) to grow the value of its Internally Generated Revenue.
Speaking during an interactive session on the cashless policy initiative at the Government House, Umuahia, the CBN Governor, Mallam Sanusi Lamido Sanusi, urged the state government to follow the Lagos and Ogun States examples to improve on its internally generated revenue base.
Represented by the Deputy Governor Operations, Mr. Tunde Lemo, Sanusi
stated that the objective of the cashless initiative was to enable Nigeria to rapidly move closer to achieving the goal of becoming one of the largest economies in the world by the year 2020.
He revealed that a study carried out by the CBN during the last banking sector crisis showed that many got into trouble as a result of their high cost profile and that cash management was identified as one of the major areas that led to high cost of doing business in banks.
“it was also discovered that countries with lower cash-to- GDP ratio achieved higher GDP growth rate, citing that while Indonesia had 4.5% cash in circulation to the GDP, and South Africa had 2% cash in circulation to the GDP, Nigeria’s position was 41% cash in circulation to the GDP, which was very high.
“the CBN and the commercial banks spent about N114.5billion in 2009 on cash management related activities and processes, noting that the figure was envisaged to be over N200billion mark by the year 2012 or 2013. This shows that Nigeria spends so much in cash management” he said.
He stated that it was as a result of this that the CBN being the custodian of the Nigerian payment system and in support of the extant Money laundering Act the CBN is leading the campaign to migrate from the present cash-based to cashless transactions policy with alternative electronic based payment system.