“I think the growth has been driven by the banks and the central bank. The central theme that started it all at that time was about reducing costs,” Ade Shonubi, CEO of the Nigeria Inter-Bank Settlement System (NIBSS) told CNBC Africa.
The cashless policy which was announced in 2011, aimed at reducing the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach.
“If we could move people away from cash to a less cash environment which was electronic in nature, it would make things more efficient for the banks. Their margins were under pressure on the revenue side, so they had to manage costs,”
According to Shonubi, people didn’t gravitate towards the policy out of force as the convenience of the system developed a life of its own that was attractive to people and therefore stimulating growth.
“Angola is doing about five times the volumes that we are doing on one-tenth of the size which means to be on par with them, we need to be doing 50 times what they are doing,” he explained.
Thus, while Nigeria still has a long way to go in comparison to Angola, the country achieved quite significant growth last year.
“In terms of the value of transactions, it’s still small compared to cash, cash is king. I think cash is still using 80 per cent of the exchange mechanism that is in place today,” he added.
Nonetheless, in Lagos, the commercial nerve centre of Nigeria, it is quite prevalent as people in the city have the tools such as internet, bank accounts cards.