What the End of Cash Would Mean for Informal Nigeria
The Central Bank of Nigeria dreams of a cashless economy. Economists celebrate every decline in cash transactions as a sign of modernisation. But before we celebrate the end of cas...
The Central Bank of Nigeria dreams of a cashless economy. Economists celebrate every decline in cash transactions as a sign of modernisation. But before we celebrate the end of cash, we should ask what happens to the 65 percent of Nigerians whose economic lives are conducted entirely in cash.
The informal economy is not a transitional phase on the way to modernity. For hundreds of millions of Africans, it is the permanent structure of economic life. It is not going away because a regulator changes policy or because a fintech unicorn gets a new funding round.
A genuinely inclusive financial system would start by asking what the informal economy needs, rather than announcing what it should become. It would design payment solutions that work without smartphones, without internet, without electricity.
Cashlessness imposed on an unready population does not produce financial inclusion. It produces financial exclusion with extra steps.
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