One of the initiatives unveiled by Central Bank of Nigeria (CBN) Governor Olayemi Cardoso on assumption of office in 2023 is the digitalisation of processes and other means of transactions in the Nigerian financial sector. He must have noticed how government businesses were still being done manually even as private organisations continue to integrate technology in carrying out their services.
To set the ball rolling in this regard, Cardoso recently unveiled two digital solutions to reduce the use of paperwork and physical cash it carrying out government transactions. The two solutions are the Document Flow (DocFLow) system and Naira Payment Solution for Ministries, Departments and Agencies (MDAs).
During the launching of the two solutions (both were developed in-house) in Abuja, Cardoso said the DocFlow system would revolutionise the apex bank’s document management by digitising paperwork, reducing paper usage, and streamlining the approval process. The MDAs naira payment solution, on the other hand, is a vital tool for automating cash withdrawal processes for MDAs, which will surely reduce work time and improve transparency.
As Omoyemen Jide-Samuel, acting director of the CBN’s information technology department, explained, the MDAs naira payment solution has been successfully tested with several MDAs and aligns with the bank’s goal of “Excellence in Central Banking Operations”, adding that the initiative is projected to “improve payment turnaround time by 70 percent and further enhance Nigeria’s financial ecosystem”.
This is no doubt a commendable step. All around the world, modern technological solutions are replacing traditional payment methods at an unprecedented rate. Institutions can unlock many benefits, including streamlined processes, reduced costs, and enhanced customer experiences using technology. In many countries today, paper has completely been eliminated in payment infrastructure. Using only their mobile phones, many no longer need any form of physical documentation to perform financial transaction. More modern technologies such as artificial intelligence (AI) and blockchain have also been integrated.
Nigeria, as Africa’s biggest economy, cannot afford to remain behind. There is need therefore for the government to support the CBN in this laudable initiative. The rate at which we still subject government businesses to manual processes is not sustainable, especially in this digital era. Many MDAs, for instance, still budget money for papers because internal communications still come in form of physical memos on notice boards.
As for cash transactions, many MDAs still keep money within their offices. And as a result of that, money is daily being diverted without trace. Indeed, the amount of money still in circulation outside of financial institutions in Nigeria is mind boggling, despite CBN’s effort to change the tide. The continued dominance of cash transactions cannot continue in a country battling to stop money laundering and other forms of financial crimes.
The effort of the CBN in deepening financial inclusion should also be supported. There also need to promote digital literacy because individuals and businesses with no – or limited – access to technology or digital literacy face difficulties in adopting digital payment solutions.
