Central Bank of Nigeria Governor Godwin Emefiele on Saturday said the digital economy was crucial in the efforts by the federal government to drive growth over the next few years.
Emefiele stated that as the pace of technological adoption increased, government and the private sector must find ways to leverage the digital channels to improve access to finance and credit for all Nigerians.
Emefiele spoke at the opening of the 30th CBN seminar for finance correspondents and business editors, themed, “Leveraging Digital Economy to Drive Growth, Job Creation and Sustainable Development in the Midst of a Global Pandemic,” which held simultaneously in Abuja and Lagos.
The CBN governor said the bank had disbursed a total of N149.21 billion to 316,869 beneficiaries through the NIRSAL Microfinance Bank, in a move to alleviate the plight of households and business owners and drive economic growth during the COVID-19 pandemic. The disbursement was part of the N150 billion Targeted Credit Facility (TCF) for affected poor households and small and medium enterprises.
Emefiele said the country needed robust digital platforms to boost the economic prosperity of the citizens.
Represented by Deputy Governor, Corporate Services Directorate, CBN, Mr. Edward Adamu, Emefiele observed that one of the strongest advantages of technology was its ability to compress time and space and reduce the world to a global village by providing connectivity at the click of a button to anyone anywhere in the world. He said to further drive growth, Nigeria needed to build a solid digital economy, by focusing on the improvement of digital infrastructure, most importantly, Internet connectivity, digital literacy and skills, digital financial services, digital platforms, and digital entrepreneurship.
The CBN governor said as the biggest economy in Africa with one of the largest youth populations in the world, Nigeria was well positioned to develop a strong digital economy. He stressed the need to focus on accelerating improvements across the five fundamental pillars of the digital economy: digital infrastructure, digital platforms, digital financial services, digital entrepreneurship, and digital skills.
According to Emefiele, “In our effort to drive change and development, the CBN has over the last decade and half worked to build an effective and efficient payment system.
“The Payment System Vision 2020 strategy document was published in 2007 and the main objective of the strategy was to promote and entrench electronic payments, as the major channel for payment and settlement by all economic agents, away from the current dominance of cash-based transactions.”
He said the robust regulatory framework put in place by the bank opened up the payment system to innovation with several new players across Payment Service Banks, Payment Terminal Service Providers (PTSP’s), Payment Solution Service Providers (PSSP’s), Mobile Money Operators (MMO’s), Payment Terminal Application Developers (PTSA’s), and agent banking.
Emefiele pointed out that a combination of these payment initiatives had helped to create employment opportunities and further the bank’s effort to build a more financially inclusive economy.
“Today, an SME in Ibadan is able to leverage digital channels to sell their products and services to a wider market beyond their immediate environment,” he stated.
He assured that the CBN regulatory sandbox was available for fintech companies to explore the use of blockchain technology in areas that would be beneficial to the Nigerian economy.
Emefiele said, “Given the resounding success of this programme and its positive impact on output growth, we have decided to double this fund to about N300 billion, in order to accommodate many more beneficiaries and boost consumer expenditure, which should positively stimulate the economy.
“In line with the growing need to go digital, the application process is done online and requires limited paperwork from prospective applicants.”
He added, “The bank continues to improve our remittance infrastructure in order to provide Nigerians in the diaspora with cheaper, convenient and faster channels for remitting funds to beneficiaries in Nigeria.
“In a bid to reduce the cost of remitting funds to Nigeria, the Central Bank of Nigeria on March 8, 2021 introduced a refund of N5 for every $1 of fund remitted into the country through IMTOs licensed by the CBN. We believe this measure would help to support improved foreign exchange inflows and enable Nigerians in the diaspora to use more formal channels relative to informal channels.”
Emefiele explained that these measures were not new, as several countries had adopted similar processes to reduce the cost of remitting fund by their diaspora communities, and it led to surges in remittance inflows through formal channels. He said following the outbreak of COVID-19, the country was able to benefit from some of the measures put in place by the CBN to develop a robust interoperable payment system.
He said the presence of these digital channels, along with various mobile and web-based channels, helped to support households and the business continuity and remained critical in mitigating the negative effect of the pandemic on GDP growth in 2020.
Emefiele noted that as a result of the CBN interventions, the ICT sector grew by 14.7 per cent in 2020, relative to 10.16 per cent in 2019.
James Emejo in Abuja and Nume Ekeghe in Lagos
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