Cash-less economy, opportunity for local content development – Experts


Minister of Communications Technology, Mrs. Omobola Johnson and NCS President, Sir Demola Aladekomo

As the cash-less policy gains popularity  in Lagos, Information Technology experts see opportunities in local content development and urge the country not to miss them, writes DAYO OKETOLA

The cash-less  policy introduced by the Central Bank of Nigeria has continued to enjoy adoption across a wide spectrum of Nigerians, though the journey has been far from smooth. Lack of awareness, poor infrastructure, and PoS downtime are some of the indices showing that it is not yet okay with the cash-less scheme.

While it gathers steam, however, experts believe the cash-less initiative offers a great opportunity for indigenous IT companies to develop local content capacity and benefit from the initiative.

The Managing Director, SystemSpecs, Mr. John Obaro, said the ongoing drive to introduce cash-less economy represented a new dawn of opportunities for the Information and Communication Technology, banking, and education sectors, among others. Opportunities, according to him, are also abound for entrepreneurs as well as the economy as a whole.

Presenting a paper titled “Software in a Cash-less Economy: Catalyst for Innovation, Local Content Development and Job creation” at the Nigeria Computer Society’s 24th National Conference in Uyo, Akwa-Ibom State, Obaro said that how local operators would plug into the opportunities remained the major concern.

According to him, software offers the window for local operators to take advantage of the cash-less initiative, adding that software is needed for cash-less solutions.

The cash-less policy was introduced to engender the accomplishment of the Vision 2020 and modernise Nigeria’s payment system in line with international best practices. It is also aimed at reducing the cost of banking services, drive financial inclusion and reduce high security and safety risks.

According to the CBN, the cash-less initiative is aimed at reducing the high and increasing cost of cash estimated to reach N192bn in 2012.

The adoption and continued encouragement of the use of PoS terminals is considered a major step for the success of the cash-less projects and the CBN had set a road map for the deployment of over 400,000 PoS between now and 2015.

The CBN further said it would accelerate PoS density in the country to 2,247 per 100,000 people by the end of this year.

According to the CBN, the PoS density per 100,000 people in Nigeria is 13, while India’s is 67; Uganda, 453; Namibia, 338; Malaysia, 1,063; and South Africa, 1,063.

The target for Nigeria, according to the bank, is to meet Brazil’s PoS deployment rate of 2,247 per 100,000 people by 2015.

In view of this, Obaro decried that virtually all hardware, especially PoS terminals to be deployed under the cash-less policy were imported, while wondering how many of the mobile money applications were developed locally.

According to him, it is imperative for some of the PoS terminals as well as applications that will engender the cash-less initiative to be produced and developed locally.

He explained that the cash-less scheme would provide huge opportunities for indigenous ICT players to build a technology based support industry, adding that it would also provide the opportunities for sub-contracting to local IT firms instead of India and Ukraine companies, among others. The cash-less initiative, according to him, will also provide opportunities for partnerships among local organisations.

Above all, the SystemSpecs boss said the initiative would lead to GDP contributions and job creation with a ripple effect on the economy while boosting national pride and reducing exposure of national security in the area of espionage.

He reiterated that developing local content in the cash-less scheme would lead to business expansion and job opportunities with new entrepreneurs coming into the market. More mobile money companies will emerge while PoS marketers and installers have new opportunities to explore.

He said, “The move to cash-less society is good for software innovation, increased local content and job creation. Software innovation should focus on improved functionality, ease of use and interoperability. There is an imperative to increase local content in software and ensure that we develop the right skills mix in the jobs being created. The Nigerian IT industry should seize the current opportunities to transform itself into a global force.”

Agreeing with Obaro, a bank customer, Mr. Victor Aluko, said the country should consider tapping into the available opportunities by producing the PoS devices locally.

He said, “While we start up with ordering of the PoS devices, the vision should be for the government through CBN to get a formidable PoS manufacturer to put up an assembly plant in Nigeria so that on the long run, the device will be produced locally with some local contents.

“Millions of this device will eventually be needed. Bringing the plant in will generate employment and have a positive effect on the economy, and it will save us from the type of embarrassment we face in the case of the PHCN meter.”

The Minister of Communications Technology, Mrs. Omobola Johnson, had recently informed that the Federal Government was developing a local content policy for the Nigerian ICT industry, adding that it would be due for release in the fourth quarter of the year.

The minister also canvassed  increased local production of e-Payment and other smart cards in the country ahead of the card explosion expected to be stimulated by the CBN’s cash-less economic policy, among other factors.

The minister, who recalled that an average Nigerian carried about three cards, decried the situation where a significant part of the cards was produced outside the country.

As such, she said the local content policy of the Federal Government would enhance local manufacturing of payment cards as well as ICT development at large.

NCS President, Sir Demola Aladekomo, in his address, lauded the Federal Government and the CBN for embarking on the cash-less project and promised that NCS would continue to be a partner in progress on the country’s cash-less journey.

He said, “Indeed monetary issues now experience universal standards across geographical boundaries and foreign exchange regimes. In addition, it appears as if globalisation has brought in its trail, enormous challenges of unprecedented electronic fraud, robbery, gangsterism, terrorism and insecurity. These challenges, together with some other considerations, show the wisdom of a cash-less society anywhere and everywhere in the world.”

Aladekomo, who agreed that the cash-less system provided ample opportunities for local content development, said one of the intentions of his administration was, “to lay foundations to create one million ICT-related jobs in five years and also create the first 250,000 in the first two years.”

He also said the NCS would impact the nation by improving ICT service delivery, education and infrastructural development by continuing and improving on what ‘our forbearers have done.’

On the theme of the conference, the Chairman, Conferences Committee, NCS, Prof. Sola Aderounmu, said the theme was carefully chosen to evaluate the roles and strategies the IT industry would play in the reforms and changes in the financial, economic and social sectors in Nigeria.

Experts, who were present at the conference, emphasised the need to develop the necessary security and legislative frameworks to make  the cash-less policy successful.


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