Economic Issues
Mankind, Money, Modern Banking Services, And How Not To “Bungle” The ‘Strive’ For A Cashless, Nigerian Society… -By Patrick Adaofuoyi Ogbe
Before the advent of money-paper money, especially-among mankind, other things which people existing in the world were using for trade, buying and selling, assets and properties acquisition, also included valuable objects such as gold, silver, bronze, copper,
No one can say-precisely-when human life began on earth, and when humans on earth began to increase in numbers of tens, hundreds, and thousands, and eventually, into what is ‘today’ a global, world population that is a number in the range of slightly above 8 billion people world-wide. However, one fact that remains –arguably-true pertaining mankind, is this: From the time and era when human life began to exist on this planet, thousands of years ago; at the inception when mankind began to engage in one type of trade, or business, and acts of buying and selling; the need for money-or one acceptable form of legal tender-for buying and selling purposes, cropped up. Seemingly, before money became an existent, reality among mankind; acts of buying and selling-among mankind, existed in a “process” that was known, or referred to as, ‘Trade by Barter’.
Money, is almost as old as recorded history of mankind, and the latter’s array of multiple activities on the planet. Prior the advent of (paper) money in the recorded history of mankind; primitive societies have used beads, precious stones, blankets, cattle, tobacco, hide and skins of animals, and shells of particular sea creatures, as money. In a similar vein, before the advent of money; quite a great percentage of mankind’s population-especially during the primitive era-used certain animals, and certain unique animal parts to transact business, and to also make payments for goods and services. This is true in scenarios, in time past, when individuals living on earth then, used animal parts, such as elephant tusks, rhino horns, peacock feathers, oysters’ shells and pearls, hides and skins of some animals, as well as the teeth of some ferocious, wild, jungle animals-as well as those of certain aquatic creatures, to acquire assets of estimable value, make payments, marry wives-or pay dowries for women of their choices, and in some instances, make appeasements to aggrieved individuals, or neighbors. Also, things of value-such as-silk, fine linen, sheep wools, cotton, wheat, grains of food, as well as arms and ammunitions, gun powder etcetera, all served as mediums of making payments, and transacting business. While none of the afore-mentioned, was ideal; they all served as money-as long as it was universally acceptable. {For instance, during World War 2; cigarettes were used as money in prisoner-of-war-camps}.
Basically, money can be said to be “…a commodity accepted by general consent as a medium of economic exchange. The medium in which prices and values are expressed, money circulates from person to person, and (from) country to country, thus facilitating trade, and it is the principal measure of wealth. The basic function of money is to enable buying to be separated from selling. If a person has something to sell, and wants something else in return; it is not necessary to find someone-able and willing-to make the desired exchange of items, as long as money is available to facilitate the transaction before the seller and the buyer.
Money, from another angle of definition, can be said to be “…the fruit of one’s labor. It-money-basically, performs four functions. One-it performs the function of, ‘a medium of exchange. Two-it serves as a measure of standard of value. Three-money serves the function of ‘…store of value’, and then, Four, money serves the purpose of ‘…standard of deferred payment’.
Also, money, can be said to be anything that is generally and universally accepted for the payment of goods, services, or debts. It consists of coins, paper money, or currency notes-of different denominations, and can also include (bank) cheques that are convertible into currency and coins on demand. These three items expedite the production and trade of goods and services, and they liquidate debt. If it were not for money, all goods and services would have to be traded directly for other goods, and services, a cumbersome system known as barter, (that is, trade by barter).
Glaringly, the practice of ‘Trade by Barter’ among mankind, a very long time ago, before the advent of paper money, as a way of buying and selling, apparently, had many existent, and noticeable dis-advantages. Prime among the dis-advantages, concomitant with the practice of ‘Trade by Barter’-as a way of carrying out trade, business, buying and selling-in ancient times-was the fact that, it was a very cumbersome way of transacting commercial activities. Apparently, this was where the need for money-as a cogent, and much more convenient medium of exchange of goods and services, among mankind, dawned.
The contemporary world uses paper money-and a little bit of coins, as modern legal tender. In the entire world, currently, there are close to 200 countries and nations in the whole wide world. Worthy of note is the fact that each, or nearly all these said nations in the world, have their unique, distinct paper money, with peculiar names for the various independent nations that abound in the world today. For instance, the three most popular currency notes in the world today, (arguably), is the British Pound, the Euro, and then the American Dollar. There is also the Swiss franc. A few other countries today in contemporary times, with the unique names of their nation’s money, include: Russia-Ruble; South Africa-South African Rand; India-Rupee; Nigeria-Naira; Algeria-Dinar; China-Chinese Yuan; Japan-Japanese Yen; Brazil-Real, and Poland-Zloty, etcetera. Most west African nations use the Central African CFA Franc, as their common currency, and legal tender, in business transaction, and commercial trades, and payments.
Before the advent of money-paper money, especially-among mankind, other things which people existing in the world were using for trade, buying and selling, assets and properties acquisition, also included valuable objects such as gold, silver, bronze, copper,
zinc, iron, rare gems, and precious stones, etcetera. The latter also served as a basis for placing value or esteem on their recipients, custodians, or owners.
It is believed that the first paper money was printed by the Chinese in the early part of the 9th century A.D. Marco Polo, on his return from China in 1295, wrote about the paper money used by Kubla Khan. This money was a black, paper like substance made from the thin skin that lies beneath the bark of the mulberry tree.
In England, paper money developed in the 17th century, out of the activities of gold smiths, who provided a safe gold depository for merchants by issuing warehouse receipts for gold left with them. These receipts circulated as paper money. The gold smiths also issued receipts for gold in excess of the gold they had on hand and lent them out at interest-that is, they made loans….
In the contemporary world, in which we live today; nobody can afford to hate money. As we all know, money is so pivotal to human life and existence in the whole wide world, such that, in this world in which we now live in; if you don’t have money; your life is sure to be as “gall”. Because of the value that mankind places on money, and because of the fact that money requires protection of some sort from people that may want to steal hard-earned, or hard-acquired money from their original owners; the trend of ‘Banking, Banking Services, and other Related Financial Matters’, cropped up.
Arguably, nobody can say for sure, when banking commenced among mankind. From time immemorial, mankind, with its teeming population, have been engaging in un-ending commercial activities and businesses. Such commercial activities, often involve one form of payment, or the other. This is the point where money-or something that is acceptable as a legal tender-came in. The real reason why any one cannot pin-point when banking commenced amongst mankind, is glaring.
In contemporary times, we may not want to come to grips with the fact, but probably; the first act of banking was implemented when, hundreds and thousands of years ago; a particular security-conscious and wary individual, took his treasures, and deposited it with another individual(or group of people) who were resident in a more protected enclave-for safe keeping-with the promise of squeezing out a fraction of such treasures to those protecting it, when the original owner has need of his treasure(s), and does come forward to take custody of his wealth.
Banking, for many, today, implies many things. However, quite a number of people are intimate with the fact that, “a bank is a business organization that receives and holds deposits of funds from others, makes loans or extends credit, and transfers funds by written order of depositors(in time past), and via cheque book/leaflets(in contemporary times). This term is occasionally, but in-accurately applied to commercial banks only, because of the peculiar types of services that commercial banks perform.
Evolving over a period of years, decades, and centuries; banks in every society, in the world, performs many important functions which in no small way, contribute to the development of each Nation’s economy, as well as make living easy for their customers, and numerous account holders. The primary function of each bank, is providing safety for customers’ money, and then secondarily, dispensing such money to customers on request.
Every profession, every sector, every trade and business, and indeed every activity, and human endeavor in the world passes through phases of periodical evolutions, technological advancements, developmental metamorphosis, and impressive innovations which are all aimed at making life more convenient and comfortable for (living) mankind. This is true of professions and fields of human endeavors like ‘Transportation’, ‘Medicine’, ‘Housing’, ‘Printing, and ‘Book Publishing’, ‘Broadcasting’, ‘Movie Production’ as well as ‘Music Making’, and then of course, ‘Banking’.
Imagine that thousands of years ago, way back in the history of mankind, the only most feasible method of transportation from one place to the other, was via the means of using human legs to walk-or trek-from one point to another point. Then transportation-among mankind- started evolving gradually in ‘developmental leaps’. Initially, there was the use of domesticated, and tame animals like camels, donkeys, and then horses. Then came along inventions such as bicycles, motor-cycles, and then cars, and then aero planes, ships, yachts, submarines, and all the array of modern forms of mobility that are available to mankind today.
In a similar vein; the banking profession and field in Nigeria, has-over the years gone by,have had its own fair share of evolutions, innovations, and exciting metamorphosis. Imagine that way back in the history of banking in Nigeria, the well to do and wealthy in the country, deposited bags of coins, gold and silver, and copper-and other similar valuables-with particular financial institutions. Then such financial institutions, had to pass through the cumbersome chore, and long process of counting such coinsand valuables, registering them in a book, or ledger, and then issuing a commensurate receipt to the owner of such valuables. Then the banking field and the array of commercial banking services that such financial institutions offered, up-graded impressively, in tandem with modern banking innovations.
In the contemporary world; the banking profession has attained a unique dimension of sophistication and ease such that, currently, existent, operating banks can now relate, and inter-relate with their customers-and numerous account-holders-conveniently, through their mobile phones, lap-tops, desk-top computers, e-mails, I-pads, ATM machines, and of course via customers, personalized ATM cards, without physical contacts with such un-countable bank customers. Nigeria, over the years, has aligned herself to all the existent, modern day, banking innovations, and services.
Then came the era of banking innovations in Nigeria, like ‘transaction alerts, S.M.S. services’. Through this said banking service; any bank customer with a mobile phone, can be sent S.M.S alerts concerning transactions that have transpired on such a customer’s account, whether it is deposits, withdrawals, or credit alerts from a third party into a bank’s customer’s account.
Then came the advent of PoS banking services, which eventually, graced the Nigerian banking world. The PoS business made its mark into the Nigerian business world after the Central Bank of Nigeria CBN, implemented the agent banking system in year 2013. This created a new channel for financial services to reach bank consumers in under-banked and unbanked areas, regions and indeed, societies.
The advent of PoS banking services in Nigeria, apparently, opened the window for internet banking, as well as mobile banking, which, glaringly, is a much more sophisticated method of banking services available to bank account holders that abound in the country-and indeed, outside the country, but with bank accounts in the country. The era of bank apps, downloadable, at goggle apps stores-with such bank apps, expected to assist and enable bank customers to carry out seamless bank transactions, followed on the heels of the point of sale (PoS) banking services.
Then in contemporary Nigeria, between year 2022 to 2023, the Central Bank of Nigeria, under the authority of its incumbent Governor, Mr. Godwin Emefiele, began to push for a cashless economy, or rather cashless, monetary society in Nigeria. This was coming on the heels-mind you-of the Naira re-design policy, or initiative, where-by, the nation’s three most-highest currency note denomination notes of #200, #500, and #1000 were re-designed. This was done with the view of, eventually, phasing out its old equivalents in Nigeria.
Thereafter, after mopping a substantial amount of money back into the banking sector; Nigerians however began to experience cash scarcity, and cash crunch, ubiquitously in the country. Banks, everywhere in the country, began to streamline-drastically-the amount of money, or cash, that customers can withdraw-over the counter, from their individual bank accounts. In many disheartening instances, there just wasn’t available cash to pay to bank customers that were requesting for such. ATM machines were not dispensing cash to bank account holders that had cash in such accounts, and that were ‘armed’ with their ATM debit cards, because such ATM machines, were starved of cash, or rather currency notes. Bank customers, that wanted to pay debts, transfer money to other people, or pay for one service, or the other, were advised to do so via digital means, or via existent, electronic platforms. Technically speaking; the “strive for a cashless economy, or cashless society”, had been ‘kick-started’, in earnest, in Nigeria. Actually, the “strive for a cashless Nigerian society, began in Nigeria, around 2013.
A particular African adage states that: “There is no way possible, that anyone can divorce fishes and water.” In the same vein; there is just no way that mankind’s daily commercial activities of buying and selling, payment for goods and services, and settlement of debts, etcetera, can be divorced-or separated-from physical cash transactions. I am not antagonistic of the “strive” for a cashless policy in Nigeria, mind you. Neither am I pessimistic that the policy-or initiative will not work or function in a country like Nigeria-with its daily, teeming population. What I am only trying to point out, is the fact that in the “strive” to have a society where-in cashless banking services, and cashless financial transactions, will become the order of the day; quite a number of things just have to be put in place, in order to effectively “coax” what will become a smooth, and seamless actualization of the policy into national and ubiquitous implementation in Nigeria.
In the “strive” however, to have a cashless Nigerian society, in order for the policy not to suffer setbacks, and in order not to have barrages of un-holistic service renditions, and subsequently, a league of frustrated, digital-banking, customers; I am of the opinion that a few ‘technical and scientific’ structures have to be in position first, before kick-starting the sought policy in earnest, or with frenzied determination, the way it is being enforced on Nigerians currently. In the bid not to bungle the “strive” for a cashless economy in Nigeria; I am of the opinion that all banks in Nigeria, first have to perfect certain of their electronic financial transactions platforms, before luring numerous bank customers, and many bank account holders to embrace cashless transactions, while spending their hard-earned money.
Also, another electronic structure that has to be on ground-solidly, before the Central Bank of Nigeria, can then enforce cashless money transactions on citizens, and indeed on residents living in Nigeria, has to be a ceaselessly, efficient, banking interswitch, broadband network, and collaborating independent, cash-payment platform operators, that are ubiquitously functional in the country to enable people engage in mobile banking, day and night, whenever, and wherever.
Then also, banks in the country, have to up-grade all their ATM machines, from time to time, and make sure that all such ATM machines that are in different spots in the country, are efficiently, functional. There’s barely anything as frustrating, or grievous as wanting to use your bank debit card to carry out an electronic transaction, and you get the disappointing response, “in-operative interswitch problem: please contact your bank for assistance.” In a similar vein, the interswitch network of all the PoS machines, ‘scattered’ through the entire nooks and crannies of Nigeria, should be-appropriately-functional, at all time. The interjected instances of ‘failed transactions’, ‘un-remitted debits to desired, destination accounts’, ‘un-reversed, accidental-debits, without dispensing cash’, ‘un-implemented, electronic cash transfers’, etcetera, are rife and concomitant with electronic banking in Nigeria, such that individuals using electronic, banking platforms, just have to be cautious, when and while using such electronic methods of effecting, cashless, money transactions.
In the contemporary Nigerian society in which we are living; there are existent service providers, in the Global Satellite Mobile (GSM) telecommunication profession. MTN, GLO, AIRTEL, 9-MOBILE, etcetera. Banks in Nigeria, have to learn from these said companies, or rather, service providers. The style, method, and efficiency with which the afore mentioned GSM companies render-seamless-services to teeming members of the public, ceaselessly, is a commendable, professional etiquette, that existing banks in Nigeria, will have to borrow a cue from, before “dragging” multitude of bank customers, as well as bank account holders in Nigeria, along the tortuous and “glaringly bungled” path of ‘going cashless’ in Nigeria.
If CBN-along with its electronic platforms, and indeed all the banks in Nigeria are not technically, and scientifically ready to handle the needs of numerous bank customers’ electronic banking needs; then I suggest that we revert back, hurriedly, to cash transactions in Nigeria.Citizens and indeed residents in this country, need cash, reasonable amount of cash, ubiquitously in the country, in order for the on-going “cash-scarcity-tribulation” in Nigeria, to abate a little, or end-out rightly.
At the tail end of March, 2023, after the 2023 general elections, incidentally, and during the year 2023, Ramadan Muslim fast, the Central Bank of Nigeria, released a substantial amount of cash into the economy, bringing some measure of relief to suffering Nigerians, This is a laudable initiative on the part of the nation’s Apex bank. However, what Nigerians, I belief want, is holistic healing, a holistic healing situation, where there will be cash everywhere, in Nigeria. Mankind cannot divorce money, from their daily commercial activities. Important as money is to mankind;what is the use of money, if its owner cannot touch it, spend it, or use it to buy desired goods, or pay for desired services when, and where, it’s owner desires? Nigerians, I feel, have suffered enough. (quod erat demonstrandum). Q.E.D.
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NAME: Ogbe, Patrick Adaofuoyi.
e-mail: patrickadaofuoyi@yahoo.com
