Going cashless in rebuilding North-East Nigeria

Emmanuel Okoegwale

For the first time in years, residents of the North East of Nigeria are enjoying relative peace, thanks to the renewed efforts of the Nigeria military in routing the Boko Haram, one of the world’s deadliest terror groups, from most of their strongholds in the region.

As the North-East transits to post insurgence era, rebuilding efforts is commencing gradually by the Nigerian government with billions of dollars pledged by the World Bank, United States, United Kingdom and many other international development partners.

The North east is historically one of the least educated and developed regions in Nigeria with very poor financial services infrastructure which were priority targets for the insurgents in the early stages of the bloody insurgency. The region is clearly without a functional, effective and efficient financial services system that can support the rebuilding efforts considering the sheer volume of intervention programs such as cash transfer programs, feeding programs, education grants, health, re-integration etc, covering extensive distances in the region with Bornu state alone estimated to cover over 70,000 km2!


The rebuilding efforts will create an entire new industry in the region covering diverse stakeholders like vendors, suppliers, beneficiaries, contractors, service providers to be paid using cash or exploring digital options to reduce or remove the inefficiencies that are usually associated with the use of cash.

Gaps in the use of cash in rebuilding efforts in North East, Nigeria:


Despite the fact that peace is gradually returning to the region, it will take years for complete mop-up operations, establish civil protection programs and institutions, achieve pre-conflict security level status and de-radicalize the insurgents.

It will take years of planning, implementation and sustained budgets to provide adequate security in the states. With cash based operations, cash security will have to be extended to extensive coverage of cities, towns, communities but with cashless operations, cash security may be limited to wholesale cash movement while payouts are made in digital form.

Banking infrastructure

Banks branches were fixed targets for the insurgents in the early days and they suffered huge losses. Most Bank branches had been looted, burnt and destroyed during the attacks. Few bank branches operate skeletal services in some parts of the state capitals in the North east and do not venture out to the towns and rural communities as these are low-hanging targets for insurgents.

Rebuilding banks branch network within the affected states will take long to achieve without any state support. Expanding services into the hinterlands or unbanked communities will not be priority in the short term without compelling incentives.

Cost of cash

Cash movement, staffing cost and time required to disburse cash is significant in any given clime and much more expensive in an insurgency ravaged region. The inefficiencies that comes with use of cash is also high, due to the fact the beneficiaries travel long distances and  physically present themselves to collect cash at collection points with long waiting hours thereby costing them time that could be used for their businesses.

Cash disbursements are open to abuses and theft from the middlemen by charging beneficiaries higher fees, pilfer cash etc. Moving to digital payment eliminates these challenges and ensures direct payment mechanism to intended beneficiaries in full value.


Telecommunications infrastructure is in a very bad state across the region due to the fact that the insurgents destroyed and looted many of the base stations. The implication is that whatever digital options to be considered, availability of mobile network should be a factor in product designs, end-user technology, user of data services etc.

Identification protocol for beneficiaries should not necessarily be the Nationally acceptable National Identification card for Know-Your-customer purposes since most of the displaced people had lost most of their personal effects during the insurgency. A new identification that addresses their documentation requirements can be deployed and factored into the cash transfer programs of the governments and international development agencies.

As the Nigeria keeps pushing the frontiers of cashless transactions driven by the determination of the regulator, increased telecommunications networks and  adoption of mobile technology, uptake in the adoption of cards and e-commerce, will the North East of Nigeria leverage on the rebuilding efforts  to move away from cash and  leapfrog to digital payments? Only time will tell.

Emmanuel  Okoegwale

Principal Associate, MobileMoneyAfrica