The Central Bank of Nigeria stated that the electronic collection option of revenues for the federal and state governments will certainly reduce the cost of handling cash.
The Director, Banking and Payment Systems, CBN, Mr. Dipo Fatokun explained during a sensitisation workshop on e-collection organised by the central bank in Lagos that the initiative will reduce risk of cash-related crimes and that the benefits derivable from the increased utilisation of e-payment channels cut across all spheres.
He said the system would enhance profit and income line, reduced risk of cash-related attacks, and reduced cost of operations of banks.
Speaking further he noted that Corporations would benefit through faster access to capital, reduced revenue leakage, and reduced cash handling cost.
He said, “Consumers will enjoy increased convenience, cheaper access to banking services and access to credit, reduced overall cost of handling cash, and reduced risk of cash related crimes; while governments will enjoy firmer grip on monetary policy and its attendant effects on inflation and economic stability, among other things.”
The CBN director gave the examples of the success stories of e-collection as experienced by some state governments, saying “the Lagos State Government introduced the Lagos State Government Electronic Banking System of Revenue Cycle Management with the Direct Bank Lodgment System of the revenue collection process in 2002; Internally Generated Revenue grew annually at an average of six per cent; after the pilot of the cashless policy in 2012, IGR grew by 10 per cent.”
He further noted that the Ogun State Government had also introduced a cashless pilot scheme in 11 state-owned tertiary institutions in response to revenue leakages.
“At the end of first quarter in 2012, the government reported revenues of N2.5bn which is 195 per cent increase from reported revenue in quarter one of 2011 without an increase in fees,” he added.
The Deputy Director, Revenue and Investment, Office of the Accountant-General of the Federation, Mr. Jarad Sosarumso, emphasised the need to plug loopholes in the federal government revenue collection system.
Outlining the reasons for the e-collection, Jarad said it would plug loopholes in the federal government’s revenue collection system, enthrone a new regime of transparent and accountable IGR management, improve available funds for funding developmental programmes, ease the burden of revenue payers and make government contracts more accessible to the people.