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‘Nigeria’s GDP will get $88b boost with digital financial services’

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Central Bank of Nigeria's (CBN) governor Godwin Emefiele

Central Bank of Nigeria’s (CBN) governor Godwin Emefiele

With improved and consistent adoption of digital financial services in the country’s payment system, about $88 billion will be added to Nigeria’s Gross Domestic Product (GDP) by 2025.

The amount, which represents 12 per cent increase from its current contribution to the GDP would also bring substantial benefits to financial services providers and the economy, apart from boosting financial inclusion level.

The digital ststem refers to ways in which basic financial services- payments, savings, loan or insurance products are provided, particularly to the poor through mobile phones, the Internet and electronic cards/payment platforms.

Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, who stated this yesterday in Lagos said the development of the country’s payment system and reduction in the number of the excluded remains a top priority and can be seen in the cash-less economy initiative.

He said: “There will be increased productivity through the time and cost savings of businesses and financial services providers and reduced leakages in government expenditure; increased investment in physical capital through additional formal deposits and lending; and increased time savings of individuals.

“A recent study by the McKinsey Global Institute estimates that digital financial services can lead to the financial inclusion of up to 46 million individuals in Nigeria and up to 1.6 billion people globally by 2025.”

But according to the Deputy Director, Financial Services, The Bill and Melinda Gates Foundation, Kosta Peric, digital payment system, besides enthroning efficiency, will reduce corruption which is associated with cash payment.

As a philanthropy, he said the foundation has funded a financial inclusion secretariat at the CBN, providing grants to some banks to develop products that would deepen financial knowledge.

While noting that many people do not use financial products because they live far away from a physical financial access point such as bank branch, an insurance agent or ATM, he pointed out that digital financial services now transcend physical barriers.

“They can be availed through virtual channels such as mobile phones. Financial institutions have begun to leverage the mobile platform to open accounts and conduct transactions, enabling existing clients and previously excluded population to access financial services in a more convenient manner,” he said.



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