The International Monetary Fund, IMF has said Nigeria could save between $5 billion (N1.525 trillion) and $9 billion (N2.745 trillion) if it migrates its payment system to digital from cash. In the fund’s estimates, the saving represents about 1.7 per cent of the nation’s gross domestic product (GDP).
IMF Managing Director, Christine Lagarde, who disclosed this in Addis Ababa, Ethiopia at the United Nations Economic Commission for Africa (UNECA), explained that its analysis had revealed that, by updating their payment systems to digital from cash, governments of developing countries could save about one per cent of GDP, which may even be higher in some parts of Africa.
According to Lagarde, “IMF analysis in our recently published book, ‘Digital Revolutions in Public Finance’, shows that across the developing world, countries could save around one percent of GDP by updating their government payment systems from cash to digital. In some places in Africa the potential is even higher.
“In Nigeria, for example, we estimate that a government move to digital payments could save between 5 to 9 billion U.S. dollars, or about 1.7 percent of GDP.”
The IMF chief executive believed when governments put technology into practice millions of people could be helped. “Think of Sierra Leone. During the Ebola outbreak, some emergency responders had to leave their patients for days to go and collect payments from a regional office. By introducing a mobile wallet system, the government was able to save lives and better allocate resources where they were needed the most.”
Similarly, Lagarde, who delivered an address, titled, ‘The Foundations of Technological Transformation in Africa’ at UNECA, also said the IMF projected 3.6 per cent growth for 2017 and 3.7 per cent for 2018 for Africa.
“Looking at the continent of Africa, the recovery is strengthening in many countries. Growth is expected to reach 2.9 per cent in 2017 and 3.5 per cent in 2018 and 2019.
“This topline number masks significant variations among countries. While nearly one-third of nations are growing at around 5 percent, others — particularly the commodity exporters — are seeing a slowdown due to lower commodity prices,” she explained.
Lagarde, however, added that, on a GDP per capita basis, 15 countries on the continent were expected to see a decline this year. This, she pointed out, encompassed about 40 per cent of the population,
Stating that, “There are concerns on the horizon as well, even as the sun is shining,” she believed, “Indeed, as I have been saying recently, it is when the sun is shining that we have to fix the roof.”
“One concern we see is a sharp increase in public debt, which has reached 50 percent of GDP in nearly half of sub-Saharan Africa’s countries. This is a big cloud on the horizon,” she added.