Ronke Akinyemi, the Head of Global Markets at Parthian Partners, stated during a bi-monthly forum of the Finance Correspondents Association of Nigeria (FICAN) in Lagos that the new naira redesign policy would lead to an increase in digital banking, which in turn would improve tax inclusion and efficiency in Nigeria.
Ronke Akinyemi emphasized that the naira redesign and the cashless policy of the Central Bank of Nigeria (CBN) are expected to result in more money being moved from private hands into banking institutions. She expressed her belief that this will lead to an increase in remittances from government-owned enterprises and improved tax administration. If Nigeria eventually transitions to a cashless economy, the banks will have a clearer view of who owns what and it will become easier for tax authorities to track down tax evaders, as all the money will be in one place. Akinyemi also hoped that this would lead to an increase in oil output. This view was echoed by the governor of the CBN, Mr. Godwin Emefiele, who recently stated in a press conference in Lagos that the cashless policy will enhance tax collections.
According to Mr. Emefiele, the cashless policy will not only boost fiscal policy in the short term by forcing more economic agents to open bank accounts and increasing the formalization of business activities, but it will also enlarge the base of taxable activities, leading to more tax receipts for various levels of government. In the long term, the policy will improve the sophistication of tax collection, reduce tax evasion and avoidance, and support regulatory reform and coordinated fiscal and structural policies, as has been seen in other jurisdictions. He acknowledged that there may be some inconvenience in the short term, but emphasized that the advantages of the currency redesign are overwhelmingly enormous and will benefit the economy in the long run. He assured the public that the necessary steps will be taken to ensure a smooth flow of currency swaps.