Posted on August 28, 2020 13:12

As a result of the economic crisis created by the pandemic, almost 1.6 billion informal economy workers (representing the most vulnerable in the labour market), out of a worldwide total of two billion and a global workforce of 3.3 billion, have suffered massive damage to their capacity to earn a living. This is due to lockdown measures and/or because they work in the hardest-hit sectors.” – ILO Monitor: Covid-19 and the World of Work. 3rd Edition.

The New Normal

Following the introduction of the cashless policy by the Central Bank in 2012; the initiative was implemented to move Nigeria and Nigerians further to a Digital Age and to mop up cash in the economy. It was also encouraged in an effort to manage inflation. Since COVID, there has been a monumental increase in the adoption of digital payment methods, an estimate of which resulted in a 365 per cent increase in online activities. This increased drive has been spurred as a result of innovative financial technological solutions from Fintechs such as Flutterwave who is able to facilitate payments for businesses and encourage last-mile payments.  While this is remarkable, only sustained and prolonged usage can move the country close to the targeted financial inclusion goal of providing 60 million unbanked adults with formal financial services by year-end 2020.

Shut land borders and airspaces are gradually opening back up, and we have seen economic activities pick up after it all came to a pause due to the COVID-19 pandemic. It’s clear that survival is dependent on good health and a working economy. The cost of the restricted movements because of the global lockdown phases are still being tallied but the World Bank envisions a 5.2% decrease in global GDP with most countries expected to face a recession in 2020. That’s not hard to imagine, considering that at the end of the first half of April, 81% of the world’s workforce were affected by workplace closures, according to the United Nations. As expected, the impact is most severe in low-income countries that have more workers in the informal sector. Low middle-income countries such as Nigeria average more than 80% of the population in the informal sector. In a large city like Lagos, this sector comprises more than two-thirds of the working population.  In a recent World Bank country update which suggests that there could be a rise of vulnerable Nigerians by five million by the end of 2020. With a new globally-sanctioned lifestyle that emphasizes physical distancing to slow the virus’ infection rate and flatten the curve, where does this leave Nigeria? Nigeria’s inability to leverage digital technology systemically is not just a low-income people issue.


Nigeria’s inability to leverage digital technology systemically is not just a low-income people issue; it is one that cuts across all sectors; from education to agriculture, commerce and healthcare, and will take a while to change. For example, the Federal Government under its National Social Investment Programme Conditional carried out its Conditional Cash Transfer programme by physically distributing money to vulnerable households across states as a way of cushioning the effect of the pandemic. It would have been a good opportunity to leverage this exercise (which began in 2013) to deepen digital money adoption among the underserved.  A case in point is in Abuja, where although there are 5000 beneficiaries, only 190 people were reached in a day. This means there needs to be a systemic change starting from the top. It’s also important to note that while the current pandemic affects everyone, it has a disproportionate impact on the lower-income population, a segment that is already socio-economically marginalised.

A lot of micro-businesses are unable to move their businesses or payments online because they run cash in-cash out systems. This means they rely on the proceeds from daily sales to restock for the next day and to cater to their daily needs. They cannot afford the luxury of next day settlements, which is the current method employed in digital payments systems. 

We live in an increasingly interconnected world, thanks to the advancement of digital technology. Global communication is so much faster, cheaper, and more accessible. The same now applies to our finances, we can now easily make digital money transfer especially with Cofred, as it has designed its features to emerge as a method of digital money transfer or exchange.

With Cofred payment system and its Agents/Merchant, users can cash out digital money or cryptocurrency in cash and at the instant transaction. This is enabled by the exchange system in the Cofred platform. 

Read our article on instant currency exchange to easily transfer digital money.


Posted on August 28, 2020 13:12