Revered economist and former Governor of the Reserve Bank of Malawi (RBM), Charles Chuka, says inconsistent power in Malawi, high internet and mobile phone costs and lack of regular incomes and bank accounts among many people, are some of the factors impinging on the country’s possible move to a cashless economy.
Chuka, a seemingly staunch proponent of a cashless economy in Malawi, spoke Thursday evening in the Capital Lilongwe during an open lecture organized by UNICAF University and was titled; A cashless economy: is Africa and Malawi society ready for it?
A cashless economy is the one in which the majority of people do not use cash to pay for goods and services they are buying, instead, they use debit cards, credit cards, point of sell devices and mobile money services.
Chuka said Malawi, with a cash usage hovering at 90%, has the potential to enventually become a cashless economy in the distant future because the country has already in place a fairly advanced system which connects all banks and mobile phones to enable people access money through Auto Teller Machines (ATMs) and send money from bank accounts to mobile accounts.
“We just need to ensure that there is access to power, phones and internet connectivity. We also need to sort out our incomes by ensuring that more people move into jobs so that they earn money and open more bank accounts.
“Farmers need to have regular incomes so that they become part of the system which is moving to most efficient and safer instruments of payment,” Chuka told patrons to the lecture.
According to the former RBM Governor, cash usage in most countries that are cashless economies is at 29%, meaning that people in such countries use electronic means of payment in almost every transaction.
He said Malawi would see so many benefits if it adopts the system.
“By moving to cashless, tax collection in Malawi is likely to be much more than it is now. Cash allows many people to run away from taxes and do money laundering because you cannot trace the transactions. And a lot of illegal activities are financed by cash,” said Chuka.
He added that carrying money is dangerous because one could be marked for an attack, the cash could get stolen and get burnt.
“If anything, cash may just be used for small payments. As much as cash is good, certain sizes of transactions are really not good to use cash. You wish you could use a cheque, point of sell device, credit card or debit card.
“These systems of payment are really good because they are very efficient, easy to use and anyone who has a phone can use them. Imagine if all Malawians had phones. It means they do not have to carry cash to buy goods and services. They just need to pay through mobile money services or point of sell device and that money goes direct to the seller’s account,” said Chuka.
According to UNICAF University Vice Chancellor Professor Joseph Kuthemba Mwale, the lecture was organised to enable the student community at the university and other stakeholders to appreciate and understand the cashless economy topic.Follow and Subscribe Nyasa TV :