At the recent Africa Cashless Payment System Conference in Lagos, Soji Oni, the Controller of Technical at the Nigerian Insurers Association, highlighted the worrying low compliance rate with building insurance in Nigeria. He noted that this lack of coverage is leading to substantial economic losses, underscoring the need for reform in the sector. According to Oni, the Federal Government mandates that every public building must possess at least two types of insurance: occupier’s liability and a fire and special peril cover. However, the current compliance levels remain inadequate, which poses risks not only to individual stakeholders but also hampers the broader economic stability of the region. He emphasized that strict enforcement of these insurance requirements is critical to mitigate financial losses associated with the lack of coverage.
Aminu Maida, Vice Chairman of the Nigerian Communication Commission (NCC), also spoke at the conference, discussing the integral role of telecommunications infrastructure in nurturing a cashless economy in Nigeria. He pointed out that the infrastructure provided by telecom companies serves as the backbone for mobile financial services. Improved internet penetration through telecom services facilitates enhanced mobile money applications and online banking platforms, thereby making digital transactions more accessible and efficient. Maida indicated that the NCC is actively working to expand telecom infrastructure to create a conducive digital financial ecosystem that will enable widespread connectivity, which is essential for the operational efficiency of a cashless economy.
Highlighting the importance of reliable connectivity, Maida addressed the National Broadband Plan 2020-2025, aimed at increasing internet access in both urban and rural areas. This plan targets to provide download speeds of 25 megabits per second in urban locations and 10 megabits per second in rural areas while achieving a 90% coverage of the population and a 70% penetration rate. This initiative is crucial for supporting the goals of a cashless economy by ensuring that high-speed and dependable internet services are available nationwide. Furthermore, he pointed out the use of Unstructured Supplementary Service Data (USSD) codes, which facilitate access to mobile money services without needing internet connectivity—an essential feature for users in rural communities.
In her opening remarks, Oluyinka Fayomi, Chairman of Foreign Investment Network UK, spoke to the transformative potential that a cashless system holds for economic inclusion, particularly for populations historically marginalized from financial services. Fayomi highlighted that the Cashless Lagos Initiative has successfully increased digital transactions while simultaneously lowering costs associated with cash handling. This trend reflects a broader movement across Africa, where mobile money has seen significant growth, resulting in 548 million registered accounts. This surge is evidence of the continent’s readiness for digital transformation and signifies the substantial impact that a cashless system can have on economic growth and financial inclusion.
The discussion at the conference underscored that the synergy between insurance compliance and robust digital infrastructure is vital for the development of a stable economy. As Oni pointed out, the lack of insurance coverage leads to consequences that ripple through various sectors, highlighting an urgent need for awareness and regulation. Maida’s emphasis on telecom infrastructure aligns with this because reliable communication networks are necessary for the effective implementation of digital payments and, by extension, the sustainability of insurance services in the context of a cashless economy.
In conclusion, the interplay between building insurance compliance and a strong telecommunications framework is pivotal in catalyzing economic growth and ensuring financial stability in Nigeria. The insights shared at the conference illustrate the importance of regulatory enforcement in the insurance sector and the role of digital infrastructure in facilitating financial services. As stakeholders continue to explore the potential of cashless systems, the drive toward ensuring comprehensive insurance and enhancing connectivity remains paramount in building a resilient and inclusive economy.
