LILONGWE-(MaraviPost)-The country’s former central bank, Reserve Bank of Malawi (RBM) Charles Chuka says the nation should embrace cashless economy.
Chuka observed that Cash allows many people to run away from taxes and do money laundering because the authority cannot trace the transactions.
He added that a lot of illegal activities are financed by cash.
Chuka was on Thursday evening speaking to the public lecture which UNICAF University at its campus in the capital Lilongwe, and titled; “A cashless economy: is Africa and Malawi society ready for it?’
The former governor observed that 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.
Chuka added that 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.
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.
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.
