Rwanda aims to go cashless to cut graft
KIGALI: Rwanda has announced a campaign that seeks to promote digital transactions, payments and savings to achieve a cashless economy.
It is massively promoting a paperless society whereby in the next few years every transaction in Rwanda could be digitised, thus effectively antiquating hard currency, John Rwangombwa, governor of the National Bank of Rwanda (BNR), said at the launch of the electronic payment awareness campaign in the capital Kigali. Rwangombwa said a cashless Rwanda would enable cost saving and increase resources in financial institutions to allow for cheaper loans and more investments.
The one-month drive will go across the whole country under the theme “accelerating the move towards a Cashless Rwanda through Public-Private Partnerships”.
“Cashless Rwanda will increase productivity, improve the velocity of money and bring more money into the formal economy. This attracts more business activity, generates employment opportunities, and subsequently increase higher tax revenues for the country,” he said.
The Rwandan central bank spends about 2 billion Rwandan francs (R32.83 million) annually as printing cost of banknotes and coins for the country, adding that the bank also incurs around $17.5 million every year related to cash handling, counting, processing and transporting. The lifespan of a bank note in Rwanda is around four months against an average of eight months with a higher level of cashless means.
The central bank said the introduction of higher denomination banknote of 10 000 Rwandan francs (about $11.7) would have been necessary if the government had not chosen to become a cashless economy. Currently the highest denomination banknote is 5 000 Rwandan francs.
Rwandan Minister of ICT Jean Philbert Nsengimana said a cahless society will boost access to services, enhance connectivity and create business and employment opportunities. Digital banking can also reduce transaction costs, cut corruption and help increase tax receipts with increased documentation and transparency.