The United Nations (UN) has challenged Nigeria and other developing countries to boost digital payments with the right policies, saying it could earn them $220 billion to $320 billion annually. According to a report by the UN Secretary-General’s Task Force on Digital Finance, governments must seize the opportunity created by the coronavirus pandemic to develop digital payments
The report titled: “People’s Money: Harnessing Digitalisation to Finance a Sustainable Future,” set out an ambitious, practical action agenda for governments. Centrally, it spells out how digital finance can be harnessed in ways that empower citizens as tax-payers and investors in envisaging a digital transformation at a scale that better aligns people’s money with their needs, collectively expressed by the Sustainable Development Goals (SDGs).
In the report, the task force noted that while the pandemic demonstrates the immediate benefits of digital finance, the disruptive potential of digitalisation in transforming finance was immense.
“Digital finance has become a critical lifeline during the crisis for billions of people. Innovations and investments have underpinned rapid scaling of support to vulnerable groups, from extending the reach of social safety nets and health systems to new ways to secure digital livelihoods and undertake mutual support within families and communities.
“This surge in the digital world amplifies the opportunity and the need for it to be harnessed in the longer-term pursuit, and financing, of sustainable development.
Success in building better beyond the crisis depends, however, on overcoming emerging digital risks of a deepening divide, a loss of privacy, and increased cyber risks, and market concentration,” the report read.
The report noted that this historic opportunity combined with the unprecedented crisis provided a unique moment and imperative for all countries to act in harnessing digitalisation to accelerate financing of the SDGs. “Failure to act would be a wasted opportunity and risk finance’s divergence from the needs of citizens for inclusive, sustainable development.
Acting with purpose and ambition, on the other hand, opens the possibility of overcoming barriers to securing financing for the SDGs, whilst mitigating risks associated with digitalisation of finance,” it stated. The report also highlighted the barriers to digital payment in developing countries to include gaps in digital infrastructure and skills, and backwardlooking or slow-moving policy and regulation.
“Skills gaps, social norms, and discrimination restrict women’s access to and use of mobile technology and digital finance. In addition, there are risks that, if unmitigated, could deepen the disconnect between finance and sustainable development.
Digitalisation opens new routes for breaches of identity data, embezzlement and fraud.38 It can intensify short-termism, undermining long-term value creation, and it may widen inequalities,” it said. Commenting on the report, Co- Chair of the UN Secretary-General’s Task Force on Digital Finance, Maria Ramos, said: “We have a historic opportunity to accelerate and expand the transformative impact of digitalisation.
In particular, digital finance, which in this crisis became the lifeline for millions across the world, extends the boundaries of financial inclusion by empowering citizens as savers, investors, borrowers, lenders, and tax-payers in a way that gives them choice and power over their money.”
Also speaking, Administrator of UNDP and Co-Chair of the UN Secretary- General’s Task Force on Digital Finance, Achim Steiner, said: “Digital finance’s dramatic potential for transformative impact is being revealed by the COVID-19 pandemic.
Digital transfers enable governments to get support to people in need, crowdfunding platforms have mobilised funds for medical supplies and emergency relief, and algorithmic lending means small businesses have quicker access to funds
The speed of the recent spread of these technologies is astonishing, but progress is not automatic. For digitalisation to be a true force for delivering on the Sustainable Development Goals, technological advances must combine with a sound policy that empowers citizens and enables our financial system to meet the urgent investment challenges that must be overcome to build forward better