The Central Bank of Nigeria (CBN) has said that possible adjustments to the cash withdrawal limit have not been ruled out but the January 9, 2023 take-off for the policy is sacrosanct.
CBN Governor, Godwin Emefiele, while stating this yesterday, said the plan, which he described as the continuation of the apex bank’s monetary policy direction, has the backing of President Muhammadu Buhari.
The CBN on Tuesday unveiled a revised cash withdrawal limit with a maximum of N100,000 cash withdrawal per week for individuals and N500,000 cash per week for companies.
The limits also affect other payment channels, including Automated Teller Machines (ATM), Point of Sale (PoS) and cheque-based transactions.
The maximum cash withdrawal through ATM is set at N100,000 per week, subject to a maximum of N20,000 cash withdrawal per day.
The maximum cash withdrawal through the PoS terminal shall be N20,000 per day. Only denominations of N200 and below shall be loaded into the ATMs.
Emefiele spoke to State House Correspondents in Daura, Katsina State, after a meeting with President Buhari.
He explained that the policy is not new, adding that the fears being expressed of excluding rural people were needless.
According to him, many financial platforms that will make the operation of the policy painless have found their way to remote places in the country.
He also said the policy was not targeted at any particular person, but aimed at developing the economy.
Emefiele spoke against the background of growing opposition to the policy, with the National Assembly calling for a review.
Many stakeholders have said the new policy would make life difficult for Nigerians and can negatively affect businesses.
The House of Representatives yesterday called on the CBN to suspend the cash withdrawal limit policy until it adheres to the Act establishing it, just as it summoned the CBN Governor to brief members.
The Abuja Chamber of Commerce and Industry (ACCI) also said it was worried about the timing of the policy and the impact on the ease and cost of doing business.
ACCI stated that it was concerned about the disruption the new policy would have on many Small and Medium Enterprises (SMEs) in several big local markets, noting that the limitation on withdrawal will constrain business transactions, especially as most businessmen rely on such withdrawals for quick business engagement from one market to the other.
Buhari backs policy
Emefiele said President Buhari was “very happy” and has given his nod to the apex bank to “carry on our work”.
He also said the President told them there was “no need to fear, no need to bother about anybody”.
He appealed to Nigerians to accept the cashless policy, and assured them that the apex bank “will be reviewing from time to time how this is working”.
The CBN governor emphasised that the bank “will not be rigid, but this is not to say it will be reversed; nor that we will change the timing”.
“But whether it’s about tweaking some amount to be a little bit higher or a little bit lower and the rest of them; we will do so because we are human, we want to make life good for our people; we do not want to make life difficult for them,” Emefiele said.
To this end, he assured Nigerians that the CBN will be monitoring developments as the policy comes into effect.
“I can assure everyone that we are alive to our responsibility and we will do what is right for Nigeria and Nigerians.”
The apex bank will engage the National Assembly to underline the key policy points behind the overarching policy stance of the apex bank.
Emefiele said: “From time to time we brief them (National Assembly) about what is happening and about our policies.
“I’m aware that they have asked for some briefings and we will brief them, but I think it’s important for me to say that the cashless policy started in 2012.
“Almost three to four occasions we have had to step down the policy because we felt that there is a need for us to prepare ourselves and deepen our payment system infrastructure in Nigeria.
“Between 2012 and now 2022, almost about 10 years, we believe that a lot of electronic channels have been put in place that will aid people in conducting banking and financial service transactions in Nigeria.
“We heard people talk about some of the people in the rural areas and the truth is that even online banking, as I was coming out to Daura, I saw a kiosk that has super-agent today.
“It’s because of the way we felt that there was a need for us to deepen the payment system infrastructure.
“We have 1.4 million super agents that are all over different parts of the country, all local governments, and all villages in this country.
“I have told my colleagues, some of their names are already on the CBN website and we will publish all the names of all the super agents, which is different from the banks, which is different from microfinance banks, which is different from other financial institutions.
“Having 1.4 million of them is as good as having 1.4 million banking points where people can conduct services and we think, Nigeria as a big country, the biggest economy in Africa, that we need to leapfrog into the cashless economy.
“We cannot continue to allow a situation where over 85 per cent of the cash that is in circulation is outside the bank. More and more countries that are embracing digitisation have gone cashless.
“I said it at different fora that this is not targeted at anybody, it’s just meant for the good and development of the Nigerian economy and we can only continue to appeal to Nigerians to please see this policy the way we have presented it.
“We will be reviewing from time to time how this is working because I cannot say that we are going to be rigid.
“But it is not to say that we will reverse it. It is not to say that we will change the timing, but whether it is about tweaking some amount to be a little bit higher or a little bit lower, and all the rest of them (we will do it).
“We will do so because we are humans. We want to make sure that we make life good for our people. We do not want to make life difficult for them.
“So, there is no need for anybody to worry, the Central Bank is monitoring what is happening and I can assure everyone that we are up and alive to our responsibilities and we will do what is right for Nigeria and Nigerians.”
CBN ready for new naira note rollout
Asked how ready the CBN is for the rollout of the re-designed naira notes, which has been slated for the 15th of this month, Emefiele said: “We are more than prepared.
“The banks have received the new cash and they have started dispensing them.
“I can only just assure you that it will come round, let us just be calm. Luckily, the old currency continues to be legal tender till January 31, 2023.
“So, I want to crack a joke, both the painted (new notes) and unpainted (old notes) will operate concurrently as legal tender, but by January 31, the unpainted one will not be useful to you again, so please take it to your bank as quickly as possible.”
Asked how much of the old notes have been returned, the CBN governor said: “The CBN has taken in over N500 billion while the banks have also received another N500 billion.
“By implication, the system has been able to mop up over N1 trillion from the N2.73 trillion outside the banking system.”
The House of Representatives yesterday asked the CBN to suspend the implementation of the policy pending an interface with the National Assembly in accordance with the provisions of the Act establishing the bank.
The lawmakers also asked Emiefele to appear before the House at plenary on Thursday in accordance with the CBN Act to answer questions on the various policies introduced by the Bank.
Some members accused the governor of violating the provisions of the CBN Act which required a periodic interface with the National Assembly as well as relevant committees of the parliament.
Section 8 (4) of the CBN Act states that: “The Governor shall appear before the National Assembly at semi-annual hearings as specified in subsection 5 regarding (a) efforts, activities, objectives and plans of the board with monetary policy and (b) economic development and prospects…”
Leading the debate on the motion to compel the apex bank to rescind the decision, the sponsor of the motion, Hon. Magaji Da’u Aliyu, said while it is good to operate a cashless policy, about 90 per cent of Nigerians live in rural areas where there are no facilities to carry out cashless operations.
He said: “Only a month ago, we woke up to hear that there will be new currency notes and change of the currency notes.
“As far as I am concerned, there is no single bank in my constituency. I do not know how my people will go and change this money, I do not know where my people will go and get it; the best we have is the POS, and our people still deal in physical cash.
“It is good to have a cashless policy, but we seem to be borrowing ideas and policies from other countries that are far ahead of us. We are comparing ourselves with the United States and the United Kingdom.
“These people are far ahead of us. We will get there one day but this type of policy disturbs the people that voted for us.
“The issue affects everyone. Most of our people are in rural areas and everything is being done in Naira and cash and somebody will wake up and make a policy that will start tomorrow, with no consultation.
“People have forgotten that 80 to 90 per cent of our people are in the rural areas, we must do something to save the situation, if there were enough banks and facilities, why not, it will work”.
Chairman of the House Committee on Tertiary Education, Aminu Suleman, said the policy could be inimical to the lawmakers if they allow the radical decision to succeed.
“There are several government chief executives in this country that have outlived the essence of their positions because I cannot simply understand how we can wake up one day and introduce this draconian approach to businesses, giving Nigerians one month to adjust their belts.
“More than 70 per cent of communities in this country do not have a banking system, only a few like Lagos, Rivers, Kano and probably Delta states might bust of about 70 per cent banking coverage,” Suleman said.
He argued that allowing the policy could erode the successes recorded through the introduction of small scale businesses.
“I cannot understand how Nigerians will be able to manage our businesses that is predominantly in cash with a withdrawal of N100, 000 per day.”
Nnolim Nnaji said the new policy was completely against commerce.
“In the economic situation we are in now, we need more spending than savings. The only way to drive an economy in this situation is for people to be spending money not saving money, and for businesses to be moving.
“We cannot at this point subject ourselves to one man, the decision is wrong and all of us must rise and say no because it affects the people.
“Yes the CBN has the power to do so but we also represent the people and before you let such a decision out, we as the representatives should be aware so we can see how we can face the people,” Nnaji said.
Julius Ihonvbare said the policy was a clear indication that the CBN was completely out of touch and out of tune with the content and context of polity.
“I represent Owan Federal Constituency. In both local governments, there is no one bank.
“Since I came to this House, there has been no bank there, there is none today and there may be none tomorrow.
“So, even the transfer they talk about, who am I transferring to? They are farmers. Beyond the work I do in this place, there is no federal presence in my constituency and we don’t have any big agency.
“Essentially, there are many communities like that across the country. The CBN has not done anything to ensure that they get the banks to establish their branches sufficiently across the country so that someone does not have to travel for one and a half hours or more before they can perform banking services.
“I believe that we should look at the implementation of this policy to ensure that we get the Central Bank to do the right thing.
“The CBN Governor is behaving as if he is more powerful than the President and the National Assembly,” Ihonvbare said.
Mark Gbilah said the House was statutorily supposed to be receiving a briefing from the CBNN governor even before such policies are brought to bear on the economy and the Nigerian people.
“We believe that the governor has not been keeping up with statutory provisions in that regard as clearly stated in the act. I am not aware he has briefed the committees on finance and banking and currency. The act says from time to time.
“It is well within the purview of this house. The governor is somebody that has not been appearing even when asked to appear before the House,” Gbilah said.
Minority leader backs policy
House Minority Leader, Ndudi Elumelu, rose in defence of the new policy, insisting that it will help curb insecurity, corruption and banditry in the country as kidnappers will be able to demand cash for their victims.
“If you go to the communities today, they will ask them to contribute money because there is cash everywhere. If you want to stop banditry, make it impossible for them to have cash. There should not be available cash for them.
“Secondly, we passed the law on this floor, it is our law, the fact that the CBN has been sleeping all this while and never went into the law passed and followed it to the letter does not mean that it was not there.
“They are only now waking up to implement the law we sent to them. If we want to amend it, we have to amend the law, it will not come by a resolution and that is the truth.
“No matter how bad we feel, no matter how we feel that our people will be endangered, in think the right thing is to amend the existing law.
“On the issues of cashless policy, I think that is the best thing that can happen to this country even though the timing might be difficult, we may ask for an extension of time for it to be well implemented.
“The policy will help. Stories are going around Abuja, even when people go to use the POS to withdraw money, there are people waiting to cut off their hands to collect the money.
“If there is a cashless policy and people use their phones to transfer money, some of such things will not happen and that is the truth,” Elumelu said.
Ruling on the motion, Speaker Femi Gbajabiamila said it was important for the House to invite the CBN Governor under the laws establishing the bank and requested that all prayers contained in the initial motion be reduced to one or two.
“If you want to comply with the act, ordinarily he should be appearing before the whole national assembly. I think you will allow me to speak to the Senate President and see whether, in compliance with the act, we can have a joint session.
“I think this is important enough for him to brief the National Assembly but if that fails, appearing before the National Assembly does not necessarily mean in a joint session.
“If he appears before the senate separately and appears before the House separately, he has appeared before the National Assembly but to save time, I will ask if that is possible,” Gbajabiamila said.
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