President Muhammadu Buhari and the newly re – designed Naira Notes
As part of its mandate to regulate and formulate Monetary and fiscal policy for the country, the Central bank shortly after its Naira redesigning policy followed up with yet another Monetary policy which will have a profound effect on the Nation’s economic terrain in year’s ahead.
The new Monetary policy which takes effect on the 9th of January, 2023 barely eight weeks to the General election has attracted diverse commentary from Nigerians, putting the average citizens on the edge for lts likely impact on their lives .
CBN Governor and the New Naira Notes
Under the new policy, the CBN, Nigeria’s apex Bank has pegged daily individual maximum withdrawals via point of of sale (POS) at Twenty thousand Naira, over the counter weekly withdrawal for individuals at N100, 000 and N500,000 for corporations.
As this is coming at a time, when the money laundry Act 2022 which fixed maximum cash withdrawal at N5 million Naira has not been amended, the cashless policy been aggressively pursued by the CBN is not peculiar to Nigeria alone as Countries across the world have also at some point adopted and embraced it in controlling and fighting inflation and curb currency in circulation . In Canada for instance, the ATM Withdrawal limit for account is usually $ 1000 a day. However, one can decrease this amount or increase it up to a maximum of $ 2500 with various ATM having different withdrawal limits.
Central bank of Nigeria monetary which will apply to ATMs, Bank and cash back from purchase, follows the lauch of West African nation’s giants new designed currency notes to control money supply.
Has it stands now, the Central bank weekly over the counter withdrawal of N100, 000 is just equivalent of $ 225 for individuals and the N500, 000 corporation threshold is about $ 1, 124 dillors with a processing fee of 5% required to acess more.
At $ 45 dollars maximum per day for individuals and $ 225 for businesses, there is no gain saying that the new policy has put millions of Nigerians on the edge as Nigeria propose to implement the same costly 2016 cashless programme initiated by the Indian Government that plunge it to an avoidable recession.
President Muhammadu Buhari and others during the unveiling of the new Naira Notes
From available statistics, of the 109 Million adults in Nigeria, 56 Million have BVNs, this leaves 53 Million Nigerian adults without acess to digital payment system when little cash is available, to further buttress this point, according to the Nigeria National Bureau of Statistics, NBS 34.4 million micro, Small and medium enterprises in Nigeria are informal. Another report by NBS has also shown that, only 22% of the 34.4 million informal businesses use the internet therefore, the new CBN policy if not carefully handled _can lead to the CREATION OF A NAIRA BLCKMARKET_
While some policy makers are commending the apex Bank saying the withdrawal limit and recent monetary policy would bring more people into the banking system and curb hording, illicit economic transactions, Analysts are worried that digital payment for now is still unreliable in Nigeria since, the initiative would hurt daily economic transaction by people and businesses.
They argue that in Nigeria, majority of the people work in the informal sector, many of such activities are outside of the legal frame work and government regulations such as farming, street market trade and public transport, the economy is heavily dependent on this sector and cash is usually preferred for transactions beause many lack bank account . Only 45% of Nigerian adults have accounts with regulated financial institutions according to the world bank. In the absence of bank account, point of sale terminal have emerged as one of the fastest growing areas of financial institutions in the Country, so by this new policy, the CBN is directly attacking such **Agency**banking services and people will essentially begin to hoard their money.
On the surface, it is going to drive people to start to try doing electronic transactions, but contrary to the expectation of the CBN, it is going to move people away From the financial institutions, according to Tunde Ajileje a partner at Lagos based SBM intelligence firm.
One of the positives of the policy is security, the initiative will help government of taking money out of circulation or better put reduce its circulation inorder to reduce the demand and payment if ramsom to kidnappers as transactions can be easily traced.
Chief Femi Falana ( SAN)
Chief Femi Falana led the onslaught against the new CBN policy of limit on withdrawals as he insisted that, the policy is illegal going by the money laundering act of 2022.
The house of representatives at it’s plenary recently also came hard on the policy asking the CBN to suspend its implementation which they hinged on the compliance on the CBN act and the 1999 Constitution.
Gov. Ahmadu Umaru Fintiri
Adamawa State Governor
The main opposition party, the peoples Democratic party has also kicked against the cash withdrawal limit policy saying ” If Buhari had no acess to funding in 2014, he would never have been President “
Both the African Democratic congress, ADC and ADP party has spoken strongly against the policy, arguing that the policy will create logistics problem for them, ” paying party agents Nationwide will be a problem “
Governor Ahmadu Fintiri , the Governor of Adamawa State pointedly accuse CBN Governor, Godwin Emefiele of targeting the political class with the new cash withdrawal limit policy, but the storm is actually just gathering as many are apprehensive of the days ahead especially with increase cases of hacking.
