BY EMEKA EJERE
There are strong indications that politically exposed individuals and groups across the country are not at peace with the cash withdrawal limit policy introduced last week by the Central Bank of Nigeria (CBN).
In line with its cashless policy, the apex bank had in a memo on Tuesday, announced a limit on cash withdrawal made by individuals and organisations with effect from 9 January, 2023.
CBN directed that maximum cash withdrawal over the counter (OTC) by individuals and corporate organisations per week shall, henceforth, be N100,000 and N500,000, respectively.
The bank further stated that withdrawals above these limits shall attract processing fees of five per cent and 10 per cent, respectively. It said: “Third party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist. The maximum cash withdrawal per week via Automated Teller Machine (ATM) shall be N100,000, subject to a maximum of N820,000 cash withdrawal per day.”
Part of the directive is also that only denominations of N200 and below shall be loaded into the ATMs, while the maximum cash withdrawal via point of sale (PoS) terminal shall be N20,000 daily.
It stated that in compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits is required for legitimate purposes, such cash withdrawals shall not exceed N5,000, 000.00 and N10,000,000.00 for individuals and corporate organisations, respectively, and shall be subject to the referenced processing fees stated earlier, in addition to enhanced due diligence and further information requirements.
This has expectedly continued to elicit mixed reactions, with commentators x-raying the implications for economic, political and social activities of Nigerians.
While some look at it from the perspective of checking vote buying and other illicit cash transactions, including collection of ransom by kidnappers and activities of currency speculators, others are concerned about majority of Nigerians who operate within the informal sector and whose businesses are bound to be hurt by any form of liquidity restriction.
Apparently disturbed by the possible consequences of the cash withdrawal limit to their lifestyle and campaign, some politicians in the country have raised objections to the policy, with some describing it as a calculated attempt to get back at the politicians.
Business Hallmark gathered that although many of the parties are not totally comfortable with the implementation timeline set by the CBN, the ruling All Progressives Congress (APC) and the opposition Peoples Democratic Party (PDP) appear to be most opposed to it.
Multiple sources say the APC and the PDP are worried that if the policy kicks off, it may adversely affect their outings before, during and after the general elections.
On Friday, the governor of Adamawa State, Ahmadu Fintiri, while reacting to the new CBN policy during a campaign engagement in Kala’a, Hong Local Government Area, said it was evident that the policy was targeted at the political class.
Fintiri said the policy coming shortly after the CBN governor, Godwin Emefiele’s uneventful foray into politics which had been prematurely truncated, could only have been retaliatory given that it was likely to worsen poverty among the citizens.
He said, “What is breeding poverty? Economic policies. Look at the one that is about to be implemented by the Central Bank which would further throw the country into poverty. Nobody is saying the economy shouldn’t be cashless. Take time and do it systematically. We shouldn’t do it as if some people wanted to be politicians and they were denied the opportunity; then they use their office to punish the politicians.”
Unease at hallowed chambers
While the Senate had on Wednesday (December 7) resolved to deliberate upon the subject this week, their counterparts at the lower chamber have summoned the CBN governor on Thursday for further explanations. They also asked that the policy be reviewed.
The decision to summon Mr Emefiele followed a motion of matter of urgent public importance moved by Aliyu Magaji (APC Jigawa) on Thursday during plenary.
In the motion, Mr Magaji said small businesses, which are the major drivers of the economy, depend on cash for transactions. He added that the owners of these businesses are going to be negatively impacted by this policy. According to him, even if the CBN has the statutory power to implement monetary policies, this particular policy would have a negative impact on the economy at large.
Members of Senate Committee on Banking and Finance also used the opportunity of the screening of two officials of the CBN – Deputy Governor on Financial System Stability, Aishat Ahmad, and the Deputy Governor on Corporate Services, Edward Adamu, to demand explanation. The duo had been recently re-appointed by President Muhammadu Buhari.
According to a source in one of the political parties, logistics and other necessary activities which require heavy deployment of cash, will suffer if the CBN fails to rethink the implementation timeline.
He said recent moves by the National Assembly, especially the House of Representatives, asking the CBN to suspend the policy, is part of a larger plan by the two parties (APC and PDP) to halt the policy.
Though the APC has claimed that it remains unperturbed, a member of the party said it is just grandstanding, insisting that the policy might be reviewed. Although the CBN governor has said there would be no going back on the cashless policy, he did not rule out the possibility of the withdrawal amounts being reviewed.
Reacting to the insinuations that the withdrawal limit will affect the ruling party, APC National Publicity Secretary, Felix Morka, in a message to respond to the inquiry from a major national daily, wrote: “APC’s presidential election plan is solid and remains solid irrespective of CBN’s policy on withdrawal limits.”
Similarly, the PDP Presidential Campaign Council said it is not jittery over the cash withdrawal limit introduced by the CBN, The Director of Research and Documentation, Pedro Obaseki, said if any political party is worried about the new CBN policy, it should be the APC.
Obaseki, who claimed that the PDP campaign is already cashless, said those behind the allegation should be evidential.
He said, “In the public domain in Nigeria, who is the only presidential candidate that has bullion van parked in his compound? His name is Bola Ahmed Tinubu. So, who should be scared, worried, bothered about the fact that the Central Bank is limiting the spread of cash?
“I am not among one of those who run riot with naked rumours. We are even a cashless society in PDP. Please let’s be evidential.”
Not cast in stone
Responding to the National Assembly’s rebuttal of the policy, Emefiele said the withdrawal limits were not cast in stone but would be reviewed upwards with time. He argued that the CBN did not wish to make life difficult for Nigerians but only sought to better the economy.
“I think it’s important for me to say that the cashless policy started in 2012. But on almost three to four occasions, we 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”, Emefiele said shortly after meeting President Muhammadu Buhari, at his native hometown of Daura, Katsina State.
“Between 2012 and 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.
“And we think Nigeria as the biggest economy in Africa needs 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.”
Champion of good governance
Meanwhile, the Conference of Nigeria Political Parties (CNPP) has said that critics of the new cash withdrawal limits are missing the point on the key gains of the policy, especially ahead of the 2023 general election.
In a statement signed by its secretary general, Chief Willy Ezugwu, the CNPP stated that Nigerians are suffering today because of bad governance and every sacrifice towards getting the right leadership into offices from 2023 is worth it.
It said bad governance is a product of Nigeria’s flawed electoral processes over the years which threw bad and corrupt leaders on the masses, adding that this became the case as a result of highly monetised electoral processes.
According to the CNPP, any process that will minimise the domination of the Nigerian political space by moneybags and corrupt politicians is worth whatever sacrifices by the ordinary citizens, who bear the brunt of bad governance the most.
“Secondly, information available in public domain shows how several millions, if not billions, of naira notes got mutilated and became of no use where the country’s thieving leaders stashed the cash, thereby denying the economy, especially the banks, the liquidity for productive enterprise,” it said.
The CNPP added that poor fiscal policies in the country over the years resulted from having the wrong persons in public offices due to electoral processes that abhorred level playing ground.
“Therefore, the CBN should be commended, rather than criticised, for the fresh cash withdrawal limits.
Mr. Godwin Emefiele as the CBN governor is unarguably the hero of Nigerian democracy and champion of good governance by virtue of the twin policies of redesigning of the naira notes and the reviewed cash withdrawal limits, with a perfect timing of the dates for implementation,” it stated.