Recently, the Central Bank of Nigeria (CBN) undertook audacious steps in repositioning the economy by redesigning the naira and limiting cash withdrawals. PAUL OKAH speaks with a cross section of Nigerians on the implications of the recent policy that is expected to take effect from January 9, 2023.
Policy has advantages, but…
The CBN recently said that more than 85 per cent of the currency in circulation is outside the formal banking system. The implication of this is that there are “banks” outside the formal banking system which keep more than 85 per cent of currency in circulation.
No doubt, there is evidence that some people prefer to house their money in their bedrooms, personal safe, water tanks, suction systems, and other unimaginable places. Agreed that there are people who engage in this to hide their ill-gotten wealth, but it is important to determine why Nigeria still has such a large unbanked population. This is a problem which must be resolved first; financial inclusion and deepening needs to be pursued in a strategic manner.
The CBN recently approved agency banking as evidenced by the number of POS operators everywhere. Unfortunately, with the new policy on limits on cash withdrawals, most of the agencies would close shop and their staff thrown into the unemployment net once again.
Recently, I read a report that alluded to the fact that the total cash in circulation represents about six per cent of the total money. If this is true, then it demystifies the CBN fuse about money outside the official banking system.
Consequently, I still have a hard time understanding the reason behind the CBN’s complaints about money outside the banks’ vaults. Money is not meant to be in CBN or banks’ vaults. It’s meant to keep moving, and facilitating transactions.
Obviously, it is clear that one of the main objectives of revamping the currency is to migrate transactions from physical money to electronic money. The eNaira or e-cash policy is a good policy, but it’s a hastily implemented policy. And if it is not well managed, it will cause chaos and damage the economy.
Digital/e-transactions will create a better audit trail for tax, accounting and security purposes. Distortions/disruptions to electronic banking services have not been addressed. What has the CBN done to address the issue of debits for failed transactions and delays in executing transactions caused by system failures and poor networks?
In many urban areas, electronic transactions are greatly limited by unreliable electricity and telecommunications services. Thus, forcing everyone to embrace electronic transactions is virtually beyond CBN, except the intention is to unleash chaos.
Dr Chiwuike Uba, ACUF Board Chairman
CBN should be applauded
Since the policy was made public, many Nigerians have shared divergent opinions on the development, but it is necessary, in the national interest, to go deeper into the entire cash-less policy of the federal government since its inception due to misconceptions and misunderstanding of the recent development.
As specified by the CBN as far back as 2012, the cash-less policy is aimed at placing Nigeria among the best 20 economies in the world before the year 2020. This is a target that was never met. We’re in 2022.
Is Nigeria now among the 20 best global economies? But the CBN informed the world that Nigeria would commence the process of changing to a cash-less economy by January 2012 and complete the process in 2020 to be among the best economies. So, why are people complaining about the timing of the implementation of the new cash withdrawal limits when the CBN is running behind its own scheduled implementation target?
Only a mischievous person will be complaining about the timing of the review of the cash withdrawal limits because we should be applauding Mr. Godwin Emefiele as the CBN Governor for daring to move Nigeria’s economy into top 20 best in the world after over seven years of stagnancy.
A good observer can easily identify three categories of people who are critical of the cash withdrawal limits introduced by the CBN. They are those who are totally ignorant of what the policy is about; those who misunderstood the policy and thought that cash withdrawal limit is the same as digital transaction limits; and those who, for political advantage, distort information about the policy in order to score cheap political points to further their corrupt and anti-people agenda. Among the third category of people are mostly politicians who have concealed huge sums of money in their bedrooms and farms for election rigging and for vote buying.
They are the same category of critics who complain about the timing, forgetting that the full implementation of cash-less policy in Nigeria should have taken place in 2014.
Nigerian lawmakers should have been commending the CBN governor and his management team rather than vilifying them. We see them as enemies of the people in the forthcoming 2023 general elections.
Any individual who plots to induce voters in any way, especially through vote buying, should be considered as prime enemy of democracy in Nigeria.
Chief Willy Ezugwu, CNPP Executive Secretary
‘It’s recipe for disaster, must be resisted’
The Coalition of Northern Groups (CNG) is extremely worried about the imminent crises arising from the CBN’s pronouncement of a regime of harsh policies on cash withdrawal limit, noting especially that the livelihood of many individuals and enterprise sustainability would be impacted.
As the representatives of various interest groups from northern Nigeria, the CNG, after watching and analysing the situation carefully, has come to believe that the CBN policy is another not-well-thought-out, unreasonable and unacceptable action perpetrated by certain dubious interests led by Godwin Emefiele against Nigerians collectively, and northerners in particular.
We find it ridiculous for Emefiele and the CBN, after plunging the country into economic crisis, that involves high inflation, poor exchange rate, and dwindling foreign reserve as symptoms of mismanagement and bad economic policies, to so arrogantly insist on the enforcement of this policy despite an order of the National Assembly to the contrary.
The CNG notes that the timing without adequate preparation and sensitization of the critical mass that drives the economy, the SMEs and MSMEs, could prove counter-productive and further drive many below the poverty line.
We note also that the banking infrastructure and mobile/digital facility to drive the cashless policy in Nigeria and in the North in particular, are not sufficiently developed.
As usual, not one to remain silent in the face of this constancy of disastrous Monetary Policies by the CBN that potentially affect the livelihood of Nigerians and the people of northern Nigeria, in the light of the above observations and highlighted complications and attendant risks, the CNG hereby resolves to embark on the mobilisation of northerners for a massive protest to resist the attempt by Emefiele or any other authority to place more misery on Nigerians at a time when businesses are groaning under the burden created by not-well-thought-out Government policies.
For the avoidance of doubt, the CNG is resolved to taking further necessary actions to stop Emefiele and the CBN from going ahead with the implementation of this and other manifestations of inconsistencies and misalignments between the fiscal and monetary policies of the government. This is because it is embarrassing that the CBN has been making announcements without any regard to the constitution and other relevant laws on the national economy and complete defiance of the Money Laundering Act.
Abdul-Azeez Suleiman, CNG Spokesperson
Policy Buhari’s best legacy
I keep saying that President Muhammadu Buhari will bequeath the best legacy of his administration to Nigeria before he leaves office. Though the APC has been greatly vilified by Nigerians, every now and then President Buhari comes up with good policy to better the lives of Nigerians.
The Electoral Act amendment was signed by President Buhari, which put paid to the ambition of many politicians, especially greedy lawmakers. Now, we are talking about an economic policy to limit corruption by restricting the amount of money in circulation.
The CBN’s latest policy on limited withdrawal is the best legacy President Buhari can leave for Nigerians. It will curb vote buying, ransom payment and digitise the economy.
I support it with my full chest. The CBN should ignore threats by politicians and implement it in full. We have never had it this good.
Hopefully, by the time the policy comes into effect in January next year, Nigerians will realise that the government means well.
Jacinta Tolu, civil servant
