It was learned last night that, barring a last-minute change, the House of Representatives will urge that the Central Bank of Nigeria’s (CBN) decision regarding cash withdrawal limits be reversed.
According to a senior lawmaker, parliamentarians believe the policy should be changed in general.
This comes right after Senator Aliyu Magatakarda Wamakko (APC, Sokoto), a former governor of Sokoto State, urged President Muhammadu Buhari to fire CBN Governor Godwin Emefiele due to the policy.
According to the new withdrawal policy, the apex bank has set a weekly cap of N100,000 and N500,000 on the amount of cash that can be withdrawn over the counter (OTC) by both individuals and business organizations.
The withdrawal limit was increased by the apex bank on Wednesday to N500,000 for private persons and N5 million for business entities in response to the controversy that followed the policy.
According to reports, the lower house had earlier passed a resolution requesting that the CBN governor appear before it to address any questions about the new policy before the bank implemented the cash withdrawal limit, which is scheduled to take effect on January 9, 2023.
Aisha Ahmad, the CBN’s deputy governor in charge of financial stability, came before the House of Representatives Tuesday to inform lawmakers of the strategy.
deputy governor, Speaker Femi Gbajabiamila did not make any ruling, saying the House will deliberate on the briefing by the apex bank and come up with its resolution.
A lawmaker who spoke yesterday, said a decision will be taken on the matter next week.
The lawmaker who spoke on condition of anonymity, said it is the general opinion of the lawmakers that the policy be reversed.
“Yes, next week we will take a stand. But, they have contravened a provision of the CBN Act, which requires the Central Bank to consult and discuss with the National Assembly before initiating or implementing any policy.
However, following the presentation and CBN’s reply to queries from lawmakers
They need to visit the National Assembly to talk to the legislators.
“The CBN must constantly show up, and we debate the advantages and disadvantages of their policies. A reversal is required. It couldn’t stand up. We will penalize them, but only when they change the policy will we examine the problem. In addition to the reversal, the bank would also face penalties for breaking its Act, he said.
Why having a policy is crucial – CBN
The CBN deputy governor previously informed the lawmakers that the CBN’s cashless policy was first implemented in 2012 in accordance with Sections 2(d) and 47 of the CBN Act, which give the CBN specific authority.
She added that the program was aimed to include everyone in the tremendous economic potential and that it was not intended to disenfranchise anyone, especially those in vulnerable circumstances, rural areas, or marketplaces.
She added that the top bank’s policy announcement on December 5 was a continuation of the cashless policy that was initially introduced ten years prior and was done in acknowledgment of the beneficial developments that have taken place in the financial and payment systems since that time.
“Some of these changes included a wide proliferation of financial access points. In 2012, thereabouts, we were still talking about bank branches as the only source of access to financial services. Today, we have a very robust payment system that includes bank branches; branches of micro-finance banks, POS machines, ATM machines, agent banking, E-Naira and many other options.
“To be specific, between the bank and the micro-finance banks, we have 6,500 locations, 900,000 POS terminals, 14,000 ATMs across the country and 1.4 million agents nationwide and every single local government in Nigeria has agents represented. We also have a proliferation of electronic transactions. Just by way of quick example, in 2012, we had N48 billion in POS transactions. Today, we have N6 trillion in POS transactions.
We had N3 trillion in electronic transfers in 2012. As of October 2022, we will have 300 trillion. That is an increase of 7,000%. Finally, and perhaps more importantly, we have seen the development of the Nigerian payment system on a worldwide scale. Financial inclusion has increased to 54.1%.
Nigeria is just behind nations like India, China, Thailand, Brazil, and South Korea in the global rankings for rapid real payment. Due to some of the steps that have been undertaken, we are the only African nation in the top 10.
Additionally, it has been calculated that real-time data payments and electronic payments each add roughly 0.67 percent to our GDP.
She explained to the MPs that the purpose of the cashless policy was, among other things, to lower the costs associated with processing cash, minting new currency, shredding old bills, and transporting actual cash from one location to another.
Lawmakers voice their worries
The refusal of the top bank to brief the House prior to implementing its policy, as mandated by Section 8 of the CBN Act, raised concerns from Speaker Femi Gbajabiamila.
He added that, as was the case in the US and the UK, the apex bank should have provided a sufficient timescale for the execution of the policy.
But responding, the deputy governor said the CBN remains open to continue to engage with the House.
“You mentioned comparing our predicament to what just transpired with the Bank of England; I believe that when we are drawing the comparison, we should take into account all the facts; according to international best practices, your currency needs to be redesigned every five to eight years. That hasn’t been done in twenty years. As a result, the Bank of England does this frequently. In comparison to what we have today, the UK has far less cash in non-circulating accounts. About 80 of us circulate outside,” she said.
There are a lot of wealthy people in Borno state, but there aren’t enough banks for them to exchange their old notes, so a politician from Borno asked what would become of them.
In response, Ahmad said that Borno State had more than 52 banks that accepted deposits, along with 16,547 locations and 16,000 agents.
Rep. Ali Shettima of Yobe State also voiced concern about counterfeiting of the new notes and inquired about the actions being taken to address it with the apex bank.
For his side, Chinedu Obidigwe of Anambra questioned the justification for the CBN’s haste in putting the policy into effect and questioned whether it was a chance for the ruling party to rig out opposition parties.
Ahmad responded by claiming that the decision was made for economic reasons and not for any political reasons.
Isiaka Ibrahim from Ogun State asked her to speak on the level of advocacy and public enlightenment on the new policy, saying many Nigerians were not yet carried along.
In response, she stated that the National Orientation Agency (NOA) and the apex bank are working together to educate Nigerians at all levels of society on the apex bank’s cashless policy.
Rep. Sada Soli of Katsina urged her to divulge the number of printed notes because he was concerned that the redesigned notes were not readily available days after they were made available to the public.
In response, she stated that the Mint was to create 500 million copies of the newly designed notes per order from the top bank.
She omitted, however, to break down the totals for each denomination and the printing costs.
In light of the new strategy, Rep. Tolulope Sadipe of Oyo State inquired as to what would become of the nation’s more than 1.4 million POS agents.
She responded, “I think the inverted restriction that we have actually takes the agents into consideration and from the data that we received from the agents themselves, in terms of transaction size is less than N2.5 million so they would not be affected.
While expressing support for the program, Rep. Dennis Idahosa asked the CBN to address the House’s concerns in order for the proposal to be successful.
Wamakko requests that Buhari fire Emefiele.
Senator Aliyu Magatakarda Wamakko, a former governor of Sokoto State, has urged President Buhari to dismiss the CBN governor.
He claimed the approach might lead to uncertainty across the nation in a phone interview.
Adding that “the CBN Governor thinks Nigerians are foolish to blindly follow him without questioning,” he questioned why Emefiele would “so disrespectfully impose a policy on Nigerians without, at least public sensitization for one year”
He continued by saying that Emefiele was “grossly unjust to the federal government” by the redesign of the naira and the cash withdrawal restrictions.
Wamakko argued that before Emefiele throws the nation into turmoil, all upright Nigerians should criticize him for his “thoughtless monetary policy orientation.” Otherwise, President Buhari should promptly fire him.
Where will Emefiele obtain the necessary infrastructure for effective digital transactions, the senator questioned.